Teaming Agreements – The New Norm in Government Contracting

Government Contracting A to Z

Government Contracting A to Z

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In this episode of Government Contracting A to Z, Kevin interviews Heather James of Whiteford, Taylor & Preston on teaming agreements in government contracting. This topic is especially important for growing and strengthening your public sector footprint. Listen to the podcast to learn how to establish, develop and implement successful teaming agreements so you can win more government business.
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0:04
Commercial

Broadcasting from the Winvale studio in Washington, D.C. Welcome to Government Contracting A to Z about letting the latest insights, trends and newsmakers in the world of federal state and local government contracting. For more on Winvale, visit W-I-N-V-A-L-E.com. Now, here is your host, Kevin Lancaster.

0:26
Kevin Lancaster

Hello and welcome! May name is Kevin Lancaster, managing partner of Winvale and the host of Government Contracting A to Z. Well, our goal is to provide you, the listener, the aspiring or seasoned government contractor with the latest insights, trends and the newsmakers in the world of government contracting. I want to thank you so much for taking time out of your busy schedule to listen to our podcast, it's our inaugural, our first episode so we're very excited to share today's program with you. We hope you find a lot of value with today's program along with the many, many more episodes to come. Before we get started, I would be remiss if I didn't encourage all of our listeners to head over to our sponsor site, Winvale and find out how we can help you accelerate your government sales marketing and contracting opportunities including the development of your GSA schedule contract. The site is www.W-I-N-V-A-L-E.com. Okay, so enough for the plugs. Today's episode, episode one is specially important for all of our business development sales and contract administrators, listeners out there who are looking to expand your government book print and I know a lot of organizations want to grow their book print through teaming and so today's program is specially for you. We have a couple cover a wide variety of topics on teaming agreements including why they are consider the new norm these days. How companies can increase their public sector of business through agreements, teaming agreements. Well contract rights and obligations come with entering into an agreement and the ways to protect yourself in an agreement to make sure you have a winning partnership. I'm very honored and proud to have our expert today on our first podcast. Her name is Heather James of Whiteford Taylor Preston. She would be joining me here surely. I have known Heather for, gosh, probably the close the last four or five years now and I'm delighted to have her participate. So I'm going to leave a little bit about her bio and we'll bring her on.

2:26
Kevin Lancaster

She has got quite a distinguished bio here. Heather James is counsel at Whiteford Taylor Preston and the head of the firms Government Contracts in BRAC practice groups and for those who don't know what BRAC stands for that's Base Realignment and Closure practice groups. In her practice, Ms. James has represented clients in a wide range of procurement issues in numerous forms. Ms. James also provides a full range of government contracted by representation to companies and a variety of industries. She counseled clients on proposal submissions and certifications 8(a) and other social economic disadvantage business issues, contract formation, administration, termination issues, data rate, intellectual property matters, organizational conflicts of interest and GSA schedule issues. I told you, she has got a number of these things under her belt, so we're glad to have her. Prior to entering private practice, Ms. James was actually a senior compliance officer with the Department of Labor of Federal Contract Compliance Programs. So, with that I'm going to bring on Heather, welcome Heather.

3:34
Heather James

Thanks, Kevin.

3:35
Kevin Lancaster

Yeah, thanks for joining us so you are the head of the Government Contracts in BRAC practice group at the firm of Whiteford Taylor Preston. Maybe in your own words, kind of give an overview of the firm and what you do, what your areas of expertise are and we went to a laundry list of all the things that you've done, but tells us a little bit about yourself.

3:57
Heather James

Okay. Whiteford Taylor Preston is a medium-sized law firm in the mid Atlantic region. They're based at the Baltimore. I think in last camp, they have about 170 attorneys and maybe six or seven different offices. I think we just opened up a new office in Michigan. I operate out of primarily -- out of the D.C. office, which is where the government contracts practice is based and I've been there since 2006. As you said, we have sort of a pretty broad spectrum government contracts practice. We probably have some sweet spots in the defense contracting industry intelligence, GSA and technology services based contracting companies. Although we have -- we basically represent Pennsylvania manufacturers to construction contractors to everything in between. That's sort of the overview, I have a very general practice as well so I think you stick off a lot of the things that I do for our clients. They're primarily in the areas of contract negotiation information, litigation one that arises, regulatory advice and counsel, interacting of technology licensing and these types of agreements and security clearance stuff and basically everything else related to government contract so...

