FAR Part 15 allows the use of several competitive source selection processes to meet agency needs. Within the best value continuum, DOD may choose a process that it considers the most advantageous to the government, either the LPTA or the tradeoff process (see figure 1). DOD may elect to use the LPTA process where the requirement is clearly defined and the risk of unsuccessful contract performance is minimal. In such cases, DOD may determine that cost or price should play a dominant role in the source selection. When using the LPTA process, DOD specifies its requirements in the solicitation. Contractors submit their proposals and DOD determines which of the contractors meet or exceed those requirements, no tradeoffs between cost or price and non-cost factors are permitted, and the award is made based on the lowest price technically acceptable proposal submitted to the government. By contrast, DOD may elect to use a tradeoff process in acquisitions where the requirement is less definitive, more development work is required, or the acquisition has a greater performance risk. In these instances, non-cost evaluation factors, such as technical capabilities or past performance, may play a dominant role in the source selection process. Tradeoffs among price and non-cost factors allow DOD to accept other than the lowest priced proposal. The FAR requires DOD to state in the solicitation whether all evaluation factors other than cost or price, when combined, are significantly more important than, approximately equal to, or significantly less important than cost or price. In October 2010, we reported that DOD used best value processes for approximately 95 percent of its new, competitively awarded contracts in which $25 million or more was obligated in fiscal year 2009. DOD awarded approximately 26 percent using the LPTA process and 69 percent using the tradeoff process. DOD awarded the remaining 5 percent using sealed bidding, which is a competitive process where award is made to the responsible bidder whose bid conforms to the invitations for bid and is most advantageous for the government considering only price and price-related factors included in the solicitation. At that time, we found that the majority of the contracts were awarded using a tradeoff process in which all evaluation factors other than cost or price, when combined, were significantly more important than cost or price. Our analysis showed that DOD considered past performance and technical capability evaluation factors as the most important among the non-cost factors. Further, we found using a tradeoff process can be more complex and take more time than other source selection methods, and requires that acquisition staff have proper guidance, needed skills, and sound business judgment. While DOD and the military departments had taken steps to improve source selection procedures, acquisition personnel noted a lack of training to assist them in deciding whether or not a price differential is warranted when making tradeoff decisions. We recommended that to help DOD effectively employ best value tradeoff processes, DOD develop training elements, such as case studies, that focus on reaching tradeoff decisions, as it updates its training curriculum. DOD concurred and implemented the recommendation in August 2012. DOD issued new guidance that emphasizes affordability and standardization of best value processes since our analysis of fiscal year 2009 contracts. In September 2010, the Under Secretary of Defense for Acquisition, Technology, and Logistics (USD(AT&L)) issued a memorandum that established its Better Buying Power Initiative to obtain greater efficiency and productivity in defense spending. In its memorandum, USD(AT&L) emphasized that DOD must prepare to continue supporting the warfighter through the acquisition of products and services in potentially fiscally constrained times. USD(AT&L) noted that DOD must "do more without more." In April 2013, USD(AT&L) issued another memorandum to update the Better Buying Power Initiative. This memorandum identifies seven areas USD(AT&L) is pursuing to increase efficiency and productivity in defense spending. One area is incentivizing productivity and innovation in industry and government. As part of this guidance, USD(AT&L) states that "best value" in a competitive source selection should generally indicate that the government is open to paying more (up to some amount) than the minimum price bid in return for a product that provides more than the minimum needed performance. In addition, USD(AT&L) states that LPTA should be used in situations where DOD would not realize any value from a proposal exceeding its minimum technical or performance requirements and that another process should be used when standards of performance and quality are subjective. A second area of this guidance includes improving the professionalism of the total acquisition workforce. DOD has previously reported that training is a critical element of improving and sustaining a high quality workforce with the right skills and capabilities. USD(AT&L) also issued source selection procedures in March 2011 to standardize the methodology and process that DOD uses to conduct competitively negotiated source selections. For example, USD(AT&L) outlined a common set of principles and procedures for conducting acquisitions using the best value processes including the use of standardized rating criteria and descriptions for technical capability and past performance factors. Further, similar to information presented in the Better Buying Power Initiative, USD(AT&L) stated in the procedures that the LPTA process may be used in situations where the government would not realize