Teaming Arrangements Guide: Partnering Strategies for Government Contracts
Complete guide to teaming arrangements for federal contracting. Learn about prime-sub relationships, joint ventures, teaming agreements, best practices, and how to find and structure successful partnerships.
Quick Answer
A teaming arrangement is an agreement between two or more companies to pursue a government contract together, typically as a prime contractor and subcontractor(s). Unlike joint ventures, teaming arrangements don't create a separate legal entity. They allow companies to combine capabilities, meet requirements, and share risk on contracts neither could win alone.
What is a Teaming Arrangement?
A teaming arrangement is an agreement between companies to work together on a specific procurement opportunity. One company serves as the prime contractor while others commit to serving as subcontractors if the team wins the contract.
Unlike joint ventures, teaming arrangements don't create a new legal entity. Each company maintains its independence and the prime contractor holds the contract with the government. The relationship between team members is governed by the teaming agreement and subsequent subcontracts.
Common Teaming Scenarios
- Large business prime with small business subcontractor (meet SB goals)
- Small business prime with large business subcontractor (technical depth)
- Multiple firms combining capabilities for complex requirements
- Incumbent teaming with challenger to strengthen recompete bid
- Regional contractor partnering with national firm for geographic coverage
Types of Teaming Structures
Different teaming structures serve different purposes. Choose the right structure based on your goals and the opportunity requirements.
Prime-Subcontractor
Most Common Structure
One firm holds the prime contract and is responsible to the government. Other team members perform as subcontractors under the prime.
Joint Venture
Separate Legal Entity
Creates a new entity that holds the contract. Both parties share control, profits, and liability. Often used for set-aside contracts under mentor-protégé programs.
Contractor Team Arrangement (CTA)
Formal FAR-Defined Structure
Defined in FAR 9.6. Two or more companies form a team where each company may hold a portion of the contract directly. Less common than prime-sub structure.
Benefits of Teaming
Benefits for Small Business
- • Access to larger contract opportunities
- • Leverage partner's past performance
- • Gain experience and build track record
- • Learn from established contractors
- • Share proposal costs (B&P)
- • Reduce performance risk
- • Access partner's resources and facilities
Benefits for Large Business
- • Meet small business subcontracting goals
- • Access set-aside contracts through JVs
- • Gain specialized or niche capabilities
- • Reduce labor costs on certain tasks
- • Improve proposal competitiveness
- • Expand geographic coverage
- • Fill capability gaps without hiring
Teaming Agreement Essentials
A well-crafted teaming agreement protects both parties and establishes clear expectations. Here are the key elements to include.
Essential Teaming Agreement Terms
Define each party's responsibilities clearly
Whether parties can team with competitors
Percentage or dollar value of work for each party
How proposal costs are split between parties
Agreement to enter subcontract if team wins
Protection of proprietary information
How either party can exit the arrangement
Process for resolving disagreements
Legal Review Required
Always have an attorney experienced in government contracting review your teaming agreement. Poor agreements have led to costly disputes, especially when one party feels cheated on work share after contract award.
Finding the Right Partner
Industry Events
Attend agency industry days, conferences, and small business matchmaking events. These are designed for networking.
Prime Contractor Websites
Large primes have supplier portals and small business liaisons. Register and make your capabilities known.
SBA SUB-Net
Database of subcontracting opportunities posted by prime contractors seeking small business partners.
Professional Associations
Join industry associations like NDIA, PSC, NCMA, or AFCEA to network with potential partners.
Competitive Intelligence
Research who holds similar contracts, their team members, and potential recompete opportunities.
PTACs
Procurement Technical Assistance Centers can introduce you to teaming partners and facilitate connections.
Partner Evaluation Criteria
Complementary Capabilities
Does the partner bring skills or resources you lack?
Past Performance
Strong CPARS ratings and relevant contract history?
Financial Stability
Can they perform without financial difficulties?
Cultural Fit
Compatible work styles and values?
Reputation
Known for fair dealing with partners and subs?
Strategic Value
Potential for long-term relationship beyond this bid?
Negotiating Terms
Key Negotiation Points
Work Share Percentage
Agree on specific percentages or dollar amounts. Consider both ceiling and floor values to protect against scope changes.
B&P Cost Split
Who pays for proposal preparation? Common splits are proportional to work share or based on who performs which sections.
Subcontract Type
Will subcontracts be fixed-price, T&M, or cost-reimbursable? This affects risk allocation significantly.
Key Personnel
Which positions does each party fill? What happens if key staff leave?
Task Order Competition
On IDIQ contracts, how are task orders allocated among team members?
As a Small Business
- • Negotiate minimum work share guarantees
- • Ensure meaningful (not token) work
- • Get commitments for mentoring/development
- • Protect your proprietary information
- • Negotiate fair payment terms
As a Prime Contractor
- • Maintain control over contract execution
- • Ensure sub can perform committed work
- • Include performance standards in sub agreement
- • Reserve right to supplement with other resources
- • Establish clear communication protocols
Risks & Pitfalls
Work Share Reduction
Primes sometimes reduce subcontractor work share after winning. Protect yourself with minimum guarantees and clear remedies in the teaming agreement.
Exclusivity Traps
Signing exclusive teaming agreements locks you out of other opportunities. Limit exclusivity to specific opportunities and set expiration dates.
Unenforceable Agreements
Vague teaming agreements may not be legally enforceable. Courts have found some teaming agreements to be mere "agreements to agree" with no binding effect.
OCI Issues
Teaming with a competitor or company with access to sensitive information can create Organizational Conflicts of Interest that disqualify the entire team.
Affiliation Risks
Overly close teaming relationships can trigger SBA affiliation rules, potentially disqualifying small businesses from set-asides.
Frequently Asked Questions
Is a teaming agreement legally binding?
It depends on how it's drafted. Some teaming agreements are binding contracts; others are mere letters of intent. Include specific obligations, consideration, and clear terms to make it enforceable.
Can I be on multiple teams for the same opportunity?
Only if your teaming agreements allow it. Many agreements include exclusivity clauses preventing this. Also consider whether the government or your partners would view this negatively.
What if the prime doesn't honor the work share?
Your recourse depends on your teaming agreement terms. Options include negotiation, mediation, arbitration, or litigation. Strong agreements include specific remedies for work share reductions.
How do I know if a teaming partner is trustworthy?
Check references from their current and former subcontractors. Review their subcontracting plan achievements. Ask about payment history. Look for red flags in their reputation within the industry.
When should I consider a joint venture instead?
JVs make sense when you need the small business status of one partner for set-asides, when both parties want direct government contract experience, or when the opportunity is large enough to justify the administrative overhead.
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