Capturing government business can be difficult, even after you’ve acquired a GSA Multiple Award Schedule (MAS) contract. As a MAS contractor, you may be unqualified for certain opportunities based on the scope of your offerings, or you may not be competitive due to your business size. Fortunately, you have several options for partnering with other contractors to increase your odds of success in the federal marketplace. Along with subcontracting and entering a joint venture, joining a Contractor Teaming Arrangement (CTA) can be an advantageous strategy for GSA Schedule holders. In this blog, we’ll discuss what you’ll need to do to form a CTA, so you can be on your way to reaping these benefits.
What is a Contract Teaming Arrangement (CTA)?
In a Contractor Teaming Arrangement, two or more contractors with their own GSA Schedules work together to compete for and meet Schedule orders. The contractors entering the CTA, rather than GSA, negotiate the terms of the arrangement. CTAs provide many benefits to contractors, from enabling them to compete for orders that they may not quality for on their own, to reducing the risk of nonperformance by allowing team members to focus on their individual strengths.
Composing your CTA Agreement
Once you’ve found other contractors with complementary offerings to join your CTA, you’ll want to create a CTA Agreement that formalizes the business arrangement between your team’s members. The members of a CTA are responsible for writing their own agreement. Since Contracting Officers typically require you to submit your quote and CTA Agreement together, it’s important to put some thought into the agreement document itself. Ordering agencies will look at your CTA agreement as part of their evaluation of your potential success as a contractor.
GSA Schedule contractors may form a CTA at any time. While CTA agreements are often formed in response to a specific Request for Quote (RFQ) or Request for Proposal (RFP), it may be a good idea to draft a shell of your CTA Agreement document in advance with your other CTA members, so you can respond quickly when opportunities are posted.
CTA Agreement Elements and Relevant Terms
In your CTA agreement, you’ll discuss how you’ll assign responsibilities and handle financial and legal matters when another contractor is involved. GSA recommends that your CTA document include specific elements, which we’ve broken down below.
Aside from covering these elements, it’s up to you how you structure your agreement and what else you decide is relevant to include – GSA doesn’t provide a suggested template. For ease of reading, we’ve presented the recommended elements below under three categories: legal, team-related, and financial.
It’s also worth noting the differences between a few terms that GSA uses to describe CTAs. GSA distinguishes a CTA (Contractor Teaming/Team Arrangement) from a CTA Agreement (Contractor Teaming/Team Arrangement Agreement). We’ll also refer to a CTA Agreement as a CTA document here, to emphasize that it will be a written product. A team leader is the contractor designated as the leader in the CTA agreement, and a team member is each contractor holding their own GSA Schedule and designated as a CTA member in the CTA agreement.
Legal Elements to Address in your CTA Document:
- Legal Relationship: Ensure that the terms of your CTA document do not create a joint venture, another kind of partnership opportunity that constitutes a new legal entity. Your CTA document also shouldn’t create a separate subsidiary – team members remain independent and distinct companies when they enter a CTA.
- Agreement Duration: Specify how long your agreement will last, identifying options related to duration that will be available to contractors and how those options will function.
- Agreement Terms: Define the scope of the project to be completed by the CTA. Be sure to identify team members’ responsibilities and limitations on those responsibilities, as well as which team member will be receiving and paying team management fees.
- Liabilities: Address each team member’s responsibilities and performance requirements to establish liability.
- Delivery Responsibility: Establish who will be responsible for delivery among the team members and team leader.
- Confidential Information: Identify any proprietary information, describing how you will manage such information and any related rights.
Team-Related Elements to Address in your CTA Document:
- Identification of Parties: In your CTA document, which should be signed by each participating contractor, identify the following:
- Each CTA member’s name, address, GSA Schedule contract number, telephone number, email, and point of contact (POC). Since the government has privity of contact with all members of a CTA, the ordering agency may contact any CTA member directly.
- The team leader and POC. If your team leader will change during your order performance period, provide the reasons for the change and your plan for designating the team leader throughout order performance.
