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).