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What is a Teaming Agreement?
A teaming agreement is a legal contract entered into by a government contractor and another party. These agreements are very common in government related contracting and are used by contractors who want to find work with partners that can increase the effectiveness of their job(s). Teaming agreements are regulated by the Federal Acquisition Regulation (FAR).
Read this material if you are interested in learning more about teaming agreements.
Pros and Cons of Teaming Agreements
Teaming agreements can be extremely beneficial for some contractors but can also have negative elements depending on the situation. Below are some pros and cons of teaming agreements:
Pros of a Teaming Agreement
- Allows a contractor to build a team by partnering with an individual or firm that can contribute their resources, skills, and knowledge in a particular area.
- Teaming agreement parties are pretty much obligated to perform the work they agree upon with one another without worrying about any other employee being brought into the picture for the same job.
- The parties to the agreement can add as many means for termination sections to the contract as they feel are appropriate.
- Individuals or companies are able to bring their diversity and differing mindsets to the table to get a job done without having to work for the same entity right off the bat.
- The contractors are asked to provide an estimate for what the costs will end up being upfront so that risks are minimized.
- As long as subcontracting laws are followed the teaming agreement parties will not be viewed as affiliates so small business rules will not be of concern for the temporary workers.
Cons of a Teaming Agreement
- The sections need to be very carefully written or they otherwise may not have legal standing in the event one of the teammates wants to dispute a matter in court. There have been prior incidents where this happened and the court found that certain parts of the agreement were not enforceable.
- The agreements typically only apply to one project or group of tasks making it necessary to renegotiate every time a new job is proposed. This means that each time a new agreement is put into place a new teaming agreement will need to be discussed and put into writing.
- A subcontractor who was hired by the main (prime) contractor may not come to agreeable terms which can make the process difficult.
- If a contractor other than the main one becomes part of the team to complete certain work and does not do too great of a job the blame will fall on the prime contractor since this individual is the only person contracted with the government.
To get a better idea of the positive and negative sides of a teaming agreement you can view this article .
Key Terms in a Teaming Agreement - Checklist
The checklist below is a guide for what key topics you should include in a teaming agreement for completeness and effectiveness:
- Purpose - a clearly explained goal with the reason for establishing a partnership to accomplish it.
- Duration - state how long the job will last and what the anticipated start and finish dates are.
- Scope of work - describe in detail what each party will be expected to do and what milestones exist for completion of selected tasks.
- Pay schedule - state what payments will be made to who and when.
- Exclusive relationship - add a part in the agreement that leaves no room for confusion about whether the same contract is allowed to be worked on elsewhere with someone different.
- Proposal fees and charges - mention how the proposal costs will be paid and who will pay for what.
- Privacy - add notes stating if anything will not be considered confidential information and can be shared or vice versa.
- Legal components - identify and make known all the laws, regulations, and compliance aspects that apply to the teaming agreement members and share how or where they will be used if a reason arises.
- Insurance - include a section that specifies who will be responsible for work related insurance as well as all details surrounding it such as the total cost and types of coverage.
- Liability limitations - if there will be limits as to the liability that can be placed on one or more team members then this section should be attached to the agreement with specifics on the extent and type of limitations.
- Tax costs - note the amount of taxes and which ones each party will pay and state what penalties one will face if they do not pay as required.
- Assignments - this section should be visible in the agreement so that no one is left wondering whether duties set out can be assigned out.
Visit this webpage to learn more about what to include in a teaming agreement.
Teaming Agreements vs. Joint Ventures
A joint venture differs from a teaming agreement because it involves two or more companies who create a totally separate legal business to assume position as a prime contractor. Members of the joint venture have similar levels of control, liability, and profits.
On the other hand, a teaming agreement consists of only one prime contractor who maintains control over a subcontractor who does not share the same level of responsibility for performance, profit, direction, or liability.
Read this article for a detailed description of teaming agreements compared to joint venture agreements.
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Teaming Agreement vs. Subcontract
A teaming agreement is a legally binding agreement between a prime contractor who coordinates directly with a government contact opposed to a subcontractor who is actually monitored and taken on by the prime contractor. A subcontractor does not have any connection to the government partner like the prime contractor does. Primary differences of the two contracting types are displayed below:
- A GSA schedule must exist and the business or individual must be registered with the federal system known as SAM.
- Responsibilities are determined based on what is in the agreement.
- The government can be directly contacted for work being performed.
- Payments are made based on the rate listed in the agreement, an order, or the GSA schedule.
- Work can be completed in full due to the team efforts of all parties connected to the teaming agreement.
- No GSA or SAM registration is required.
- Responsibilities are agreed upon but the subcontractor is not held accountable for insufficient work.
- The subcontractor cannot interact directly with the government and any questions or concerns must go through the prime contractor.
- Payments are made in line with the GSA schedule after any relevant subtractions are made.
- Supplies and services may be limited based on relying on only the prime contractor and not having a larger enterprise.
Examples of When to Use a Teaming Agreement
You should use a teaming agreement under the following circumstances:
- You as a prime government contractor are seeking a subcontractor to perform a specific task under your direction that is aligned with an active federal contract.
- You and other contractors involved want to bring your skillsets together to find a total solution and have numerous resources at your fingertips.
- You want to boost your competition and reputation as a contractor by working with others who are highly regarded.
- You want to possibly become part of a master teaming agreement that will allow you to broaden the duration and scope of your federal contract.
Get Help with a Teaming Agreement
If you believe a teaming agreement is right for you then you should reach out to a knowledgeable government contracts lawyer who specializes in reviewing and writing them. Post a project in ContractsCounsel’s marketplace to get free bids from vetted lawyers to draft or review a teaming agreement.