5:16
Kevin Lancaster

All of the fun stuff that...

5:19
Heather James

All of the fun stuff.

5:20
Kevin Lancaster

Yeah, government contracting that's great. Now, so...

5:24
Heather James

Most people don't think it's that fun, but...

5:26
Kevin Lancaster

Well, I do. I guess most people here, attorneys and contraction, they cringe, but that's to say just you know in working with you guys and -- just be back we've gotten from other partners and clients, I think you guys do a terrific job so kudos to you on that, so let's give right into it. This is one of the blow of the ocean kind of topic that they go with government contracting, but -- we are seeing -- a lot of emphasis on teaming, subcontracting so if you could just kind of give us that 101 teaming agreements and then how they use and why are they becoming the new norm here in government contracting.

6:11
Heather James

Well, I think maybe it would best to address the second part of your question first and talk about why is there at this trend towards a lot of teaming agreements in government contracting, why are they becoming sort of a common standard of business and the reason for that is in the last, I don't know maybe a decade or more, the federal government has trended towards bundling large requirements supply of services in the single contract opportunities rather than competing little contracts having to do with the specific requirement. They like to bundle the map into these large contracts and they have a lot of different desperate requirements and components to them and as a result of that when the government issues a solicitation procuring a large bundle of requirement, most companies who are small and medium sized may not have the capacity or the capabilities to cover all the requirements in a single bundle contract. They have to go out and they have to look for teaming partners that have competences that compliment the contractors and cover all the bases if you will. So that's one trend and one effect of the bundle of requirements leads to a lot of teaming. The government has recognized that this is something that's going to be common and in government contracting and so they encourage companies to enter into responsible and well thought out teaming arrangements to pursue this large bundle of requirements. Another thing, another reason why teaming is common in prevalence is large contractors, you might otherwise be able to meet all the requirements in single bundle of requirements are now being pressured more and more to comply with what they call the small disadvantage business subcontracting goals in their primary contracts.

8:13
Heather James

And those require a certain percentage of the dollars that you paid in a prime contract to be subcontracted out to small and small disadvantage businesses and so prime contractors around will look out for small and disadvantage contractors who can meet those, help them meet those requirements and also they are looking for each competences that they might not have so these are two of the, probably the biggest reasons why there is a lot of teaming and as a result of that, you see a lot of teaming agreements. I certainly see a lot of teaming agreements in my practice and so it's worthwhile talking about for a minute what teaming agreement is and maybe what it is and -- what teaming agreement is, it's an agreement between a couple of contractors or more than two to work together to pursue and capture a federal contracting opportunity. It's not necessarily anything more than that meaning that if you're a team member, that's part of a teaming agreement you don't necessarily have a guaranteed contract in the event that your team wins -- your team leader wins the primary award. It can be not, but it depends upon what the teaming agreement actually says and so sometimes it's just an agreement to agree with subcontract in the future, sometimes it has a little bit more teeth to it, but basically the purpose of it is to get two more companies to agree to pursue and pull their resources to capture a contracting opportunity.

9:38
Kevin Lancaster

So what are they look like the mechanics behind on effective teaming agreement? You mentioned -- this is not necessarily I mean if you're entering to a teaming agreement, there may not be dollars or a contract action -- even that's the team when are the piece of business so what are some of the mechanics behind -- on effective teaming agreement.

