Collaboration can be a powerful strategy in federal contracting. Contractor Teaming Arrangements (CTAs) allow companies to combine strengths, broaden capabilities, and pursue opportunities they may not be able to handle individually. Governed under FAR Subpart 9.6, CTAs are recognized and encouraged for practice within the federal acquisition process.
According to FAR Subpart 9.6, there are two main types of teaming arrangements:
- Teaming Agreement: A contract between a potential prime contractor and a subcontractor to collaborate on a specific government opportunity
- Other Teaming Arrangements: Two or more companies form a new legal entity (like a joint venture or partnership) to act as a prime contractor for a government opportunity
These arrangements are typically formed before proposal submission, but can also be established after award, provided the government is notified in accordance with FAR 9.603. In this blog, we’ll explore how CTA is different from Prime/Subcontractor, how they differ from prime-subcontractor relationships, their benefits, and the steps to form a successful arrangement.
CTA vs. Prime/Subcontractor Relationship
The CTA differs from a partnership between a prime contractor and subcontractor in that all members of the team are equal parties to the contract. Important differences are detailed below:
| Feature | Contractor Team Arrangement (CTA) | Prime/Subcontractor Arrangement |
| FAR Definition | A broader concept under FAR 9.6 that deliberately includes both forming new entities to bid as prime contractors and agreeing up front to subcontract parts of the work | The traditional framework where the prime holds the contract and subcontracts parts of the work after award |
| Privity of Contract | All team members have direct privity with the Government; each may invoice and hold a government relationship directly | Only the prime has privity of contract with the government and can interact with the government; subcontractors have privity only with the prime |
| Responsibility | Shared as outlined in the CTA agreement | Prime is solely accountable for contract performance |
| Invoicing | Each member bills the government individually | Only the prime invoices |
Why Form a CTA
CTAs are advantageous for both government buyers and contractors.
For Government Buyers:
- Access to complete solutions from contractors with complementary capabilities
- Easier fulfilment of socioeconomic procurement goals
- Streamlined acquisitions with fewer gaps in capability
For Contractors:
- Broaden competitiveness: Small businesses and niche contractors can pursue larger opportunities together by combining their capabilities to present a stronger proposal to the government.
- Risk reduction: Each team member focuses on their area of expertise. Spread the financial risk of a contract.
- Increased contract eligibility: CTA allows the pursuit of opportunities that individual firms may not qualify for alone.
- Strategic compliance: CTA members can help meet small/disadvantaged business participation goals. A large business can propose to perform contracts set aside for small businesses in conjunction with a small business.
- Flexibility: Contracting Team Arrangements (CTAs) enable companies to assemble the ideal team for a specific contract. This flexibility allows businesses to respond to the evolving needs of the marketplace and ensures that the unique requirements of each contract are met. Additionally, CTAs can help companies enter new markets and enhance their experience or past performance.
Benefits of Contractor Teaming Arrangements for Government Contractors
In the competitive arena of federal contracting, one strategy stands out for its potential to amplify success: contractor teaming arrangements. Whether you’re a seasoned contractor or just starting out, collaborating with partners can open doors to opportunities that may have seemed out of reach. Here’s why you should consider forming a team:
1. Combine Forces for Greater Impact
Teaming up with the right partners means harnessing their unique strengths and capabilities, significantly bolstering your chances of winning government contracts. By pooling your resources and expertise, you can present a comprehensive, competitive solution that captures the attention of decision-makers.
2. Simplicity and Speed
Setting up a teaming agreement is both quick and straightforward. Unlike forming a new legal entity, you don’t have to worry about sharing equity or control with your partners. A simple agreement on terms and conditions is all it takes to get started, allowing you to focus more on what matters: delivering value to the government.
3. Flexibility to Adapt
Every government contract comes with its own set of requirements, and teaming agreements are designed to be flexible. You can customize your arrangement to meet specific needs while maintaining the freedom to modify or terminate the agreement as your business landscape evolves. This adaptability ensures that your core operations remain unaffected while you explore new horizons.
Find a Teaming Partner: iQuasar Teaming Portal
How to Form a CTA
Forming a CTA begins with selecting partners who hold GSA Schedule contracts and drafting a CTA agreement. GSA’s official CTA guidelines recommend that the agreement include the following:
- Duration and Termination Clauses
- A designated Team Leader
- Clearly defined Team Member Roles
- Communication protocols with the government
- Invoicing & Payment responsibilities
- Acknowledgement of independent contractor status
- Rules for performance evaluation, such as CPARS reporting (FAR 8.406-7)
- Sales reporting and IFF payment obligations (GSA MAS Reporting Guide)
Additionally, the agreement must not create a joint venture or subsidiary and should comply with the terms of each member’s individual GSA contract.
Due Diligence Before Teaming
Regardless of the form of the teaming arrangement, contractors should perform the following due diligence on their prospective teaming partners:
- Check the System for Award Management (SAM) website to confirm that the proposed teaming partner is not suspended, debarred, or proposed for debarment.
- Consider the proposed teaming partner’s past performance history.
- Confirm the proposed teaming partner is in a sound financial position to perform any resulting prime contract or subcontract.
- Subcontractors should consider the likelihood that the proposed prime contractor will receive the prime contract award.
- Confirm that the proposed teaming partner does not have an actual or potential organizational conflict of interest that could prevent the team from receiving the contract award.
Key Clauses to Include in a CTA Agreement
While the type and complexity of teaming agreements can vary greatly depending on the industry, government agency, and the particular solicitation or contract award, the parties should consider including the following general clauses in the teaming agreement.
- Payment Plan: Clearly outline payment structures, particularly for cost-reimbursable or time-and-materials contracts
- Confidentiality and Non-Disclosure: Address exchange of proprietary data during proposal prep and incorporate exceptions related to FAR whistleblower protections
- Exclusivity Clause: Define whether partners can team on the same opportunity with others
- Termination Triggers: Clearly define termination events, such as execution of the subcontract or inability to agree on terms. Additionally, parties should consider including a termination for convenience clause and specifying notification requirements
Contractor Teaming Arrangements (CTAs) are a smart way for small businesses to grow in the federal marketplace. By teaming up with other companies, you can take on bigger projects, offer more complete solutions, and boost your chances of winning contracts without having to do everything on your own. CTAs let you focus on what you do best while still meeting the government’s needs. If you’re ready to explore new opportunities and find the right partners to grow your business, contact us. iQuasar is here to help you get started.
