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Contractor Team Arrangement (CTA)

The What, Why, and How of CTAs

What is a Contractor Team Arrangement?

A Contractor Team Arrangement (CTA) is a cooperative agreement between two or more GSA Multiple Award Schedule (MAS) Contract holders to “combine” products and/or services into one offering, enabling them to compete for an order they would not have qualified for individually. CTAs are typically formed when the capabilities of individual GSA Contractors complement each other and are needed to fulfill the requirements of a larger contract.

CTA vs. Prime/Sub

What are the Differences Between a CTA and a Prime/Subcontractor Arrangement?

Unlike a prime contractor/subcontractor arrangement, Contractor Team Arrangements are not limited to the offerings available under the prime’s GSA MAS Contract. CTAs appeal to government buyers because they offer a single solution by pairing products and/or services across multiple GSA MAS Contracts.

Contractor Team Arrangement 
Prime/Subcontractor Arrangement
Each CTA member must hold a GSA MAS Contract. Only the prime contractor needs to hold a GSA MAS Contract.
Each CTA member is responsible for their agreed upon duties. The prime contractor is responsible for the performance of all duties and cannot delegate responsibility for performance to subcontractors.
Each CTA member has privity of contract with the government and can interact directly with the government. Only prime contractors have privity of contract with the government and can interact with the government. The prime contractor is responsible for its subcontracting activities.
The buyer is invoiced at each CTA member’s pricing, which is agreed upon in the task or delivery order or GSA Contract BPA. The buyer is invoiced according to the prime contractor’s GSA Contract
CTA members can pool their GSA MAS Contract offerings to provide buyers with a complete solution. The prime contractor can only offer the products and/or services awarded on its own GSA MAS Contract.

Why Form a CTA?

The Benefits of Contractor Team Arrangements

In addition to appealing to government buyers, CTAs can offer companies several benefits as well:

  1. Enhanced Capabilities: CTAs allow contractors to pool their resources, creating all-inclusive solutions that may not have been possible for a single contractor to provide alone.
  2. New Opportunities: By collaborating with other contractors and expanding your resources, you open the door to bidding on additional GSA Contracts.
  3. Lower Risk: By distributing responsibilities among multiple contractors within the CTA, the complexities associated with a task order can be more effectively managed and mitigated.
  4. Flexibility: CTAs allow companies to assemble the right team for a specific contract. This allows companies to adapt to the changing needs of a marketplace and ensures that a contract’s unique requirements are met.
  5. Streamlined Solution to Attract Buyers: A CTA allows contractors to provide their government buyers with a single point of contact and a single source to meet their needs, as opposed to sourcing from multiple contractors.

How to Form a CTA

Elements to Include in Your CTA Agreement

Per GSA’s Recommended Team Agreement Elements, all CTAs should include the following information:

