FAR 9.601(1) CTA

[emkrebs]

Does FAR 9.601(1) contractor teaming arrangement require the establishment of a separate legal entity? Are there any examples of this type of CTA (not the prime/sub as described ed 9.601(2)) that did not establish a separate legal entity that anyone could point me towards?

[Jamaal Valentine]

On ‎2‎/‎7‎/‎2016 at 4:42 AM, emkrebs said:

Does FAR 9.601(1) contractor teaming arrangement require the establishment of a separate legal entity?

No, but other rules may require establishment of a separate legal entity:

38 C.F.R. Sec. 74.1 - VA's definition of joint venture requires establishment of a separate entity.

FAR 19.101 offers additional information on joint ventures; see also SBA 8[a] program requirements for establishing a joint venture.

NOTE: Many unofficial references I've read specifically state that a differentiating factor between contractor team arrangements is joint ventures 'constitute separate legal entities'.

As for an example, are you looking for a contract number/award, or case?

Direction was added to paragraph of 52.204-17 to enable offerors comprised of more than one entity, i.e., joint ventures, to respond appropriately. [FAC 2005-74; FAR Case 2012-024; Item I; Docket No. 2012-0024, Sequence No. 1]

Just remember 9.601(1)'s definition of joint venture isn't necessarily the same definition used in other places, and is restricted to that Subpart.

[emkrebs]

Jamal - thanks for the info. Let me add a few specifics....my company is a SDVOSB/Hubzone, and we are considering going after an on-ramp to a large contract vehicle. Draft solicitation states that team partners' past performance and quals will only be evaluated if the team is constituted as a FAR 9.601(1) CTA, and explicitly states that a team composed under 9.601(2) will not permit evaluation of the PP/quals of the teaming partners. I have been struggling to find any examples of CTAs/documents for a FAR 9/601(1) type arrangement that is NOT a JV or partnership (separate legal entity). Draft solicitation Q&A makes multiple mention of "CTA or JV" implying they are two different paths to bidding. Additionally, Hubzone JVs are governed by CFR 13 part 126.616, yet the draft indicates a JV may not need to have only Hubzone partners. We are essentially trying to avoid the JV route to ensure my team does not get into any issues with non-Hubzone members. Any guidance on where I might turn for example(s) of a 9.601(1) CTA that is not a JV (separate entity)?

[Guest Vern Edwards]

emkrebs:

Personally, I have not seen a team agreement that wasn't either a JV or a prime/subcontractor relationship, but I understand that a limited liability company might be an option.

In any case, check these out for background:

https://www.foley.com/files/Publication/ef87af6c-5b87-4a51-8a61-5f58a57a630b/Presentation/PublicationAttachment/89bd1b85-9bab-466c-85e1-de2c1f0037f3/Government%20Contracts%20Teaming%20Agreements%20and%20Other%20Teaming%20Arrangements%20(....pdf

http://www.acq.osd.mil/osbp/docs/dod_OSBP_Guidebook_for_Facilitating_Small_Business_Team_Arrangements.pdf

http://www.aigclaw.org/tic63.html

http://www.pepperlaw.com/publications/teaming-in-government-contracts-2003-05-27/

http://www.onvia.com/business-resources/articles/common-pitfalls-in-federal-contract-teaming-arrangements-and-how-to-avoid-them

Also, see Koehler, Teaming Agreements: The Proverbial "Wolf in Sheep's Clothing'", Briefing Paper (May 2014), 14-6 Briefing Papers 1, and Teaming Agreements/Edition III, by Humphries and Irwin, Briefing Paper (September 2003), 03-10 Briefing Papers 1.

Do yourself a favor and consult an attorney before discussing agreements with potential team members. Team agreements can be legally complex, especially for small businesses and if the members are in different state jurisdictions.

[Ron Fouse]

emkrebs:

Sounds like CIO-SP3, or maybe another with similar language? Seems to me the RFP is confusing things somewhat and the Q&A has made it worse. In my experience, GSA has used the term "CTA" to allow for two existing schedule holders to jointly bid on a task order, effectively combining their labor categories to cover all of the TO requirement. See http://www.gsa.gov/portal/content/200553. This site includes some guidance on CTAs that are not JVs, but I definitely agree with Vern that teaming agreements are complicated, especially when affiliation implications with respect to your set aside status are involved.

But the GSA CTA arrangement seems to only be viable at the TO level. The RFP language you reference seems to suggest that a CTA -- as something different than two or more companies forming a partnership or JV to team as a single prime bidder as defined in the FAR -- could be used to bid on the vehicle. I don't understand how that would work. Who actually gets the vehicle award? Which cage code? Which SAM registration? Ultimately the contracting officer can only award to some legal entity, even if that entity is a person or a sole proprietorship, not to two entities that are casually working together.

[emkrebs]

It is in fact CIO-SP3 (the on ramp coming up in a month or so). RFP from "last time" states that CTAs (where the past performance and quals of all teammates are used in the evaluation) are permitted if in accordance with FAR 9.601(1) but NOT if the team is constructed in accordance with FAR 9.601(2) (which is the traditional prime/sub teaming agreement). I candidly admit I do not have a lot of experience with CTAs other than the traditional prime/sub. Looking for insight on what teaming options are available under the "(1)" - joint venture (requires a new entity), but does partnership? From what I can find, it appears so, but very limited experience here. Comment?

[Ron Fouse]

Though I happen to be an attorney, don't take this as legal advice since I don't know much about your exact circumstances. Seems to me they are basically saying they won't give credit for sub past performance. Ok, that's their prerogative. But they will give PP credit to all members or "owners" of a team. In my opinion, the best way to structure that kind of team is with a joint venture agreement that creates a new legal entity. Just opinion though, doesn't have to be done that way. A partnership could be formed that isn't an incorporated legal entity, just be contractual agreement between the partners. I think that's dangerous when the inevitable break up occurs, but again just my opinion. Lots of further issues in this area, like populated versus unpopulated joint ventures, affiliation issues for set asides, etc. that have to be carefully considered. Just one of the reasons why I wish the government would always consider sub PP, because not allowing for it makes contractors sometimes have to jump through an awful lot of complicated hoops to be competitive.