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:

1. Protection of confidentiality and data
2. The exclusivity of the subcontractor to the team
3. The subcontractor’s participation in negotiations with the government
4. The prime’s obligation to give a subcontract to each of its team members
5. Compensation.

When drafting a teaming agreement, it is advisable to consult an experienced government contracts law attorney.

Teaming Agreement Tips

1. It is important to put confidentiality and nondisclosure obligations down in writing.
2. Teaming agreements typically address survival of confidentiality obligations beyond termination and/or expiration of the agreement.
3. Teaming agreements define the team members’ exclusive or nonexclusive involvement with the team.
4. The agreement will also include a “No Hire” clause, preventing either party from hiring the other’s employees for a specified period of time.
5. Mutual indemnification will hold one party harmless against any direct, incidental and consequential costs arising from the other party’s actions.
6. The agreement should cover acknowledgement and understanding regarding ownership of intellectual property arising under the performance of the prime contract.
7. The agreement places clear limitations on assignability of the obligations.
8. 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.
9. 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.