When it comes to structuring contractor teaming arrangements, the economy has become more challenging to small business owners. Government contracting is also becoming more challenging and hard to bid.
However, survivors are aggressively finding teaming partners to perform those federal projects that are left. The focus on teaming arrangements in federal contracts is becoming more popular in that companies are reducing overhead by teaming with other businesses when submitting bids to the federal government.
Government contracting allows for structuring of teaming arrangements. Large Department of Defense contractors and small businesses rely on the teaming approach to better increase their chances of award. It is important to understand the legal enforceability of teaming agreements in a court of law.
Source selection evaluation boards may sometimes ask bidders to give a copy of the teaming agreement to “solidify” the agency’s trust that there actually is an intended relationship. Bidders should not misconstrue this to mean that a teaming agreement is an enforceable contract.
- Learning how to structure contractor teaming arrangements means anticipating problems, becoming aware of the legal limitations and having a thorough understanding of Federal Government contracting laws.
- Structuring contractor teaming arrangements has been heavily litigated on the issue of whether they are enforceable contracts.
- The two primary cases are Cyberlock Consulting, Inc. v. Info. Experts, Inc. and X Technologies, Inc. v. Marvin Test Sys., Inc.
Things You Should Know About Teaming Arrangements
A few things that companies should be aware of include:
- Having a clear and concise teaming agreement that spells out the terms and conditions of the agreement
- The teaming agreement must articulate the percentage of work that each party will complete
- Who is responsible for what critical part of the project
- You should have a separate subcontract
Approval of 8a Teaming Arrangements
When it comes to 8a teaming arrangements, the Small Business Administration (SBA) generally approves the relationship. However, this does not force the contracting officer to accept. More specifically, if there is a question about one or all party’s ability to perform the project, the challenge should be raised with the SBA.
For non 8a teaming arrangements, then the agency contracting officer will make a final determination and request supplemental information if necessary. Forming teaming agreements suggests that business owners must know the other party’s background. Performing due diligence is key to forming this type of relationship.
However, the more successful companies turn to a government contracts attorney to draft joint venture agreements or contractor teaming arrangements. As the relationship sours, many contractors find that the agreement did not cover the critical areas to protect their rights.
Avoid Teaming Arrangement Templates
Having a template from an agency website does not equate to a legally sound document. At best, these sites show the basic guidelines to pass muster with the SBA or agency for purposes of contract award.