In some cases, two contractors may choose to combine resources to receive the same government procurement. The prime contractor and the subcontractor will enter into a teaming agreement in which the terms of their shared resource allocation, data sharing, and termination will be discussed. This subcontract will eventually be superseded by a fully negotiated subcontract after the government accepts the prime contractor’s bid. Nevertheless, it is important to carefully consider the terms of the teaming agreement to ensure success during the duration of the awarded contract.
There are many business provisions that should be considered when entering a teaming agreement, and each can have a large impact on the success of the partnership. Some provisions that should be addressed prior to signing the agreement include exclusivity, duration, obligations, security, and others depending on the case. Due to the nuances involved in this sort of agreement, and in government contracting as a whole, it is wise to seek legal counsel before signing any subcontract.
There are many reasons that a company might want to enter into a teaming agreement. Contracts of this sort are often advantageous for all parties involved, as the subcontractor and prime contractor each receive benefits that would otherwise be impossible on their own. For example, the smaller subcontractor will likely gain access to more resources than would be possible on their own. The larger prime contractor, however, may minimize their costs and maximize their resource control.
If you want to enter a teaming agreement to receive a government contract, contact an attorney at the Federal Practice Group to schedule a consultation.