- The ordering activity’s name, address, and any primary points of contact within the ordering activity for reaching out about specific needs.
- Team Activities: List all activities that will be part of the CTA, identifying who will be responsible for each activity.
- Team Leader’s Responsibilities: Define the designated team leader’s duties during each stage of the project.
- Team Members’ Responsibilities: Define responsibilities for each team member, describing their duties in detail.
- Replacing Team Members: Describe the circumstances and procedures for replacement of team members and leaders. Include a statement acknowledging that after receipt of an order, the team must obtain the ordering activity’s approval before they replace team members.
- Performance Evaluation: Identify the individual under whose name the government should evaluate contractor performance in the Contractor Performance Assessment Reporting System (CPARS). This requirement applies to all orders that exceed the Simplified Acquisition Threshold (SAT), per FAR 8.406-7.
- Team-Related Statements: Below are statements regarding team member relationships that you can go ahead and include in your CTA document. They’ll be true for any CTA.
- State that the CTA exists solely between team members.
- State that the CTA does not conflict with any terms and conditions included in each team member’s GSA Schedule contract.
- State that all team members will remain independent contractors, who will be responsible for their own employees.
Financial Elements to Address in your CTA Document:
- Sales Reporting and Industrial Funding Fee (IFF) Responsibility: State that each team member is responsible for paying the IFF to GSA, reporting their own sales under their Schedule contract, and tracking sales by contract number to ensure they’re meeting contract pricing and IFF reporting requirements.
- Invoicing and Payment: Specify who on your team will be responsible for invoicing and payment. Make sure to state that all members of your CTA agree to your chosen method of payment and that you and other team members would resolve any disputes regarding the distribution of payment without the government’s involvement. GSA encourages payment to be made to each team member; however, team members may decide that payment be made to the team leader, who then would pay each team member.
- Warranties: Designate responsibilities for handling warranty service, identifying the point of contact on your team for warranty issues, any documents you’ll require for a warranty claim, and the individual correcting deficiencies covered by warranty. Be sure to also describe your plan for managing warranty compensation within the team.
- Open Market Items: List any open market items required for the project, if needed, and clearly identify them as such. Since the GSA Multiple Award Schedule supplies a wide range of products and services, you shouldn’t need to add many items from the open market.
- Pricing and Costs: List your unit prices or hourly rates and discuss how you calculate pricing. You’ll want to include all supplies/services to be sold and their pricing, including any pricing for team lead task management, if applicable. You should state as well that the prices you’re charging to the ordering activity do not exceed the prices on each team member’s Schedule contract. Finally, describe how you’ll divide any order incentives or fees within your CTA team.
- Ordering Procedures: Discuss how you’ll handle processing any additional orders from government agencies.
Evaluation of Your CTA Agreement and Beyond
Addressing each of the elements above explicitly and in detail can provide a solid foundation on which to build your CTA Agreement. Of course, each CTA will look a little different, and there may be additions that you’d like to make to help clarify the particulars of your arrangement.
It’s important to remember that ordering agencies will be reviewing your CTA Agreement along with your quote to assess your potential as a contractor. Among other criteria, they’ll be looking to see that the division of your team’s responsibilities will lead to a successful and cooperative partnership, that your CTA meets the conditions of the RFQ, and that your CTA doesn’t conflict with the terms and conditions of the contractors’ individual Schedule contracts. Ordering agencies may suggest revisions or clarifications to your CTA Agreement during their review of your quote, with the goal of crafting an arrangement that minimizes risk and maximizes the possibility of success.
Do You Need Help with Your GSA Schedule?
Forming a CTA may seem daunting, but there are resources to support you during the process. For more information about CTAs or CTA agreements, we suggest visiting GSA’s page on CTAs. If you have further questions about forming CTAs, your GSA Schedule, or other partnership opportunities, Winvale is happy to help guide you through the landscape of federal contracting.
