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Steve O'Keeffe

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Posted: 6/28/2012 - 4 comment(s) [ Comment ] - 0 trackback(s) [ Trackback ]

Minimum Wage…?

What’s the new four-letter word in government contracting? Yep, it’s LPTA - Low Price Technically Acceptable. The fowl language is flipping both government mission owners and contractors the bird. Sadly, contracting shops’ definition of TA is causing folks to call these contracts Tragic Acts.
Consider the recompete. An aggressive new contractor low bids an incumbent by 20 percent. The assailant’s proposal is predicated on rebadging all of the incumbent’s personnel - and hiring them at 30 percent less than they’re currently paid by the incumbent. That 10 percent is all profit margin. The government contracting shop awards to the assailant. The new contractor offers the existing workforce their same jobs at 30 percent less money. Who’d take a cut below their minimum wage? The existing workers quit their cubicles. The new contractor can’t perform. The government mission owner is compromised. Now the legal nonsense starts - and it’s not a quick process. As if its not enough that new primes are failing to honor their own teaming agreements and stealing from incumbent subcontractors...
Is it important that the government gets value for every dollar? Yes. Is competition good for America? Yes. Is LPTA making Uncle Sam penny wise...? Too often, yes.

Oh, and by the way, many good incumbent contractor companies, with strong past performance, are being ruined by this contracting lunacy.  No wonder LPTA is being redefined as Lousy Product Tragic Act...

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