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I am pretty sure I know the answer to this.  The minimum performance on a setaside contract that's awarded to the members of a CTA can be satisfied by work from any of the CTA members, in any combination, right?

 

So there are three CTA members. Small setaside.

A (small)- does 25 percent of the work, billing its rates and ODCs

B (small) - does 25 percent of the work, billing its rates and ODCs

C (small) - subcontracts 50 percent of the work to a large company, which does the work, billing C's rates and ODCs

 

This is okay, right?

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On ‎12‎/‎6‎/‎2019 at 5:31 PM, contractor100 said:

The minimum performance on a setaside contract that's awarded to the members of a CTA can be satisfied by work from any of the CTA members, in any combination, right?

Who is the contract awarded to?  What limitation on subcontracting clause including the date is in the contract?

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sorry, out of town.  It is awarded to the CTA. The limitation on subcontracting clause is the one that's currently included in the GSA schedules, which at present is:

 

52.219-14 LIMITATIONS ON SUBCONTRACTING (JAN 2017)

 

As far as I know, the FAR has not yet been modded for the new SBA limitations rule, correct?  See case 2016-011

 

https://www.acq.osd.mil/dpap/dars/opencases/farcasenum/far.pdf

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18 hours ago, contractor100 said:

It is awarded to the CTA.

A CTA is not an entity.  It is an agreement between entities.  Are you talking about a JV?

 

18 hours ago, contractor100 said:

The limitation on subcontracting clause is the one that's currently included in the GSA schedules, which at present is:

 

52.219-14 LIMITATIONS ON SUBCONTRACTING (JAN 2017)

This clause does not apply to contracts awarded to SDVOSBs or HUBZone SBs. 

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Contractor Team Arrangement (CTA)

Quote

A GSA Schedule Contractor Team Arrangement (CTA) is an arrangement in which two or more GSA Schedule contractors team together to provide a total solution to meet a customer's needs. Under Schedule CTAs, contractors complement each other and it allows teams to compete for orders for which they may not qualify independently. GSA encourages the use of CTAs to meet buyer’s requirements.

 

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On ‎12‎/‎6‎/‎2019 at 2:31 PM, contractor100 said:

So there are three CTA members. Small setaside.

A (small)- does 25 percent of the work, billing its rates and ODCs

B (small) - does 25 percent of the work, billing its rates and ODCs

C (small) - subcontracts 50 percent of the work to a large company, which does the work, billing C's rates and ODCs

I'm interested in the notion that D (a large company) will perform 50 percent of the work, billing its costs as if it were actually C, a small company. C, the official CTA member, will perform none of the work. That seems … odd to me. I'm no expert in the "ostensible subcontractor rule" and I'm not even sure it's applicable to this situation. Still--shouldn't Company D be billing its own rates and costs to Company C?

Perhaps the situation is not as I'm interpreting it?

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2 hours ago, Retreadfed said:

This clause does not apply to contracts awarded to SDVOSBs or HUBZone SBs. 

You mean contracts awarded under the SDVOSB and HUBZone programs, correct? The clause would apply to an SDVOSB or HUBZone SB that won a small business set-aside. 

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Retread, you are right, it is not awarded to the CTA.  There are technically three contracts, one each awarded to A, B, and C ( I believe for the full contract value for each). But the CTA members don't have to meet the limitations clause on their own individual contracts. GSA says the 50 percent can be allocated across the total contract value, as the CTA members please:

 

Under an MAS CTA the Team must perform fifty percent (50%) of the value of the work in the aggregate. For example, on a team consisting of three contractors, the Team Leader could perform thirty percent (30%) of the work and each Team Member could perform ten percent (10%) of the work to meet the fifty percent (50%) requirement. The remaining fifty percent (50%) of the work may be performed by subcontractors working under any of the team members Schedule contracts. Socioeconomic restrictions do not apply to subcontractors; i.e., they may be large business.

 

https://www.gsa.gov/buying-selling/purchasing-programs/gsa-schedules/small-business-utilization

 

H2H, I agree, it's perverse, isn't it!! I don't think what D is billing C is relevant, though - D doesn't even have to have a schedule contracts or rates.

 

There certainly are a lot of ways for large businesses to benefit from setasides, aren't there.

 

Happy New Year to all!

 

 

 

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On ‎12‎/‎31‎/‎2019 at 12:17 PM, here_2_help said:

Still--shouldn't Company D be billing its own rates and costs to Company C?

This is not an uncommon practice.  Agencies want to use a particular contractor to do some work, but don't want to go through a competition and can't justify a sole source.  Thus, they reach out to a contractor holding a GSA schedule contract issue an order to that contractor and have the contractor sub out all the work to the designated company that the agency wanted in the first place.  This is a scam and some body is going to get burned on this some day.

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Well some competition is required, see 8.405. 

There are for sure some loopholes connected with setasides though. As was previous discussed in this forum:

Large business files subcontract plan agreeing to subcontract x percentage to small company.

Large business subcontract x to small business y.

Y subcontracts 100 percent to a large business.

 

As far as i know, this is still okay? 

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