Would you choose a handyman for your house the same way you pick paper towels for your kitchen? What about deciding on the mechanic for your car versus the gas station you use to fuel it? How about the food you feed your children and the paper bag you put their lunch in?
The answer, of course, is no. When most reasonable people are making important decisions, such as fixing a house, repairing a car, or feeding their kids, the value of the service or product being provided weighs as equally on our minds as the price. We’re all willing to spend a little more to have quality products when it comes to important purchases. While this seems like common sense, federal appropriators throughout much of the Department of Defense (DoD), along with other federal departments and agencies, do exactly the opposite. It costs taxpayers billions.
To protect taxpayers from waste, fraud, and abuse, the Department of Defense and other government agencies have implemented a bidding process labeled the “lowest price technically acceptable” (LPTA) standard. In theory, under this standard, a government agency awards the contract to the proposal that submits the lowest price while still meeting the technical requirements. Although effective for common everyday items like paper clips and toilet seats, the standard has been improperly applied to more complicated acquisitions and services, especially in the DoD and in regards to American opportunities in exploring outer space.
Washington needs to do a better job ensuring that we get the best goods and services for our money—not just acceptable goods and services at the lowest price. Unlike the private sector, federal bureaucrats often fail to assess the matter at hand, merely looking at cost rather than quality. LPTA has allowed them to purchase goods and services on the cheap without seeing if they are reliable or durable. They know that they will be praised as cost cutters today while the blame for their purchases falling apart later will rarely make it back to their desks. In other words, when the gun jams on the battlefield because it was poorly made, but “technically acceptable,” it’s not the buyer sitting in the Pentagon who’s taking the worst of the result.
What was once pitched as a cost-saving measure has become a curse. DoD buyers should ensure that the company wanting government funds has a solid plan mapped out before receiving our tax money, but it often falls for gimmicks. The best example of this failure can be found in one of the most important projects for the future of humanity: space travel. Currently, the federal government buys room on many rocket launches from Elon Musk’s SpaceX. Although SpaceX has proved to be innovative in advancing space travel, a number of rockets have frequently exploded on the launch pad, often costing taxpayers millions and delaying important NASA launches years into the future. If accounting for all variables leads to purchasing rockets from SpaceX or its competitors—or some from both, to mitigate cost and risk—that’s great, but government buyers must ensure taxpayers are getting the best deal from every transaction they make.
Our thinking must focus on value for high-cost items, not simply price. That’s not what’s happening. Some members of Congress are pushing for what’s cool and popular rather than what is right. One congressman, for example, recently attached an amendment to the House version of the 2018 National Defense Authorization Act that would require the Air Force to use only SpaceX Rockets, which are conveniently produced in his congressional district. This is cronyism at its worst, and it would waste American tax dollars, and potentially lives in the future, while also stifling innovation.
Fiscal conservatives aren’t the only ones disapproving the proposal. The Air Force is protesting the measure as well. In a memo, Air Force officials have argued that this move would reduce competition and, as a result, cost Americans $1.8 billion more than the current plan.
The rocket example is the latest controversy showing the need to abandon the LPTA criteria, and Senator Mike Rounds has offered a solution. In the last Congress, Senator Rounds introduced the Promoting Value Based Defense Procurement Act, under which the DoD would be tasked with avoiding LPTA criteria when purchasing complex information technology, systems engineering, and technical assistance services or other professional services. This bill would allow the DoD to approach buying paper clips differently than rockets, and it should at least be analyzed and considered by our congressmen.
The need for reform like this is more pressing than ever, and the senator’s bill has the potential to save lives, especially during a time of war. The Trump administration has promised to make the government run more like a business, and the first step in doing so should be to teach appropriators “the art of the deal” regarding how they dole out government contracts.
Jeff Isaak is a former staffer for Sen. Rand Paul (R-KY)