What Are Teaming Agreements?

A teaming agreement joins two or more companies together to complete a project.

Small business owners use teaming agreements when joining forces with other companies to obtain work that is out of their reach alone. A small business owner may hear about a large job available. If the business owner is interested in the job but knows he cannot do it alone, he may ask another company or two to partner with him for the sole purpose of completing this one project.

Purpose

A teaming agreement is created when two or more companies come together for the completion of a specific job or project. This agreement states the details of the joint venture, including each party's obligations and rewards. A teaming agreement allows businesses to complete work that is normally out of their reach by merging with other companies. When two or more companies join together for this type of venture, both companies bring certain skills and resources to the job, allowing the job to be completed jointly.

Uses

Teaming agreements are generally used when projects are available through state or federal government agencies. A government agency posts a particular job and agrees to accept bids from contractors. Two or more contractors then join together, create a proposal for the job and create a teaming agreement to outline the details of the work arrangement.

Requirements

A teaming agreement is created for the sole purpose of one particular project. The agreement must contain all parties involved in the project and the specialization of each company. It must also include the responsibilities of each party and the amount of money each party will receive from the job. To avoid misunderstandings, a teaming agreement should be clear and detailed, outlining all aspects of the project.

Advantages

The main advantage of a teaming agreement is that it allows small businesses a chance to become part of large projects. A small business may only have a small percentage of the workload of the project, but without a teaming agreement, the business would not receive any percentage of the job. Teaming agreements also provide experience to small businesses and may open doors to other projects in the future.

References

• Garvey Shubert Barer Law: Teaming Agreements, Joint Ventures and Subcontracting
• RCR Administrators: Types of Agreements