Teaming arrangements can enable companies to win contract awards they may not qualify when “standing alone.” Utilizing a teaming arrangement by including a member who can bring a high level of experience, technical capability, and past performance the team can score high on the evaluated criteria of the proposal and win the award.
The Federal Acquisition Regulations (FAR) Subpart 9.6 describes contractor team arrangements as an arrangement in which two or more companies form a partnership or joint venture to act as a potential prime contractor; or a potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program.
There are also a number of benefits for the government to deal with firms involved in teaming arrangements including a single point of contact, reduced program management, increased completion and opportunities for small businesses, increased innovation, and support of small business development.
A partnership is a business enterprise consisting of two or more individuals or concerns who come together to co-own a trade or business for profit. The partners share ownership of a single business. The partnership, and the members of the partnership, are in privity of contract with the government.
A joint venture is an association of two or more individuals or concerns formed to undertake a particular business transaction or project, rather than one intended to continue indefinitely. The members of the joint venture share in the profits and risk of loss. The joint venture entity, and its members, are in privity of contract with the government.
A subcontractor is any supplier, distributor, vendor, or firm that furnishes supplies or services to or for a prime contractor or another subcontractor.
Privity refers to the direct relationship between the parties to a contract. Thus, there is privity between the government and the business (prime contractor) with whom the government has directly awarded the contract. Because the teaming arrangements of partnerships or joint ventures results in a legal entity which can directly be awarded a contract there is privity. There is no privity between the government and a prime contractor’s supplier or subcontractor.
This post was written by Jeffrey W. Sneddon, Wyoming Entrepreneur Procurement Technical Assistance Center (PTAC) Procurement Specialist