any value from a proposal exceeding minimum technical or performance requirements, often for acquisitions of commercial or non-complex services or supplies which are clearly defined and expected to be low risk. In its April 2013 memorandum updating the Better Buying Power Initiative, USD(AT&L) directed the director of Defense Procurement and Acquisition Policy to update the guidance to describe the characteristics of a technically acceptable solution by July 1, 2013. As of July 2014, DOD officials are coordinating comments on a draft revision of the guidance. The Defense Procurement and Acquisition Policy official in charge of the revision told us the original due date of July 1, 2013 was established before they decided to do a more comprehensive update of the guidance, which has contributed to the date slipping for its completion. During the time that USD(AT&L) issued these initiatives and guidance-- specifically, between fiscal years 2009 and 2013--DOD experienced a number of changes in its contracting activity, including: Total obligations for products and services decreased from $380 billion in fiscal year 2009 to $310 billion in fiscal year 2013, Obligations on new, competed contracts decreased from $70 billion in fiscal year 2009 to $43 billion in fiscal year 2013, and Obligations on new, competed contracts of $25 million or more decreased from $39 billion in fiscal year 2009 to $24 billion in fiscal year 2013. See figure 2 for our analysis of DOD's contract obligations from FPDS-NG for fiscal year 2013. Even though DOD's obligations decreased between fiscal year 2009 and 2013, it did acquire a similar mix of products and services in both years. In addition, the percentage of commercial items purchased in those 2 fiscal years was approximately the same. DOD predominately used best value processes--tradeoff and LPTA--to evaluate offers from potential vendors in fiscal year 2013. DOD used best value processes for approximately 93 percent of the 2,851 new, competed contracts for which it had obligated over $1 million in fiscal year 2013 and used sealed bid for approximately 7 percent. For contracts with obligations of $25 million or more, DOD used the tradeoff process for approximately 58 percent of the contracts and the LPTA process for approximately 36 percent of the contracts. For contracts with obligations over $1 million and less than $25 million, DOD used tradeoff and LPTA at about the same overall rate--47 percent and 45 percent, respectively. In our sample of 171 contracts that used best value processes, DOD used tradeoff for 96 contracts and LPTA for 75 contracts. We found some variation in terms of what process was used to acquire products and services at the different thresholds we reviewed (see figure 3). As seen in the above figure, DOD used the tradeoff process most often in our sample to acquire services, including those related to construction projects, aircraft maintenance, and other support services, regardless of obligation amount. For contracts with obligations of $25 million or more, DOD used the LPTA process primarily to acquire commercial products such as fuel. In contrast, for contracts with obligations over $1 million and less than $25 million, DOD used the LPTA process to acquire a mix of products and services, including fuel, aircraft parts, computer equipment, construction-related services, engineering support services, and ship maintenance and repairs. The desire to weigh non-cost factors such as technical approach and past performance was a key factor cited in the majority of the solicitations issued for the 96 contracts in our sample that DOD awarded using the tradeoff process, regardless of obligation value (see table 1). For the 76 contracts for which non-cost factors were more important than price, DOD acquired both products and services, such as computer equipment, aircraft maintenance services, and communication network support services.and past performance were the factors most often identified as more important than price among the non-cost factors. For example, 48 out of the 76 contracts in our sample identified technical approach as the most important factor. Additionally, 23 out of the 76 contracts in our sample identified past performance as the most important factor. Other non-cost factors considered in some of the solicitations with much less frequency than technical approach and past performance include small business participation and delivery schedule. In addition, our analysis found that technical approach While data on DOD's use of source selection processes were not readily available, our analysis found that DOD increased its use of LPTA from fiscal year 2009 to fiscal year 2013 for contracts with obligations of $25 million or more (see table 2). We cannot make a comparison between fiscal year 2009 and fiscal year 2013 for the lower dollar range, because our prior report only focused on contracts with obligations of $25 million or more in fiscal year 2009. Several contracting and program officials said that their commands gave more attention to whether LPTA is an alternative option in light of declining budgets and Better Buying Power Initiatives. Further, declining budgets encouraged contracting and program officials to streamline requirements. For example: The Executive Director of Army Contracting Command--Aberdeen Proving Ground, one of five Army Contracting Command centers-- said that overall there is an increased cost consciousness regarding acquisitions, resulting from the Better Buying Initiatives and declining budgets. As a part of that increased cost consciousness, there is an increased willingness and necessity to re-examine tools that could present better