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jsimancas

Small Business Set Asides and CTA's under GSA Schedule

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Do all team members of a CTA have to be small businesses when solicitation is a small business set aside? Is this still to the discretion of the CO?

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The answer depends on whether the "team" is proposing as a single entity or a set of prime-subcontractor relationships. If the "team" forms a single business entity, the answer depends on whether the entity is a small business, which depends on how the "team" is constituted. Is it a joint venture? Is it a corporation? Is it a partnership? Depending on the arrangement, go to Title 13 of the Code of Federal Regulations and look at the small business size standards in Part 121.

If the team is a set of prime-subcontractor relationships, then only the prime must be a small business. However, the prime must be careful with the subcontracts to not establish an affiliation, which could affect its size status. The prime must also be able to comply with the limitations on subcontracting in FAR 52.219-14.

It is not at the discretion of the CO.

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If you are asking specifically about Federal Supply Schedule CTAs, then yes, all members of the CTA must (1) hold an appropriate schedule contract and (2) be small on that contract. This has been true since set-asides were added to Part 8.4.

You may be thinking of the backdoor set-asides contracting officers used to achieve by using size status as an eval factor, including the primary eval factor, in which case they could (and still can) specify all or only one member of the CTA be small.

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Since the 'team' we are proposing would be a CTA relationship versus a Prime/Subcontractor Relationship I agree that all would need to hold the appropriate schedule and be small if the requirement falls under FAR 19.501 - “set-aside for small business is the reserving of an acquisition exclusively for participation by small business concerns."

This brings up another issue we have been debating.

Are you required to enter into a CTA if your partner holds the appropriate schedule? Can you simply forgo the CTA and enter into a Prime/Subcontract Relationship?

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"Can you simply forgo the CTA and enter into a Prime/Subcontract Relationship?"

You have to keep in mind that in that type of relationship, the "prime" must have all the products/services on their FSS schedule and the most that the "prime" can charge is what is listed on their FSS contract. There are no upcharges, pass-throughs, etc... For the 03FAC schedule that I used to oversee, this was a common problem ever since the GSA OIG put a stop to these type of practices.

Example: The primary FSS contractor has a service at $50 per hour. The subcontractor charges $55 per hour. The most that the primary FSS contractor can charge an FSS customer agency is the $50 per hour as that is the rate as stated in their FSS contract. The auditors have caught/charged many companies for violation of this.

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