We know that for a small business contractor to become successful, the business should aspire to build capacity and one method for developing capacity is by forming Teaming Agreements.
FAR 9.06 calls the agreement “Contractor Teaming Arrangements” but many contractors call it simply “Teaming Agreement.” It’s up to the partners to determine what the agreement will look like and it’s important that the Prime and Sub Contractors be on the same page of the Teaming Agreement. Teaming Agreements should be very specific to avoid problems with your partner and the contracting agency.
These are general rules in forming a Teaming Agreement:
- State that the purpose and the goals of the Teaming Agreement is to build capacity. Give details of the Prime Sub arrangement that will follow if the contract is won.
- Be specific regarding who is Prime, who is Sub, who is manager; What are the roles of the partners, what are the deliverables, what are the resources brought to the project?
- Be specific on compensation, is there a percentage split or is it equal? How do you measure equity (i.e., voting rights, ownership rights)?
- How is the partnership to be dissolved or terminated? Is voluntary dissolution an option? What happens if a partner becomes disabled or goes bankrupt?
Written by Benny A. Gutierrez, PTAC Procurement Specialist