Meet some of our Teaming Agreement Lawyers
My clients know me as more than just an attorney. First and foremost, my background is much broader than that. Prior to attending the Valparaiso University School of Law, I earned a Master of Business Administration and ran a small business as a certified public accountant. Thanks to this experience, I possess unique insight which in turn allows me to better assist my clients with a wide range of business and tax matters today. In total, I have over 20 years of experience in financial management, tax law, and business consulting, and I’m proud to say that I’m utilizing the knowledge I’ve gained to assist the community of Round Rock in a variety of ways. In my current practice, I provide counsel to small to medium-sized businesses, nonprofit organizations, and everyday individuals. Though my primary areas of practice are estate planning, elder law, business consulting, and tax planning, I pride myself on assisting my clients in a comprehensive manner. Whenever I take on a new client, I make an effort to get to know them on a personal level. This, of course, begins with listening. It is important that I fully understand their vision so I can help them successfully translate it into a concrete plan of action that meets their goals and expectations. I appreciate the individual attributes of each client and know firsthand that thoughtful, creative, and customized planning can maximize both financial security and personal happiness. During my time as a certified public accountant, I cultivated an invaluable skill set. After all, while my legal education has given me a deep understanding of tax law, I would not be the tax attorney I am today without my background in accounting. Due to my far-reaching experience, I am competent in unraveling even the most complex tax mysteries and disputes. My CPA training benefits my estate planning practice, too. In the process of drafting comprehensive wills and trusts, I carefully account for every asset and plan for any tax burdens that may arise, often facilitating a much smoother inheritance for the heirs of my clients. Prior to becoming certified as a CPA, I made sure to establish a solid foundation in business both in and out of the classroom, and the acumen I’ve attained has served me well. Not only am I better able to run my own practice than I otherwise would be; I am able to help other small business owners fulfill their dreams, as well.
Hello! I am a young attorney with four years' experience in real estate transactions, fund formation, and general corporate transactional work. I graduated in 2016 from the University of Texas - Austin and I am barred in Texas.
Billy Joe M.
I graduated from the University of Illinois at Urbana-Champaign in 2006 with a degree in Political Science, Finance, and Economics. I stayed around Champaign for law school and graduated in 2009. I then worked at a big law firm in downtown Chicago. It was boring, so I quit in early 2011. I thought that I could not be happy practicing law - I was wrong. After I quit the traditional law firm life, I began representing my own clients. I realize now that I love helping normal people, small business owners, and non-profits address a variety of legal issues. I hope to hear from you.
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I graduated from Harvard Law School and worked first for a federal judge and then a leading DC firm before starting a firm with a law school classmate. My practice focuses on company formations, early-stage investments, and mergers & acquisitions.
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G'day, my name is Michele! I work with startups, entrepreneurs and small/medium-sized businesses across the country in a wide array of industries. I help them with all of their ongoing, daily legal needs. This includes entity formation, M&A, contract drafting and review, employment, asset sale & acquisition, and business sales or shareholder exits. I'm half-Australian, half-Italian, and I've lived the last 20+ years of my life in America. I've lived all over the USA, completing high school in the deep south, graduating cum laude from Washington University in St. Louis, and then cum laude from Georgetown University Law Center. After law school I worked for the Los Angeles office of Latham & Watkins, LLP. After four intense and rewarding years there, I left to become General Counsel and VP of an incredible, industry-changing start-up called Urban Mining Company (UMC) that manufactures rare earth permanent magnets. I now work for Phocus Law where I help run our practice focused on entrepreneurs, startups, and SMEs. I love what I do, and I'd love to be of help! My focus is on providing stress-free, enjoyable, and high-quality legal service to all of my clients. Being a good lawyer isn't enough: the client experience should also be great. But work isn't everything, and I love my free time. I've been an avid traveler since my parents put me on a plane to Italy at 9-months old. I'm also a music nut, and am still looking for that perfect client that will engage me to explain why Dark Side Of The Moon is the greatest album of all time. Having grown up in a remote, and gorgeous corner of Australia, I feel a strong connection to nature, and love being in the elements.
Attorney Greg Corbin is the founder and principal of Signal Law in Denver, Colorado. A top-rated trial and transactional lawyer with more than seven years of total legal experience, Mr. Corbin provides exceptional counsel and support to clients across the greater Denver metro and surrounding areas who have legal needs involving any of the following: business and corporate law; contracts and agreements; incorporations, partnerships and other entity formation and dissolution services; and ongoing business counsel for emerging and expanding commercial enterprises. Utilizing the latest in cost-saving technologies and advanced automation, Mr. Corbin has established his practice as a modern law firm ready for the future, and he strives to provide the highest level of representation to his clients and help them achieve their goals and the favorable outcomes they seek as efficiently and cost-effectively as possible. He has gained a reputation for his innovative solutions as well as his transparent pricing structure and responsiveness when dealing with his clients. In recognition of his outstanding professionalism and service, Mr. Corbin has earned consistent top rankings and endorsements from his peers as being among the top lawyers in his region for business law and transactions. A 2008 graduate of Kansas State University, Mr. Corbin obtained his Juris Doctor from Boston University School of Law in 2013. The Massachusetts Bar Association admitted him to practice that same year, and the Colorado State Bar Association admitted him in 2015. Mr. Corbin is an active member of the Denver Bar Association and the Colorado State Bar Association, among his other professional affiliations, and he supports his local community through his involvement with Project Worthmore and Biking for Baseball, where he serves on the boards of directors.