prices. For example, the Executive Director referred to LPTA as "a tool that has been at the bottom of the source selection tool box collecting dust for some time." As it became necessary to take a look at what is really needed, they have "dusted off" the LPTA tool and had more discussions about how to set the technical acceptability at an appropriate level where there is no additional benefit from paying for more than that level. Contracting officials from Naval Facilities and Engineering Command stated that in the current fiscal environment of "doing more with less," they are educating their contracting personnel to use LPTA when appropriate. For example, on March 28, 2013, the Command sent an email communication to its contracting staff that provided guidance on the use of LPTA for task orders on multiple award contracts that are less than $10 million. The guidance stated that the contracting officer may choose to consider only price or cost for award purposes when the requirement is valued at less than $10 million, considered to be non-complex, and where non-cost factors are deemed unnecessary. These officials stated LPTA is less complex and less time consuming than tradeoff, and as a result, they can save personnel resources. In addition to internal guidance, Navy officials told us that the Better Buying Power Initiative also directs acquisition personnel to look for efficiencies and streamlining in acquisitions. Contracting officials from Naval Supply Systems Command stated they increased their scrutiny on tradeoff acquisitions, which has contributed to a cultural shift to increase the consideration of LPTA as an alternative source selection process. The command issued an October 9, 2012 memorandum to contracting activities that states if non-cost factors are more important than price, the acquisition must be reviewed by a senior level acquisition executive. Similarly, Air Force Materiel Command contracting and program officials stated that given the budget environment, it is increasingly difficult to justify higher dollar solutions from a technical standpoint when solutions may exist that meet the minimum requirement. DLA contracting officials stated that in light of resource constraints, it is increasingly common to purchase products that meet the program's needs without overstating the requirement. These officials told us LPTA is a good choice for mature, commercial requirements where there is no added value in conducting a tradeoff given the need to stretch budgets. Our review of contract documents and interviews with program and contracting officials from our 16 case studies found that for these specific acquisitions, DOD's ability to clearly define its requirements and its knowledge of potential vendors were the key factors that underpinned the decisions about whether to use tradeoff or LPTA. For example, in the eight case studies in which DOD used LPTA, DOD contracting and program officials generally stated they had sufficient knowledge of the requirements or vendors to feel confident that the lowest priced vendor, after meeting technical acceptability requirements, could deliver the product or service. In contrast, in our eight tradeoff case studies, contracting and program officials were less certain about requirements, were looking for innovative solutions, or wanted to use non-cost factors, such as past performance, as a differentiator when selecting the vendor. We found that for these 16 case studies DOD's reasons for choosing LPTA or tradeoff were generally consistent with guidance in the FAR and DOD's source selection procedures. Table 3 provides several highlights from the case studies that illustrate where DOD's ability to clearly define its requirements and its knowledge of potential vendors affected the source selection decision making process. Policy officials from some military departments noted that setting technical acceptability levels is important for contracts awarded through LPTA to be successful. Defense Procurement and Acquisition Policy officials told us the ongoing efforts to revise DOD's 2011 source selection procedures is intended, in part, to further define how to conduct best value processes. According to these officials, the revised guidance will emphasize that for LPTA, the solicitation must clearly describe the minimum evaluation standards. In addition, they expect the guide will provide additional information on how to determine when to pay a price premium. DOD, through courses offered by DAU and the military departments, provides both classroom and online training related to source selection processes to its acquisition personnel. Both DAU and military department officials stressed, however, the importance of on-the-job training in preparing personnel to make informed source selection determinations. Congress passed the Defense Acquisition Workforce Improvement Act (DAWIA) in 1990 to both ensure effective and uniform education, training, and career development of members of the acquisition workforce, including contracting and other career fields, and established DAU to provide training. The act also required DOD to establish career paths, referred to by DOD as certification requirements, for the acquisition workforce. DOD military departments must track acquisition workforce personnel to ensure that they meet mandatory standards established for level I (basic or entry), level II (intermediate or journeyman), or level III (advanced or senior) in a career field, such as contracting, life cycle logistics, and program management. Similar requirements and levels are established for each of the acquisition career fields identified by DOD. DOD identified a need to increase the