This briefing covers active market intelligence, regulatory guidelines, and tactical capture recommendations for federal and defense contractors pursuing opportunities in this procurement classification.
Pursuant to Federal Acquisition Rule (“FAR”) 9.603, the U.S. Federal Government (the “Government”) will recognize the integrity and validity of contractor team arrangements. The Government uses the phrase “contractor team arrangement,” to describe two (2) types of procurement teams: (1) a joint venture or (2) a contractor team, which most people refer to as a “teaming agreement.” See FAR 9.601.
A joint venture is a business relationship entered into by two or more independent business entities to create a completely new partner relationship for a specific purpose or project. Each of the two or more business entities invests capital in the venture, provides management support for the venture, and participates in the profit or loss of the venture. See 13 CFR 121.103(h).
A contractor team, on the other hand, is a prime contractor/subcontractor relationship agreed upon prior to the submission of a bid proposal for the express purpose of working on a specific project as a group or team. The potential prime contractor agrees with one or more companies, who would serve as subcontractors, to cooperate to pursue, secure, and perform government contracts.
While both joint ventures and contractor teams offer businesses opportunities to bid and compete for government contracts that they otherwise might not have, the two teaming arrangements have some “big” differences.
There are five (5) major differences between a contractor team and a joint venture: (1) Formation; (2) Control; (3) Risk; (4) 3/2 Rule; and (5) Privity with the Government.
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