Seven Things to Settle Before You Sign a Teaming Agreement
What a small business should agree on with a prime contractor before signing a teaming agreement, from workshare and exclusivity to payment terms.
Teaming agreements are often signed in a hurry, sometimes in the last few days before a proposal is due, and it’s easy to treat them as a formality. For a small business, though, the terms accepted at this stage shape the subcontract it will work under if the team wins.
This is not legal advice, and any agreement worth signing is worth having counsel review. These are the points I would want settled before our name goes on a proposal.
1. Which work is ours
“Support” is not a workshare. Ask for a description of the specific tasks, labor categories, or deliverables your firm will perform after award. A percentage of the work helps too, but it means more when it is tied to tasks you can identify. Otherwise the share can shrink after award and you will have little to point to.
2. Whether the agreement leads to a subcontract
Many teaming agreements say the parties will negotiate a subcontract in good faith after award. That wording is common, and it is weaker than it sounds; courts have treated some of these provisions as unenforceable agreements to agree.
You may not be able to change the overall structure, but you can usually ask for more detail on the expected scope, the contract type, and the main terms the subcontract will contain.
3. How far exclusivity reaches
An exclusivity clause can keep your firm from joining another team pursuing the same opportunity. That may be acceptable. Confirm that it applies only to the specific opportunity, that it ends if the team loses or the solicitation is canceled, and that it doesn’t extend into related work.
4. What happens to the information you share
Proposals involve sharing technical approaches, pricing, and résumés. The agreement should say how proprietary information is marked, who may use it and for what purpose, and what happens to it if the relationship ends.
5. When you get paid
Cash flow matters more to a small firm than to a large prime. Look at how often you can invoice, how quickly payment is due, and whether you get paid only after the prime does. Terms like that can stretch your working capital further than you expect.
6. Which clauses flow down
Primes pass many clauses from the prime contract down to their subcontractors, and some are mandatory. Ask which ones will apply, especially anything involving cybersecurity, data handling, or reporting, since those can carry real compliance costs.
7. How the split fits small business rules
On a small business set-aside, limitations on subcontracting affect how much of the work can go to other firms. Make sure you understand how the team’s division of work fits those rules, whether your firm is the prime or the subcontractor.
Before you sign
Read the agreement with the eventual subcontract in mind. Raise your questions early, while everyone still wants the team to come together, and get the answers in writing. A prime that values what a small firm contributes will usually engage with these points, and how it responds tells you a good deal about the working relationship. If you are putting a team together and need engineering depth, our teaming page explains where we fit.