10:01
Heather James

There is a couple of different categories of teaming arrangements and I will talk about the one that's probably the most used and most common first and that is teaming arrangement that follows sort of a traditional prime contractor and subcontractor arrangement. What happens in these types of cases is the team leader essentially, the contractor he wants to put together the team or identify specific contract requirement that they want to pursue and now that though I look for teaming partners companies that have complementary core competences or can fit in that shore have some other -- something else that they can bring to the table but that makes them a valuable team member and then those -- the team leader and the teaming members will negotiate a prime of the division of the work. Sometimes that's put in to the teaming arrangement and sometimes that's left pretty flexible depending on the circumstances. Parties will sign the teaming agreement and then they will go full board and prepared and submit the proposal. There is a lot of work involved in that and the team members are obligated to support the team leader in putting together a competent and competitive proposal to submit to the government. In the event that the team or the team leader is successful and with the contract award then hopefully from the team members' perspective, negotiation will start in earnest between the team leader and team members to enter into a subcontract that basically sets the scope of work in the terms and conditions under which that scope of work is going to be performed. So -- which is typically see in a teaming agreement often times are terms and provisions that allocate who is responsible for what in proposal development and completion -- what is the team member obligated to do to support the team leader in that bid and proposal process. Are they going to be part of -- for example oral presentations if those occur?

12:01
Heather James

Will they have the opportunity to directly interact with the government customer. Will they have the opportunity to review the proposal before it submit it or they did not have that opportunity meaning that the team leader can change the terms and conditions that the offer part that the team member has proposed. Those are things that are usually covered in the pretty standard teaming agreement so let's go for the anticipated work after contract award is usually addressed. It could be very general. It could be very specific. The more specific the terms of the anticipated work are in the teaming arrangement the more likely a team member would be able to enforce that if there is a contract award as a result of the proposal. If it's very vague in general and it's just says that the parties will endeavor negotiating good phase to enter into an teaming arrangement, I mean a subcontract for a scope of work that they will discuss later then you know right out of the box that you really don't have any ability to enforce the teaming agreement if there is a contract award and the team leaders are not going to award the subcontract to you, but thanks for you help. You probably don't have any recourse against them unless you can show that they have just absolutely acted in bad phase which is kind of a high standard to meet.

13:20
Kevin Lancaster

Well, let's go kind of get into -- who is in charge and -- once you win it -- what are your rights and obviously if you win a piece of business and you enter in a subcontract agreement, you've got obligations, but -- even getting to there -- what rights do you have even if you've entered into a teaming agreement so you kind of touch on that like can I get and give me the primes in charge, you know.

13:43
Heather James

Well, definitely, in a prime set model I mean we'll probably not going to talk too much about joint venture arrangements because that's a completely different animal so -- just saying with the more traditional joint of prime sub teaming arrangement -- the team leader is in charge because the team leader is the one that's probably going to get the contract award. They're going to be the prime contractor. They're going to have the direct contract relationship with the government and -- a team member in the event that they execute a subcontract with the team leader -- they're going to have a supporting role for sure. Because the team leader/prime contractor is in charge, they sort of -- and they're probably the ones that are sliding the teaming agreement document across the table to the team member and they have some leverage on their side. They may or may not be asking the team member to agree to exclusivity in that arrangement meaning that the team member cannot participate on other competing teams. Team leaders probably going to set the terms as to how the teaming arrangement -- how long it can last meaning the term of it, how it can be terminated and what if any recourse the team member might have against the team leader.

15:00
Heather James

So when you say who's in charge it's definitely the team leader. I will say that also that means that the team leader is responsible for performance of the contract, so if there's any prime contract and the government is not happy, governments probably is not going to sue you a team member/sub-contractor, they're going to go after the prime contractor. So there is that to consider as well. You know, if you are a team member you definitely need to make sure you understand what this is a pretty important area. What's your obligation are with respect to the team leader and also what's your obligations and rights are with respect to the government customer, both are equally important.

15:43
Kevin Lancaster

Sure. Sure. So I get to kind of get into if you are entertaining the idea of entering into a 10 year agreement, know who you're marrying in a sense. And if you could kind of take me down that path, what are some of the common issues to watch out for? How to make sure you're entering a winning or a partnership that after these business that as a result of proposal submission that it's going to be a when, when.

