Teaming agreements, joint ventures, and strategic alliances can be effective arrangements for two or more contractors seeking to pool resources (and share costs) in pursuit of government contracts. Typically these arrangements create a general framework in which the parties agree to pursue certain contracts, leaving most specific details to be negotiated upon contract award.
Prior to entering into one of these relationships, contractors should consider a series of distinct but interlocking considerations:
- whether any or all of the parties shall be prohibited from pursuing any particular contracts individually or as part of another team;
- the ability of a party to exit from or terminate the agreement and any ongoing post-termination obligations;
- a process for resolving disputes between the contractors short of litigation;
- the sharing of proposal preparation costs;
- the licensing of intellectual property between parties to reflect any customer-mandated licensing requirements;
- ownership and licensing of any jointly developed intellectual property; and
- whether the prospective arrangement will be classified as an affiliated relationship (i.e., a single entity) for size determination purposes.
Agreement on these key business issues is crucial to successful contractor arrangements. It enables both parties to avoid disagreements on core matters during the negotiation process for an awarded contract.
A successful teaming arrangement is a careful balancing act of each party's interests requiring expertise in corporate law, government contracting and intellectual property.
How do we accomplish this? Our Government Contracts Group is a team of attorneys with cross-practice expertise that work closely with our clients to identify and leverage their strengths in support of their particular goals. If requested, we also assist in performing due diligence of prospective teaming partners to confirm, among other things, a potential team member's financial condition, reputation in the industry, ability to create a proposal, and ability to perform its responsibilities.