Even if the agreement is not a government contract, the federal government must consider the contract to be valid as long as the agreements have been identified and the relationships disclosed in the offer. Instead of designing only generic team agreements for your next government contract, your contest will attempt to file a small protest and attack your team agreement with your potential subcontractor. For the contract to be valid, the principal contractor must include at least three competitive offers from different subcontractors, unless the initial subcontractor`s offer has been accepted from the first contract. Thanks to a team agreement, this exempts the main contractor from this requirement. When you enter into a Prime/Subcontractor contract, the principal contractor rejects the work that must be performed by the subcontractor. There may also be additional requirements as to the amount of work each partner can do in a Prime/Subcontractor relationship, especially when an opportunity is awarded as part of a certain small business land freeze. A team agreement in the federal contract includes two or more companies that pool their resources to award a government contract. Small businesses want to avoid running a team contract with large companies. This causes serious problems with the SBA membership rules. The team relationship under public procurement laws is in fact a traditional premium and subcontracting relationship. Government team contracts should be written for a particular contract, and small businesses should avoid establishing general models and using the agreement for multiple contracts. In the legal sense of the term, the entity that has the rights to set the conditions and assumes responsibility has the exercise of the contract.
In a CTA, the contract practice belongs to each team member and, therefore, each team member can interact with the federal government. Under the agreement, each member is fully responsible for all tasks defined in the CTA document. This means that if contractual obligations are not met, both companies can be fully accountable and subject to all sanctions. Unlike the main contractors, the subcontractors do not work directly with the government, but for other contractors. Some government contracts require large companies to contract with a small business. This creates more opportunities for small businesses to participate in the federal allocation. The CTA differs from a partnership between a principal contractor and a subcontractor by the fact that all team members are equal contractors. Other important differences are described below: FAR 9.601 uses the « Team-Arrangement » team as a description of different team relationships to include joint venture relationships in which the two companies merge and act as a principal contractor (retain their distinct identity); an equipment agreement whereby one company acts as a principal contractor and the other agrees to become the subcontractor under a given federal contract or contract program.