Subcontractor team arrangement and government contracts

  • Learn how a contractor teaming agreement vs joint venture rules applies to your government contracts.
  • Did you know that your contractor teaming arrangements by themselves may not be enforceable in court?
  • Avoid costly legal mistakes with SBA affiliation.

Small businesses often find that contractor teaming agreement templates found on the internet offer more problems than they resolve. When you find another company that you want to do business with on a future government contract, your subcontract documents must assess the risk, and define the objectives while staying clear of SBA affiliation rules.


Problem: Many government contractors do not fully understand how the new SBA rules impact their companies for potential affiliation.  Team agreement and the ground rules must be complied with to avoid affiliation. Other small businesses sometimes mistakenly apply the rules for similarly situated small businesses. This can be a costly mistake that causes you as the awardee to lose the contract in a small business size protest.

Solution: The immediate solution is to first understand the team agreements and ground rules from legal counsel who understands the nuances for forming contractor teaming agreements; know the difference between a teaming agreement vs joint venture relationships.

Knowing whether or not your teaming agreement template or other generic subcontractor documents can withstand allegations of SBA affiliation in a bid protest should always be a major concern for small businesses and large contractors; avoid simply using teaming agreement templates from the internet.

Although SBA affiliation rules have significantly changed,  team contracts and other types of contract arrangments and independent contractor forms are still being challenged as violation SBA regulations.

  • Using a generic subcontractor contract template causes substantial grief when the competition launches a small business size protest.
  • Templates that do consider the new SBA rules may lead to affiliation.

Companies can avoid this headache early in the bidding phase or simply get professional help from government contract attorneys that understand the problems associated with simply copying and pasting generic team agreements.

Government Contractor Teaming Agreement Services

When it comes to business partnership contracts and helping with government subcontractor teaming contracts, our government small business attorneys provide a wide array of services including:

  • Draft contractor teaming arrangements and review of federal independent contractor forms
  • Federal government subcontractor contract law under FAR 9.601 
  • Avoiding limitation on subcontracting violations and penalties
  • Legal advice on new SBA affiliation rules 13 CFR 121.103 and execution of legal partnership agreements
  • Assessment of similarly situated businesses in each subcontractor agreement
  • Application of joint venture arrangements and SBA affiliation rules to independent contractor forms.
  • Meeting government contracts and CTA small business requirements
  • Understanding the difference between and teaming agreement vs joint venture
  • Some prime and subcontractor team arrangement and joint venture agreement disputes
  • Help with legally binding contract terms
  • Small Business Size protest litigation and appeals to SBA Office of Hearings and Appeals (SBA OHA)

At Watson & Associates, LLC our federal subcontractor agreement attorneys and FAR 9.601 subcontractor contract law consultants provide our clients with detailed guidance and aggressive legal representation that can reduce corporate liabilities while safeguarding company revenues.

When it comes to your government contract subcontractor agreement, we provide over 30 years of combined experience to companies that focus on proactive legal solutions and thinking out of the box. 

FAR 9.601 SBA rules have not eliminated affiliation with contract law and business partnership arrangements

  Although the SBA has since initiated new rules that relax the old affiliation regulations by introducing the theory of similarly situated small businesses in contractor agreements, business partnership contracts, and teaming agreements can still be a dangerous undertaking. At Watson & Associates, our contractor government contract lawyers can help to avoid some of the costly legal pitfalls. See more information about joint venture affiliation under new rules.

Contractor Teaming Agreements and Subcontract Arrangements

Under FAR 9.6, there is no actual team contract definition or description of the contract. Instead, companies entering into small business subcontractor agreements should apply the definition of teaming with the relevant rules to also apply to teaming agreements. This includes 13 CFR 121.103 and federal contracts FAR limitations on subcontracting rules.


During which stage in team formation does contractor teaming agreement compliance matter? 

From the initial stage of bid planning, you should be aware of the statutory requirements under FAR 9.601  and whether or not CTA team arrangements are, by themselves, enforceable contractual agreements in court. Knowing the difference between a teaming agreement vs subcontract is essential when forming a prime-sub relationship under FAR 9.6.

When a bidder represents to the agency that it has entered into a subcontractor agreement, the executed independent contractor form serves to let the agency know that a specific offeror has a valid commitment to perform the project.

  • Courts have ruled that a subcontractor contract does not have the substantive terms of an enforceable teaming agreement. Instead, it is only an agreement to enter into a contract upon the award by the government.
  • Bidders on federal contracts should seriously consider drafting an independent subcontract.
  • This would meet the legal requirements of a contract and the parties’ rights would be enforceable under the subcontract in court.
  • Although FAR 9.601 allows  for general contractor agreements, there are crucial limitations
  • A prime contractor can face harsh affiliation penalties from a bid protest.

Can an Exclusive Teaming Agreement Hurt You?

It depends. An argument can be made that if an exclusive agreement is entered for only the upcoming contract, then it may be ok. However, if you enter into exclusive contract teaming agreements over a long period of time, then there could be an argument made against you to undue reliance over a long relationship.


What Are the Contents of Your Teaming Agreement?

The basic contents of a teaming contract should include:

  • Recitals
  • Definitions
  • Structure
  • Scope
  • Proposal Efforts & Content
  • Termination
  • Expiration
  • Effecting the Subcontract
  • Intellectual Property
  • Damages/Disputes

Initial bidding stage through contract closeout: We also provide legal advice and consulting from the initial bidding stage through the performance stage of the contract regarding team agreements and joint venture agreements. Our government small business attorneys also provide litigation assistance when a small business size standard protest is filed.

CTA Contractor Teaming Agreement and SBA Affiliation – Ostensible Subcontractor Rule

When companies fall astray from the definition of ostensibly under FAR 9.601 or 13 CFR 124.103, there are harsh consequences for drafting an exclusive team agreement for unidentified bids. Our Federal contractor teaming arrangements lawyers help government contractors to avoid costly legal mistakes under the Ostensible Subcontractor Rule.

  • We also review each contract for compliance with the Limitation on Subcontracting Rule under FAR Part 52.219.9.
  • Learn more about similarly situated small businesses and new rule.
  • Be mindful of executing an exclusive teaming agreement

Avoid Costly Legal Mistakes. Register for Joint Venture & Teaming Agreement Training

Additional CTA Enforceability and Contractual Agreement Information

Avoid Costly Legal Mistakes With Hiring Incumbent Personnel Under the Ostensible Subcontractor Rule.

Is your business team partner providing the primary and vital parts of the contract?

Find out whether your agreements are enforceable in Court.

Call Our Federal Teaming Agreements Lawyer

For help with your federal government contractor teaming agreements (CTA), joint venture contracts, or compliance with federal subcontractor teaming and affiliation regulations, or to make sure that you meet the statutory team definition and new SBA rules, call Watson’s government contract attorneys or call 1-866-601-5518 for a FREE Initial Consultation.