Our government spends approximately $500 million annually through contracts and grants. And if you think your business is too small to compete for one of these highly-coveted contracts, think again. A Teaming Agreement might be the perfect solution for those contractors without the resources to win a bid on their own.
What is a Teaming Agreement?
A teaming agreement is a commonly used tool that allows a contractor and subcontractor to combine their resources to bid on a major government contract. A good teaming agreement will cover the following:
- Protection of confidentiality and data
- The exclusivity of the subcontractor to the team
- The subcontractor’s participation in negotiations with the government
- The prime’s obligation to give a subcontract to each of its team members
When drafting a teaming agreement, it is advisable to consult an experienced government contracts law attorney.
Teaming Agreement Tips
- It is important to put confidentiality and nondisclosure obligations down in writing.
- Teaming agreements typically address survival of confidentiality obligations beyond termination and/or expiration of the agreement.
- Teaming agreements define the team members’ exclusive or nonexclusive involvement with the team.
- The agreement will also include a “No Hire” clause, preventing either party from hiring the other’s employees for a specified period of time.
- Mutual indemnification will hold one party harmless against any direct, incidental and consequential costs arising from the other party’s actions.
- The agreement should cover acknowledgement and understanding regarding ownership of intellectual property arising under the performance of the prime contract.
- The agreement places clear limitations on assignability of the obligations.
- The scope of effort, which will be given to each team member should the award be made to the prime contractor, will be clearly defined.
- If the prime contractor is awarded the contract, the teaming agreement states that a subcontract be entered.
For more Teaming Agreement Tips, please contact one of our Offit Kurman attorneys.