16:18
Heather James

Yeah. I mean it's a great question. And there is a handful of things. I mean there is a lots of issues that you need to look for, but if you ask me to pull out the biggest ones. One of the biggest is you know to really understand what the prime is -- I touched on this a little bit before in the team leader/prime contractors obligation is to award your subcontract if they win a contract award. Because one of the things that I see most often is team members will call and say I am very disappointed. I didn't get a subcontract. I spent all this money in these resources on putting together for the proposal and that's something that's sort of it's kind of a cost of doing business, but you shouldn't be surprised about it. So you know, nothing is absolutely certain in government contract. Often times teaming arrangements and the proposals that they submit, they are not successful but because there is a lot of competition. But you know understanding what you're looking at is far is do I actually have illegitimate expectation of receiving a portion of the work in the event of an award. It's pretty important thing to understand both from understanding what your business pipeline is and understanding if I'm spending this money, if I'm likely to get it back in the event of an award or not. One of the other things is that I mentioned exclusivity provisions often times, primes want to keep their options open and will not commit to only being on your team as a team member. The most I am talking about from the team member's perspective, but you know as a general rule primes are always going to want maximum amount of flexibility and team member subs are always going to want much more specificity and commitment from the prime as a general matter in a teaming arrangement. It's not unusual for team members to have to agree to exclusivity meaning they won't participate on any other teams. And that's something that you should probably expect and unless you have a strong negotiating position which usually means you have a niche specialty that is not you know is not commonly found elsewhere.

18:25
Heather James

A lot of negotiating leverage. It's probably something that the prime is going to insist that you agree to work shares or things that you probably are to look for. If there is a work share meaning that if it's an indefinite type contract that you're pursuing, is the prime willing to give you a certain percentage of the work and guarantee that you're going to get that. That's always something that a team member should pursue. Sometimes you are successful in getting a prime to agree to that and sometimes you are not, but it's something that you should try to get them to agree to because it really -- it solidifies your expectation that you're going to get some work out of it. And then understand that usually teaming agreements will set the cost of proposal preparation on each of the parties meaning that you're going to be responsible for your own proposal cost and that's something that you should expect and plan for. Other than those types of things, other provisions that are important or things like you're want to consider making sure that they are confidentiality and nondisclosure provisions in a teaming agreement to protect your confidential data as well as the primes and provisions that would prevent both parties from stealing each and poaching each other's employees which unfortunately can happen quite often.

19:41
Kevin Lancaster

Wow! Yeah, I mean it sounds like there is a myriad of just things to watch out for and I guess you hear that the term teaming agreements and you don't necessarily think about these other terms exclusivity or I'm sure confidentiality is one of them most people think about but even something on the back-end poaching an employee to pull them on to your contract or another team members contract, I guess those are things that most organizations that are new in the teaming agreements wouldn't have -- wouldn't think to try to negotiate or lay out into a teaming agreement.

20:20
Heather James

That's true.

20:22
Kevin Lancaster

Yeah. Yeah. Wow! So for our audience so we'll have some seasoned government contractors tuning in, we'll have a lot of new government contractors, emerging government contractors tuning in. Now, what is that one piece of advice, "if the attorney can give a piece of advice" or what's something that you can kind of throw out there or somebody that's new to teaming that's contemplating a new partnership or entering to a teaming agreement. What is the one thing that they should pause and stop and think about first?

20:58
Heather James

One thing. One thing. Well, I am having this __21:01__. No obviously, it's a sort of a preliminary -- as a sort of a threshold matter. You've got to read the teaming agreement and understand what it says and doesn't say. And if you're unclear about what the rights and responsibilities are you need to have it set by a lawyer, which is sort of a self-serving piece of advice, but it's very important though.

21:20
Kevin Lancaster

Absolutely.

21:21
Heather James

So you know, I think one of the most important things that I can give a client is sort of a mix of legal and business advice and that is understand what your bargaining strength is with respect to the teaming agreement. If you have a very fungible service or product that you're bringing to the table and you're easily replaceable, you should probably know that and not expect that you're going to basically say, "I'm not going to agree to the provisions that you have put forward. I'm going to walk." Because depending upon the strength of your bargaining position a tam leader might just say, "Okay, well, I can find another one of you tomorrow." If you have specialize skill and you know the value of that it's probably worth your while to hold firm and make sure that you get what you need out of this teaming agreement, i.e. guarantees of future contract, a more favorable provisions than that are maybe initially being offered to make sure that you're basically not just being raked over the calls by a heavy handed teaming partner. And with that you should definitely understand and know a little bit about who you're teaming with. I said earlier that it's sort of like a marriage. And unfortunately I've seen plenty of teaming arrangement marriages and a nasty divorce. So to avoid that you need to know who you're teaming with, understand who you're partnering with, their reputation in the industry, how they treat other teaming partners and basically understand what your role is in the overall teaming arrangement and basically push as hard as you can to preserve you in a maximum amount of benefits that you can get out of this if that is the arrangement.

