The contractor’s teaming agreement is a marketing tool. With this tool, the main contractor and subcontractor agree to combine their resources and bid on a government job.

What’s going on with the contractor teaming agreement?

A teaming agreement will often include the subcontractor’s bid as part of the exhibits. It also includes the prime contractor or principal contractor may also include his own bid as an exhibit.

In cases when the partnership agreement reach to its limit, the prime contractor use the subcontractor on the bid. Both parties are expected to comply with the Teaming Agreement once it has been received.

Teaming agreements sometimes benefit smaller firms that would otherwise not be competitive enough to bid. The tool is also beneficial to the prime contractor, as it allows for greater cost control.

Legalities of Twinning contract: 

The legality of a Twinning Contract at government bidding is not a simple contract but a contract between two parties that come under Uniform Commercial Code. Likely, the agreement will not include government procurement regulations, as they will be negotiated later in the subcontract.

Although it’s a non-government contract, the federal government will consider the contract valid till the you know the arrangements and the relationship is disclosed.

For the contract to be valid, the prime contractor include at least three competitive bids from different subcontractors, unless they accept the original subcontractor’s bid.  With a teaming agreement in place, the prime contractor get its requirements.

The vital thing to note is that even with a teaming agreement in place, the prime contractor will be the one to accept full responsibility for the work performed.

A subcontractor get benefits from the fact that a copy of the teaming agreement is with the government tender. In essence, a teaming agreement will serve as a bridge until the final contract is concluded. It is important to remember that all teaming agreements will have to be replaced by a fully negotiated subcontract.

Teaming agreements are different from the letter of intent in that:

• The final contract rests with a third party.
• All of the provisions that govern the relationship between the parties must be included.
• A teaming agreement is binding for both parties involved.

What Provisions Should a Teaming Agreement Address?

 Outline the provisions in your teaming agreement to make sure they are valid. These include:

• Is the agreement exclusive or does either party have the right to change its mind?
• Does the agreement provide an obligation to award the job to the subcontractor?
• What extent do the parties’ rights to confidentiality need protection?
• How can the agreement be terminated?
• Can the subcontractor participate in the negotiation with the customer or the government?
• Agreeing of the prime contractor for providing compensation to the subcontractor

You should address the above factors and other legal issues when drafting a teaming agreement. Each agreement has its own provisions to ensure that the requirements of the job are met.

Background on Contractor Teaming Agreements

There are some requirements for a contractor team arrangement, some of them includes:

• Each member must have a current GSA Schedule contract or be eligible to pursue one.
• They must meet all socioeconomic and small requirements.
• Should agree in a written agreement to work together on the project.
• The signed written consent cannot cause any other interference with other schedule contracts.
• Members must select a team leader who will be responsible for the negotiations and finalization of the contract with the government.

Though there are no formal rules and regulations that govern the use of contractor teaming agreements, you can take help from the website. You can dig more to find how they are using their opportunities.

This blog was written by Linda Rawson, who is the founder of DynaGrace Enterprises (dynagrace.com) and the inventor of WeatherEgg (weatheregg.com). She, along with her daughter, Jennifer Remund make up the mother-daughter duo of 2BizChicks (2Bizchicks.com).  For further information, please connect with Linda on LinkedIn, or contact her at (800) 676-0058 ext 101.

Please reach out to us at GovCon-Biz should you have any questions.