Subpart 9.6 - Contractor Team Arrangements

Overview

FAR Subpart 9.6 defines and regulates Contractor Team Arrangements (CTAs), which allow two or more companies to combine resources to bid on and perform government contracts. The subpart outlines the two recognized structures for these teams—joint ventures or prime-subcontractor relationships—and establishes the government's policy of recognizing these arrangements provided they are fully disclosed and do not violate antitrust laws.

Key Rules

• Dual Definitions of CTAs: The FAR recognizes two specific types:
  1. Two or more companies forming a partnership or joint venture to act as a single potential prime contractor.
  2. A potential prime contractor entering into an agreement with one or more companies to act as its subcontractors for a specific acquisition.
• Disclosure Requirement: For the government to recognize the validity of a CTA, the arrangement must be fully disclosed in the offer. If formed after the offer is submitted, it must be disclosed before the arrangement becomes effective.
• Timing of Formation: Arrangements are typically formed before proposal submission but can be entered into later in the acquisition process, including after the contract has been awarded.
• Antitrust Compliance: Team arrangements are not a shield against antitrust violations; they must comply with all statutes regarding fair competition.
• Prime Contractor Liability: Despite the team structure, the government holds the prime contractor fully responsible for total contract performance.

Responsibilities

• Contracting Officers:
  • Must evaluate the responsibility of the prime contractor based on the stated team arrangement (per FAR Subpart 9.1).
  • Must manage consent to subcontracts where required (per FAR Subpart 44.2).
  • Responsible for managing data rights and ensuring the government's interests in competitive contracting and "component breakout" are protected.
• Contractors (Industry):
  • Must identify and fully disclose all company relationships within the team in their written proposals.
  • Must ensure that the team provides the "best combination of performance, cost, and delivery."
  • The Prime Contractor is responsible for all performance outcomes, regardless of subcontractor failures.
• The Government (Agency):
  • Must recognize the integrity of valid, disclosed CTAs and refrain from normally requiring or encouraging their dissolution.

Practical Implications

• Small Business Scaling: This subpart provides a vital pathway for small businesses to "team up" to meet the requirements of large-scale or high-complexity contracts (like R&D or major systems) that they could not perform individually.
• "Pass-Through" Risk: Because the government holds the prime contractor fully responsible (FAR 9.604(e)), a prime contractor must have robust "flow-down" clauses in their private teaming agreements. If a subcontractor fails, the government looks only to the prime for a remedy, regardless of the subcontractor's size or role.
• Technical Synergy: CTAs allow companies to fill "capability gaps." For example, a company with high-level software expertise might team with a hardware manufacturer to provide a "best of breed" solution that neither could offer alone, potentially increasing their technical evaluation score.
• Antitrust Scrutiny: Companies must be careful that teaming doesn't look like "bid-rigging" or a way to limit competition. If two dominant players in a niche market team up, the government may scrutinize the arrangement more closely under antitrust limitations.