23:09
Kevin Lancaster

Heather, I got smoke coming out of my ears.

23:12
Heather James

Sorry.

23:13
Kevin Lancaster

No. You know look, this is great information. Because again, I can take the number of organizations that we work with and you know on the front-end of a lot of organizations the front-end of their entry into the government marketplace is getting on to a GSA schedule and then on the back-end it's selling and procurement and quite often it's teaming because you know a lot of them have the latest and greatest whiz-bang product and they have the greatest services. But to your point I think that the onset of the show, there seems to be this trend towards bundling contract and making procurement easier for agencies by acquiring products and services combined under a single contractor going. And so there is so many different things to think about it in prior to entering into you know these teaming agreements and providing this type of front-end education is certainly what this podcast is all about, that is just absolutely great advice. I'm just kind of a fundamentals of entering into a marketplaces. This should be one of the fundamentals. There should be actually courses that are out there to offer to organization prior to even and getting into the marketplace because the complexity is on the back-end are just sometimes overwhelming. So you have provided certainly a tonic great, a high level overview information and I want to thank you so much for just hopping on and sharing a couple of minutes here. Your knowledge, your wealth of knowledge around the obviously the subject of teaming and what have use there. Any kind of parting thought that you have? Any other things come to mind that we should be thinking about or is it that enough for our listeners to chew on for now?

25:07
Heather James

Yeah, one other thing is that it's not sort of a summary point but it is one thing that I wanted to sort of mention is. One additional thing that team members should insist upon is to make sure before that proposal is submitted that you have the opportunity to look and make sure that the team leader has not changed in some material of aspect, your cost or price submission were the nature of the work that you've proposed so that you don't end up in a situation where the government agrees to a proposal that looks nothing like what you originally proposed to the team leader. That was sort of a late thought that I had, but I think if there is repeating that you may not be allowed to see the entirety of the proposal but certainly you should have control over what you have submitted. And to summarize that point and the others, teaming arrangements they can provide a lot of opportunity but you really have to protect your interest and that's sort of the focus of this podcast today and usually that's the focus of my advice to my clients is that protect your interest, make the most of teaming arrangements and try to avoid the pitfalls because they're unfortunately can be many.

26:25
Kevin Lancaster

Oh yes. You're absolutely right. Well, on that note I want to thank you again for taking time out of your busy, busy, hectic schedule and hanging out with us here for a couple of minutes. We're going to have some links to your bio on the Whiteford Taylor Preston website and we'll include some of these notes here in our show notes on our website. And I think Heather was even kind enough to draft a kind of a basic power point or PDF version of high level thought on teaming that will certainly put up on the show page. So with that I want to thank you Heather for hopping on and I'm sure we'll see you here at one of these wonderful government contracting events or Chesapeake Regional Technology Council event here in the near future.

27:16
Heather James

Sure, my pleasure.

27:17
Kevin Lancaster

Alright. Great. Well, thanks Heather. I appreciate it.

27:20
Heather James

Thanks.

27:22
Kevin Lancaster

Well, to the listeners. Be sure to get a full recap of Heather's interview and learn more about her by checking out our show notes on our website governmentcontract.com. Under the Government Contracting A-Z page, we'll have show notes and a link to Heather's bio on her firms website on that page. We would love to have you join us again for the next episode when we will be discussing SEO-ing Your Website for Government Lead Generation with Chris Mechanic of WebMechanix. So that about wrap things up for the day. Once again, I would like to thank our guest, Heather James and I want to thank you for tuning in and helping to make this podcast possible. If you like what you've heard please hop on over to iTunes and leave us some positive feedback on the show. And as always you can follow me on Twitter @followlancaster and you can also follow Winvale on Twitter @winvale. If you like you can send in questions via email at info@governmentcontract.com. We will make sure we get to them and include them in our show notes and in feature podcast. This will help us to keep providing you the listener with great content going forward. So until next time, we wish you the best and hope your government contract initiatives are thriving.

28:34
Commercial

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