Teaming Agreement: The What, Why and Where

What is a Teaming Agreement?

As the name suggests, it is used when you "team-up" with another party to fill in the gaps in your skills and resources. Lately, teaming agreement has been much more preferred over a traditional joint-venture. Unsurprising since teaming allows parties to work together with limited obligations and commitment.

Two Business in Discussion

To make sure your business relationships and interests stay safe, our friendly team of commercial law experts can help you whip up a teaming agreement that fits like a glove, without all the confusing legal jargon.

Two companies will team up to tackle a tender bid or a service job together. This agreement spells out that if the bid is a success, one company takes the lead as the main contractor while the others come in as subcontractors.

Why choose to enter into Teaming Agreement?

The Perks: By teaming with the right partner, you can combine your strengths and resources to give that tender your best shot.

• Not tied down like in a joint venture or partnership.

• Sharing of financial risks and the rewards.

• Opportunity to explore new markets and bid for bigger projects than you could handle solo.

• With your powers combined, your tender proposals are supercharged.

• Plus, teaming up might even push out some of your competition.

The Compromise: But, there are a few things to watch out for too when you decide to team up.

• Sharing the tender process and rewards with your partner (a necessary evil).

• Losing some control over the bid process as you're working with someone else.

• Reliant on your teammate and having to relinquish position as main contractor.

• Having disagreements on commercial decisions.

Teaming agreements are great because they're not forever. They're more like short-term partnerships that dissolve once the tender's done. The agreements usually lay out your goals and who's doing what, without getting too deep into the nitty-gritty of how things will work after you win.

The teaming agreement should include just the basics, like:

• Who's the main contractor and who's the subcontractor.

• A promise of complete confidentiality.

• A commitment to work together exclusively during the tender process.

• Making sure everyone's clear on who owns what with an intellectual property clause.

• A few key terms about what the subcontract will look like if you win.

Where do you start?

Teaming up, not joining at the hip. They're more like casual collaborations that let you dip your toe in without diving in headfirst. So, if you're thinking about teaming up for a tender, this could be just the ticket. How do you get started? Simple:

• Find a tender that looks like a good fit for you.

• Team up with someone who brings what you're missing.

• Get a legal whiz (that is us) to draw up your agreement.

• If you win the bid, get the proper contracts in place to keep things running smooth.

With these steps, you'll be all set to tackle those tenders like a pro, with a trusty partner by your side.