capacity and size of the acquisition workforce over the past several years. For example, in a DOD assessment of the contracting workforce completed in September 2008, senior DOD contracting leaders identified the importance of not only mastering the "what," but in using critical thinking and sound judgment to apply the knowledge--thus mastering the "how" of contracting among its entry-level and mid-career personnel. To help address concerns that DOD had become too reliant on contractors to support core functions and to rebuild the capacity and skill sets that eroded in the years that followed the downsizing of the workforce in the 1990s, DOD increased its number of acquisition workforce positions from 133,103 in fiscal year 2009 to 151,355 in fiscal year 2013--including a 9.5 percent increase or an additional 2,616 positions--in the contracting career field. DAU officials identified five training courses that are taken either online or in the classroom to provide acquisition personnel, including contracting and program officials, the knowledge and skills necessary to make source selection decisions. Contracting personnel are required or recommended to complete all five of the identified training courses at some point in their career to obtain specific DAWIA certifications. Additionally, DAU makes these classes available to personnel outside the DAWIA acquisition workforce. Based on our analysis of student self-reported exit data in fiscal year 2013 and our discussion with DAU officials, we found that many graduates for these courses did not indicate their career field when completing the course registration or exit survey, particularly for online courses, which makes it difficult to know how many personnel outside of the DAWIA workforce with acquisition-related responsibilities took these courses. In September 2011, we reported on personnel working on service acquisitions who are outside the DAWIA acquisition workforce with acquisition-related responsibilities and found the number of these individuals to be substantial. As such, we recommended that the Secretary of Defense establish criteria and a time frame for identifying personnel outside the DAWIA acquisition workforce with acquisition-related responsibilities. DOD concurred with the recommendation and, as of June 2014, is developing a way to identify all of the non-DAWIA personnel with acquisition-related responsibilities and the appropriate training curriculum they should receive. Table 4 outlines each of these five courses. We also found that military departments provided source selection training--offering both overview and refresher courses--to contracting staff and others involved in the source selection process. Table 5 identifies examples of the training courses offered by various military departments. DAU and military department officials we spoke with pointed to their training as providing educational resources from which the acquisition workforce can understand the basics of appropriate source selection processes. These officials also stressed the role on-the-job training plays when making such determinations. For example, policy officials within the office of the Assistant Secretary of the Army for Acquisition, Technology, and Logistics told us that on-the-job training provides important exposure for less experienced acquisition staff to the source selection decision making processes. As a result, contracting officials have a better understanding of situations where a particular source selection process may be more appropriate than others. Many officials told us that contracting officials can best understand the acquisition process and apply their in-classroom training through making real world source selection decisions. As such, several military department officials, including contracting officials from our case studies, provided examples of why they consider on-the-job training to be important, including the following: Air Force Installation Contracting Agency contracting officials from one of our case studies and a command official told us that on-the-job training and experience are important factors that affect the source selection process determination. They stated that on-the-job training provides experience and opportunities for contracting officers to make critical decisions that can only occur in a source selection environment. To that end, these officials told us that informal mentoring relationships are established wherein newer, less experienced staff is assigned to work with more senior staff. Naval Facilities Engineering Command officials and contracting officials from one of our case studies stated that the task of identifying when requirements would better suit a particular source selection process is learned through gaining experience from on-the-job training. Naval Sea Systems Command officials from one of our case studies stated that the best training they received is on-the-job training. These officials explained that more senior contracting officers help newer contracting staff with their acquisitions. They consider mentor type training invaluable in learning how to conduct an acquisition. Best value processes continued to underlie the vast majority of DOD's new, competitively awarded contracts. DOD has increased its use of the LPTA process in recent years for higher value contracts, and its decision making regarding which source selection process to use did not appear to be ill-advised. Its decision making was generally rooted in knowledge about the requirements and vendors. In our sample of 16 cases, we identified instances in which DOD used LPTA for what appeared to be complex acquisitions, such as the system to mimic an anti-aircraft