  • Agreement Duration. Define the duration of the partnering agreement, identify any options, and describe how each option will work.
  • Team Leader. Provide a detailed outline of Team Leader responsibilities and specify the contractor who will perform as the Team Leader. If the Team Leader will change throughout the order performance period, the document should describe the reasons for such changes and how the Team Leader will be designated during order performance.
  • Team Members. Specify the responsibilities of each Team Member and any limitations on those responsibilities.
  • Communications. CTAs should outline points of contact for each Team Member (GSA MAS contractor). Since the government has privity with all Team Members, the buyer may communicate directly with CTA Team Members.
  • Invoicing and Payments. Designate team responsibilities for invoicing and payment. The CTA document should clearly indicate that all Team Members agree to the method of payment. The CTA Agreement should acknowledge that the Team Members, without any involvement by the government, would resolve any dispute involving the distribution of payment between the Team Leader and the Team Members.
  • Legal Relationship. The CTA document must not create a joint venture or separate subsidiary. Each Team Member is operating as a “prime” for the portion of work they are performing.
  • Delivery Responsibility. State whether the Team Leader or each member is responsible for a particular part of the project, so that delivery responsibility is clearly established.
  • Confidential information. Identify any proprietary information and specify how such proprietary information and related rights will be managed.
  • Identification of Parties. The CTA Agreement should:
    • Be documented in writing and signed by each participating GSA MAS contractor
    • Identify each member of the CTA by name, address, GSA MAS Contract number, and Point of Contact (POC)
    • State the name and address of the ordering activity
    • State that the agreement is solely between the Team Members
  • Conflicting Terms. The CTA Agreement shall not conflict with the terms and conditions of each Team Member’s GSA MAS Contract. In the event of a conflict, the GSA MAS Contract shall take precedence.
  • Specific Team Activities. State the various types of activities that will be incorporated into the team arrangement and identify who is primarily responsible for each identified activity.
  • Independent Contractors. The CTA Agreement should state that all Team Members remain independent contractors, responsible for their own employees.
  • Replacement of Team Members. Address the circumstances and procedures for replacement of Team Members, including the Team Leader, and should state that the team must obtain the approval of the ordering activity prior to replacing any Team Member after receipt of an order.
  • Performance Evaluation. Clarify under whose name the government should evaluate performance in CPARS. FAR 8.406-7 requires ordering activities to enter evaluations in CPARS for all orders exceeding the Simplified Acquisition Threshold (SAT).
  • Sales Reporting & Industrial Funding Fee (IFF) Payment. Specify that each Team Member is responsible for tracking and reporting its own sales in accordance with the terms and conditions of the GSA MAS Contract and for paying the related IFF.
  • Pricing. Specify unit prices or hourly rates and how pricing is calculated; list the supplies/services and pricing, including any team lead task management pricing, if applicable; note that all prices charged to the buyer must be at or below the applicable contractor’s GSA MAS Contract prices; and explain how any order incentives or fees will be divided within the team if applicable.
  • Liabilities. Document each Team Member’s responsibilities and performance requirements, so that liability is clearly established.
  • Ordering procedures. Document how the team will handle processing orders from the government.

Tips for Entering Into a Successful CTA

Communication & Defined Roles

Ensuring effective communication and having defined roles among CTA members is paramount. To keep clear lines of communication, a CTA teaming agreement should identify each team member’s role and responsibility for the work being performed at the order level. Keep in mind, these roles and responsibilities are defined by the team, and not the government. A team lead should be designated whenever a CTA is formed, to delegate tasks. Typically, the team lead will be the company/individual who initiates the CTA and will serve as the buyer’s main point of contact. If the team collectively decides to serve one invoice, the team lead will be responsible for this.

Financial Details

While it is strongly advised that separate payments be made directly to each team member, members may decide to have the buyer submit one payment to the team lead, who is then responsible for distributing the payment. It is important to track sales under your CTA because each Contractor is responsible for reporting sales and remitting the appropriate Industrial Funding Fee (IFF) for products/services provided under its GSA MAS Contract regardless of the CTA’s invoicing and payment structure.

Socio-Economic Status

Know the socioeconomic status of each CTA member. Keep in mind, if you are entering into CTA to compete for a small business set-aside, the limitations on subcontracting (FAR 52.219-14) apply. This includes the requirement that the small business team member(s) perform at least 50% of the work.

Responsibilities

Each team member is held responsible for their offerings and performance under the contract. While a team member may subcontract work under their GSA Contract as part of the CTA, the subcontractor will not be considered a team member, and the subcontractor’s performance will be the responsibility of the GSA Contract holder.

It is also important to note,  each CTA member is governed by their respective GSA MAS Contract, meaning products and services offered through the CTA are held to the same pricing, terms, and conditions of their GSA MAS Contract.

RFQ Response

Request for Quotation (RFQ) responses should clearly state that a “Contractor Team Arrangement” is being proposed to fulfill the RFQ. While it may not be required, you should always include the CTA document in such response.

Should You Enter Into a CTA? Takeaways

As a GSA MAS Contractor, a Contractor Team Arrangement can be a useful tool that provides your company flexibility to respond to a wider range of RFQs. If your company is considering a CTA, the first step is to identify a potential partner that complements your offerings. The next step is to agree upon terms and conditions to govern your CTA effectively. With proper planning and thoughtful consideration, you can form a successful CTA that expands your capabilities and opportunities.

Have Additional Questions? Ready to Move Forward With Your Own GSA Contract?

Federal Schedules, Inc. has been helping companies obtain and manage their GSA Schedule Contracts since 1986. Contact us to discuss how we can help expand your company’s potential.