You may have heard it suggested that for an upcoming GSA Schedule task order opportunity, the ordering agency “encourages” contractors to form Contractor Team Arrangements (CTA). What does this mean?
A CTA is when two or more Schedule contractors combine their Schedule offerings as a “team” to pursue task orders issued under Schedule contracts. In order to participate as a “team member” in the CTA, each team member must maintain its own current GSA Schedule contract and be otherwise eligible to pursue the task order on its own as the prime contractor. Importantly, this means that each team member must meet all of the small and socioeconomic set-aside designations for the order. The CTA team can then fulfill the ordering agency’s requirements by directly utilizing the offerings on all team members’ Schedules.
CTA team members must enter into a written agreement (i.e., the CTA) to work together to meet customer agency contracting needs. This written CTA cannot conflict with the underlying terms and conditions of the team members’ separate Schedule contracts. While the team members must select a “Team Lead” to lead negotiations and interface with the government, CTA members do not relate to each other in a prime contractor/subcontractor fashion.
GSA does not have formal regulations governing the use of CTAs. However, it has issued guidance on its website outlining how Schedule contract holders may establish CTAs to pursue task order opportunities. Indeed, the CTA Guidance makes clear that each CTA member is responsible to the ordering agency as a “co-prime.” GSA’s guidance emphasizes the differences between a teaming relationship established under a CTA and that of a more traditional Prime Contractor/Subcontractor relationship. For example, GSA specifically states that “[e]ach [CTA] team member has privity of contract with the government and can interact directly with the government.” And, each CTA team member’s individual Schedule contract terms, conditions, and rates apply: “The ordering activity is invoiced at each team member’s unit prices or hourly rates as agreed in the task or delivery order or GSA Schedule BPA.” Each team member is also responsible for reporting its Schedule sales and paying the applicable IFF charges.
Because all CTA team members are technically considered “co-primes” for the task orders that are issued to the CTA, numerous practical issues arise regarding the formation of the CTA agreement, and the performance of the contract. For example, neither GSA nor SBA offer direct guidance regarding how CTA team members should allocate the revenues awarded to the CTA for a task order. This is a problematic issue for small business CTA team members, because they must properly allocate the portions of the task order’s revenues won by the CTA that should be attributed to each team member for size calculation purposes.
Additionally, depending on the terms of the task order and the CTA itself, the Team Lead may be the only entity invoicing the government and getting paid. And, a BPA or task order may also only be directly awarded under the Team Lead’s name and DUNS number. Issues like these blur the lines between how much the team members truly interact with the government as “co-primes,” rather than as default subcontractors to the Team Lead.
Please do not hesitate to contact Katie Flood if you have any questions regarding CTA formation, or if you require assistance drafting your CTA.
About the Author: Katie Flood is counsel with PilieroMazza in the Government Contracts Group. She may be reached at [email protected].