missile, but the acquisition team had considerable knowledge about the requirements or vendors. In other cases, DOD used the tradeoff process for what appeared to be relatively simple acquisitions, such as fabric dyeing, yet the acquisition team identified complexities about the proposed acquisition. Amid the climate of rapidly building fiscal pressures and cost consciousness, selecting the right source selection approach continues to be essential to ensure the department acquires what it needs without paying more than necessary. We are not making recommendations in this report. We provided a draft of this report to DOD for comment. DOD did not provide written comments on this report but did provide technical comments, which we incorporated as appropriate. We are sending copies of this report to appropriate congressional committees and the Secretary of Defense. The report will be available at no charge on GAO's website at http://www.gao.gov. If you or your staff have questions about this report, please contact me at (202) 512-4841 or dinapolit@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix III. Committee reports from the Senate and House Armed Services committees and the Joint Explanatory Statement accompanying the National Defense Authorization Act for Fiscal Year 2014 mandated GAO to report on the Department of Defense's (DOD) use of best value processes. We determined 1) the extent to which DOD used best value processes in fiscal year 2013; (2) the factors DOD considers when choosing a source selection process; and (3) training DOD provides to its acquisition personnel on source selection processes. In addition, in response to a matter identified in a 2013 report from the House Armed Services Committee, appendix II includes information on the military departments' acquisitions of body armor vests in fiscal year 2013. To determine the extent DOD used the best value processes in fiscal year 2013, we used data from the Federal Procurement Data System-Next Generation (FPDS-NG) as of October 2013 to identify a population of contracts based on the following criteria: (1) newly awarded by DOD in fiscal year 2013, (2) competitively awarded, and (3) had obligations of over $1 million in fiscal year 2013. This analysis identified a population of 2,851 contracts, and from this population we selected a stratified random sample of 227 contracts, with the strata defined by whether the contract had obligations of $25 million or more, or whether its obligations totaled over $1 million and less than $25 million. We divided the data into two groups including contracts with higher obligations of $25 million or more and contracts with lower obligations over $1 million and less than $25 million. We used the $25 million threshold to divide our data set based on a Defense Federal Acquisition Regulation Supplement (DFARS) requirement that contracts for products or services with $25 million or more in estimated total costs for any fiscal year have written acquisition plans, which contain information on the anticipated source selection process. more, we compared the percentage of contracts solicited using best value processes to fiscal year 2009 data we reported in October 2010.prior report did not include contracts with lower obligations of less than $25 million. DFARS SS 207.103(d)(i)(B). We obtained and analyzed the solicitation documents for all of the contracts in our sample to identify the source selection process DOD used. We verified the contract award fields in FPDS-NG with contract and solicitation data to ensure that the contracts within our sample were in-scope. Based on that analysis, we determined that a total of 44 contracts were out of scope for our review. These 44 contracts were excluded from our analysis, because they were either incorrectly coded in our key parameters, or were awarded using processes outside of the Federal Acquisition Regulation (FAR) Part 14 on sealed bidding or Part 15 on contracting by negotiation (which includes best value processes) and consequently should not have been in our sample, resulting in a total of 183 contracts in our review (see table 6). After accounting for these errors, we assessed the reliability of FPDS-NG data by electronically testing the data to identify problems with consistency, completeness, or accuracy and reviewed relevant documentation. We determined that the FPDS-NG data were sufficiently reliable for the purposes of our review. Because we followed a probability procedure based on random selection, our sample is only one of a large number of samples that we might have drawn. Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample's results as a 95 percent confidence interval (e.g., plus or minus 8 percentage points). This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn. Unless otherwise noted, percentage estimates of contracts with obligations of $25 million or more have 95 percent confidence intervals within +/- 8 percentage points of the estimate itself. Similarly, for contracts with obligations over $1 million and less than $25 million, percentage estimates have confidence intervals within +/- 10 percentage points of the estimate itself. In addition, to compare characteristics of contracts in our sample that used best value processes for both strata, we determined contract type, the type of procurement (product versus service), and if commercial item procedures were used for our sample using FPDS-NG data and conducted data reliability analysis on these fields, by verifying this information with the contract and solicitation documents. For the contracts identified as tradeoff, we analyzed the contract and solicitation documentation to identify the most