Teaming Agreement

A teaming agreement is a binding or non-binding pre-award document in which two or more companies agree to collaborate on pursuing a specific government contract opportunity, designating one as the prime and the others as proposed subcontractors, and outlining their respective workshare, responsibilities, and commitments.

What is a Teaming Agreement?

Teaming agreements are governed by FAR 9.6, which explicitly permits contractors to team when doing so serves a legitimate business purpose. They are commonly used when no single company possesses all the technical capabilities, past performance, or socioeconomic certifications required to win a contract on its own.

A well-structured teaming agreement typically covers the designated prime contractor and subcontractors, the specific opportunity being pursued, each party's scope of work and expected workshare percentage, exclusivity provisions (whether the parties will pursue the same opportunity with other teams), what happens if the proposal is not selected, intellectual property ownership during the proposal phase, cost-sharing for proposal preparation, and the transition from teaming agreement to formal subcontract upon award.

The agreement does not itself create a subcontract, that comes only after contract award. Courts have found that teaming agreements are enforceable contracts in some states, particularly when they include specific workshare commitments. If a prime wins and then fails to give the agreed workshare to the teammate, the teammate may have grounds for a lawsuit, though outcomes vary by jurisdiction and agreement language.

Teaming strategies should also account for organizational conflicts of interest (OCI), which can disqualify a team if one member's work on a related contract gives them an unfair advantage or the appearance of bias. Read more in our teaming agreements and joint ventures guide.

Why Teaming Agreements matter for government contractors

Teaming expands the range of contracts a company can pursue by letting it borrow complementary capabilities, past performance, and certifications from partners. Small businesses team with large primes to gain access to larger vehicles; large primes team with small businesses to meet set-aside subcontracting goals. A robust teaming network is one of the most durable competitive assets in the federal market.

Example

A large defense IT firm wants to bid on a $40M Air Force logistics software contract that requires a woman-owned small business (WOSB) teammate for a set-aside subcategory. The firms execute a teaming agreement committing 25% workshare to the WOSB for database administration services. If the team wins, the subcontract formalizes the arrangement; if they lose, the teaming agreement expires without obligation.

Frequently Asked Questions

Is a teaming agreement the same as a joint venture?

No. A teaming agreement designates a prime and subcontractors within a single company's proposal. A joint venture creates a new legal entity or formal arrangement in which two companies co-own the contract vehicle. Joint ventures are more complex but can allow both parties to count the contract toward their own past performance.

Does a teaming agreement guarantee workshare after award?

Not automatically. Enforceability depends on state law and the specificity of the agreement's language. Vague "good faith" teaming agreements have been held unenforceable, while agreements with specific dollar or percentage commitments have been upheld. Always have legal counsel review the document before signing.

When should we execute a teaming agreement?

Ideally before proposal submission, and in practice, well before the RFP drops, since the best partners are often committed to other teams by the time an opportunity is officially released.

Can a company be on multiple teams for the same opportunity?

Exclusivity clauses in teaming agreements typically prohibit this. Without an exclusivity clause, a company could theoretically be on competing teams, but doing so damages relationships and is widely viewed as unethical in the GovCon community.