01.01.2006 Teaming to Win Government Contracts
Editor Korroch, Robert E.Frequently, a business's best strategy to win a government contract involves forming a team. By partnering with other businesses, a bidder can enhance its capability to perform the government's requirements, improve its past performance record and take advantage of socio-economic programs that benefit particular businesses.
The general rule is that when evaluating offers, the government will recognize all of the capabilities of a bidding team. To take advantage of this opportunity, a bidder should include a description of its team in its bid. This description should show the government that the team is properly organized to deliver the resources necessary to get the job done. The bidder should include a copy of the written teaming arrangement with the bid.
Teaming arrangements usually take one of two forms. In a joint venture, the teaming businesses form a new entity that will bid as the prime contractor. Each of the participants pledges specific support to the joint venture. In the second type of teaming arrangement, referred to as a "teaming agreement," the participating businesses enter into an agreement to prepare a proposal together with the intention that, upon award of the contract, one team member will become the prime contractor and others will become subcontractors. The teaming agreement will include a statement of work that describes the duties that each member will perform after the government awards the contract to the prime.
Use of either form of teaming arrangement will enhance a bidder's capability to perform the contract. If, for example, the government's requirement includes the scheduling of government vehicles as well as maintenance and repair services, a bidder with maintenance capability might prefer to team with a company that can provide scheduling services rather than expand its own business to include scheduling capability. The choice requires a business analysis that includes asking whether a trustworthy teaming partner is available.
Through teaming arrangements, a bidder can improve its past performance. Past performance has become even more important than price in the government's evaluation of bids. A bidder can avoid a neutral rating in areas where it lacks past performance, or even improve its own negative past performance history, by teaming with a partner who brings positive past performance to the bid.
By teaming with businesses that qualify for special programs, businesses that do not qualify on their own can win work from the government. For example, a large majority-owned business could team with a small disadvantaged business with the intent of performing as a subcontractor for a contract that has been set aside for award to a small disadvantaged business. Typically, the government encourages this type of cooperation as long as it is not a ruse for circumventing government regulations.
Teaming arrangements raise numerous business and legal questions. Most importantly, business owners must assess whether forming a team will improve their chances of winning the contract. Also, teaming agreements must be crafted carefully to improve their enforceability as contracts—historically, Virginia courts have been reluctant to enforce them. And teaming arrangements must not involve collusive bidding or other anti-competitive practices.
Teaming is a very effective way for a bidder to improve its chances to win government contracts.
"Teaming to Win Government Contracts" as reprinted from the January-February 2006 issue of Oyster Pointer.