frequently used non-cost evaluation factors and their relative importance to price. To identify what factors DOD considers when choosing a source selection process, we analyzed the FAR, DFARS, and DOD and military departments' regulation, policy, and guidance on source selection. We interviewed senior DOD policy officials at Defense Procurement and Acquisition Policy, and at the Army, Navy, and Air Force headquarters. We also interviewed officials from at least two buying commands--based upon such factors as the number of contract actions and obligation amounts--at each military department (Army, Navy, and Air Force), as well as the Defense Logistics Agency (DLA) to discuss factors affecting their decision process on which source selection process to use. In addition, we analyzed our sample of 183 contracts and selected 16 new, competitively awarded contracts with obligations ranging from $1.1 million to $150.7 million to further our understanding of why acquisition officials chose the source selection process. Our 16 case studies--8 tradeoff and 8 LPTA--included at least 1 from each military department and DLA, different product and service types, and amount of dollars obligated in fiscal year 2013. For the case studies, we interviewed DOD contracting and program officials and reviewed contract documentation, including the acquisition plan, solicitation, and source selection decision memorandum to further understand the source selection decision making process. The results from our review of these selected contracts cannot be generalized beyond the specific contracts selected. During the course of our review, we also interviewed officials from the following commands: Department of the Army, Army Contracting Command, Aberdeen Proving Ground, Maryland; Medical Command, Fort Detrick, Maryland; and Intelligence and Security Command, Fort Belvoir, Virginia Department of the Army, United States Army Corps of Engineers, Washington, D.C., and Huntsville Center, Alabama Department of the Navy, Naval Air Systems Command, Patuxent River, Maryland; Naval Facilities Command, Navy Yard, Washington, D.C.; and Naval Supply Systems Command, Mechanicsburg, Pennsylvania Department of the Navy, United States Marine Corps Installations and Logistics Command, Navy Annex, Virginia; and Marine Corps Systems Command, Quantico, Virginia Department of the Air Force, Installation Contracting Agency and Air Force Materiel Command, both located at Wright-Patterson Air Force Base, Ohio Defense Logistics Agency-Energy, Ft. Belvoir, Virginia; and Defense Logistics Agency-Troop Support, Philadelphia, Pennsylvania Joint Theater Support Contracting Command, Kabul, Afghanistan. To determine what training DOD provides to its acquisition personnel on source selection processes, we met with Defense Acquisition University (DAU) officials and instructors and reviewed training materials. We also obtained attendance and workforce data from the DOD Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), Human Capital Initiatives. Further, we collected and reviewed military department and command specific training documents to identify if additional source selection training is given in addition to DAU provided training. We also interviewed DOD policy officials at Defense Procurement and Acquisition Policy, several commands at the military departments, as well as contracting and program personnel at the contracting offices of the selected military departments from the 16 case studies on training provided related to source selection processes. We supplemented these case studies with interviews with industry associations to identify their perspectives about DOD's source selection processes. We conducted this performance audit from September 2013 through July 2014 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The Marine Corps, Defense Logistics Agency (DLA), and Army bought similar soft body armor vests made of ballistic material in fiscal year 2013 using different source selection processes. Knowledge of requirements or vendors were key considerations in each acquisition, but distinct needs led to different decisions about which source selection process to use even when acquiring the similar product. The Marine Corps issued one delivery order to purchase soft body armor vests for $2.3 million in fiscal year 2013 using the lowest price technically acceptable (LPTA) process. It issued this order from a multiple award, indefinite delivery indefinite quantity (IDIQ) contract awarded to two vendors in fiscal year 2009 using the LPTA process. The contracting officer told us they chose to use LPTA for the base contract because they consider soft body armor vests to be a commodity product with clearly defined technical performance specifications. Further, the contracting officer, in consultation with the program office, saw no opportunity for tradeoff above industry standard because the industry standard met their current needs. Ongoing research and development showed that any tradeoff for enhanced performance would lead to the armor being heavier, an unacceptable outcome. For the base contracts, the Marine Corps awarded to the second and third lowest priced vendors, because the lowest priced vendor was deemed non-responsible. DLA issued 23 delivery orders to purchase soft body armor vests for $288.1 million in fiscal year 2013. It issued these orders from three separate IDIQ contracts awarded to three vendors in fiscal years 2011 and 2012 using the tradeoff process. DLA contracting officials told us that they chose to use the tradeoff process for these contracts because they wanted to use past performance as a key discriminator, which is generally not allowed using the