Yes, a government agency can participate, if it is represented through a government lab or Federal Funded Research ad Development Center. As such, it can count as one of the partners/member institutions, although the lead partner must be a US academic or non-profit research institution. In the RFP, as indicated in Section IV. Eligibility Information. "The collaborating members or institutions participating in each Consortium should bring world-class capabilities into the Consortium and may be drawn as needed from US and foreign universities and government laboratories, Federally Funded Research and Development Centers, and other US and non-US institutions with unique, world-class capabilities."