Teaming Agreement to Subcontract Agreement – Bridging the Gap

Table of Contents

• Introduction
• Termination of Teaming Agreements
• Gap Between Teaming Agreement and Subcontract
• Communication and Engagement
• Teaming Agreements as Relationship Building
• Assistance with Bridging the Gap
• Key Takeaways
• About the Author, Kathy Wright

Did you know that most Teaming Agreements self-terminate when the prime and subcontractor agree on the subcontract terms?  It is true!  A typical termination clause in a Teaming Agreement contains a list of events that signal the end of the Teaming Agreement the moment any of those things occur.  For the winning prime and its teammates, the most common termination event is mutual agreement on the subcontract.

Did you also know that very few subcontractors negotiate their subcontracts to reflect the prime’s workshare commitments in the Teaming Agreement?  Signing a subcontract that does not include the workshare covenants in the Teaming Agreement leaves the prime free to issue workshare as it sees fit, and the agreed dollar percentages or Full Time Employees (FTEs) that convinced you to support the prime in the Teaming Agreement may never materialize.  With an expired Teaming Agreement in one hand and a subcontract that does not reference the Teaming Agreement in the other, there is likely no viable contractual recourse to recover the promised workshare. 

There are 2 ways to bridge this gap between the promises of the Teaming Agreement and the realities of the Subcontract Agreement.

1. Negotiate the survival of the workshare commitment section of the Teaming Agreement beyond the expiration of the document or negotiate a clause into the Teaming Agreement that explicitly states that the workshare commitment will be transferred to the subcontract agreement, and then follow up when your subcontract is issued to make sure it appears as agreed. 
2. Negotiate adding the workshare commitment directly into the subcontract agreement. This should be an easy “yes” from your prime in any good faith negotiation. 

If you are reading this and wondering what to do with existing subcontracts that do not reflect the workshare you were promised, however informally, communicate, communicate, communicate.  Find the decision-maker for the prime, noting that this may not be the Business Development team once the prime contract is awarded.  Ask your Subcontract Administrator to introduce you to the company’s Contracts Director.  As talented as the subcontracts team may be, the contracts group is closer to the government customer and may have more sensitivity to its company proposing one plan that relies on subcontracted talent and then executing something different.  They can also bring clarity to regulatory factors that could be impacting your workshare, such as the Limitation of Subcontracting requirements and meeting small business goals.  

If none of these are the drivers behind your decreased workshare, take a hard look at the quality of your deliverables.  Is your company consistently performing well?  Are you ready to backfill those FTEs when one transitions to their next job in the timeline you agreed?  Is the work you provide compliant with the specifications?  How much rework has your team had to perform over quality issues?  Primes, especially large business primes, value subcontractors who bring superior value at a price lower than they can achieve themselves.  Make sure you are bringing that superior value, and the workshare will follow.  

Teaming Agreements should be more than just documents we sign to bid and win.  Teaming Agreements represent a form of relationships. Remember the reasons the prime wanted you on their team, and the reasons you wanted to join their team and use that dynamic to rebuild the team that both sides envisioned when they signed the Teaming Agreement.  

The BOOST LLC contracts team is ready to help you bridge the gap between your Teaming Agreement and subcontract.  Contact us today!

Key Takeaways

• Many Teaming Agreements self-terminate when the prime and subcontractor agree on the subcontract terms.
• Subcontractors often fail to negotiate their subcontracts to reflect the workshare commitments in the Teaming Agreement, which can lead to the non-materialization of promised workshare percentages or FTEs.
• Two ways to bridge the gap between the Teaming Agreement and Subcontract Agreement are negotiating the survival of workshare commitments or directly adding them to the subcontract agreement.
• Communication is crucial in addressing discrepancies and ensuring workshare commitments are honored.
• Engaging with the decision-maker and the contracts director of the prime can help clarify and resolve issues related to workshare.
• Factors such as regulatory requirements and the quality of deliverables can also affect workshare allocations.
• Teaming Agreements should be seen as more than just bidding documents, representing relationships and shared visions.
• Professional assistance, such as BOOST LLC’s contracts compliance services for GovCons, can aid in bridging the gap between Teaming Agreements and subcontracts.

About The Author, Kathy Wright

Kathy Wright is a contracts and procurement professional with more than 30 years of experience working with government and commercial contracts.  She has worked for both small and large businesses and has developed a contracts management style that blends agility with process improvement.