LPTA process. Further, because DLA buys for sustainment purposes and its quantity needs fluctuate, officials told us that past performance was a critical determination factor requiring the use of the tradeoff process, in addition to the vendor's historic production capacity, delivery schedule, and other performance capabilities. The Army issued one delivery order to purchase soft body armor vests for $10,201 in fiscal year 2013 using the LPTA process. It issued this order from one of the multiple award, IDIQ contracts awarded to eight vendors in fiscal years 2009 and 2010 using the tradeoff process. Army contracting officials told us they chose to use the tradeoff process for the base contract, because it provided the Army more discretion in evaluating past performance as well as leaving open the possibility that industry vendors might offer a more innovative solution. Once the Army had a group of qualified vendors on contract, they could then use the LPTA process for subsequent buys. In addition to the contact name above, the following staff members made key contributions to this report: Molly Traci, Assistant Director; James Kim; Anh Nguyen; Erin Stockdale; Jina Yu; Claire Li; Jessica Drucker; Danielle Greene; Roxanna Sun; John Krump; Mark Ramage; Julia Kennon; Virginia Chanley; and Carol Petersen.

Summary:
DOD obligated about $310 billion in fiscal year 2013 for products and services needed to support its mission. To competitively acquire what is needed, DOD may use best value processes--including tradeoff and LPTA--to evaluate vendors' proposals. When using the tradeoff process, DOD weighs the relative importance of price against non-cost factors. By contrast, DOD may use the LPTA process and award the contract based on lowest price once technical requirements are met. Congress mandated GAO to review DOD's use of best value processes. GAO identified, among other things, (1) the extent to which DOD used best value processes in fiscal year 2013, (2) the factors DOD considers when choosing a source selection process, and (3) training DOD provides to its acquisition personnel on source selection processes. GAO identified and reviewed solicitations for a projectable sample of 183 contracts out of 2,851 new, competitively awarded contracts that DOD awarded in fiscal year 2013 with obligations over $1 million. GAO also reviewed DOD and military departments' guidance regarding their use of the best value process. GAO selected 16 contracts for case studies based on military department, best value process used, and other factors. GAO reviewed contract documents and interviewed program and contracting officials for these case studies. GAO also reviewed DAU and military departments' training on source selection procedures. DOD provided technical comments that GAO incorporated as appropriate. The Department of Defense (DOD) used two best value processes--tradeoff and lowest price technically acceptable (LPTA)--for approximately 93 percent of the 2,851 new, competitively awarded contracts awarded in fiscal year 2013 with obligations greater than $1 million. DOD used the tradeoff process most often in GAO's sample of contracts to acquire services, regardless of obligation value. For contracts with higher obligations, DOD used the LPTA process primarily to acquire commercial products, such as fuel. In contrast, for contracts in GAO's sample with lower obligations, DOD used the LPTA process to acquire both products and services. Several contracting and program officials said that their commands gave more attention to whether LPTA is an alternative option in light of declining budgets and efficiency initiatives. For contracts with obligations of $25 million or more, GAO found that DOD increased its use of LPTA since GAO last reported on this issue in October 2010 using fiscal year 2009 data. GAO's prior report did not include contracts with lower obligations. Source: GAO analysis of DOD contract and solicitation documents. | GAO-14-584 a The 95 percent confidence intervals for estimates in this table are within +/- 8 percentage points of the estimates themselves. DOD's ability to clearly define its requirements and its knowledge of potential vendors were key factors that underpinned decisions about whether to use tradeoff or LPTA in GAO's 16 case studies. In the eight case studies in which DOD used LPTA, contracting and program officials generally stated that they had sufficient knowledge of the requirements or vendors to feel confident that the lowest priced vendor, meeting DOD's technical requirements, could deliver the product or service. In contrast, in the eight tradeoff case studies, contracting and program officials were less certain about requirements, were looking for innovative solutions, or wanted to use non-cost factors to differentiate vendors. For example, the United States Army Corps of Engineers used technical non-cost factors to evaluate vendors' abilities to use robotics for explosives disposal. These factors are generally consistent with guidance in the Federal Acquisition Regulation and DOD's March 2011 source selection procedures. DOD, through courses offered by the Defense Acquisition University (DAU) and the military departments, provides both classroom and online training related to source selection processes to its acquisition personnel. Both DAU and military department officials stressed, however, the importance of on-the-job training in preparing personnel to make informed source selection determinations. For example, Naval Facilities Engineering Command officials told GAO that determining when requirements are better suited for tradeoff or LPTA is learned through gaining experience from on-the-job training.