Teaming Agreements in Federal Contracting: A Practical Guide

Teaming is one of the most common strategies in federal contracting, particularly for complex, multi-disciplinary requirements where no single company has all the capabilities the government is seeking. A teaming agreement establishes the rights and obligations of each team member — who will be the prime, what work each party will perform, how revenue will be allocated, and what happens if the team wins or loses. Getting the details right from the start protects everyone on the team.

Teaming vs. Joint Ventures

A teaming agreement does not create a new legal entity — each party retains its own identity, CAGE code, and SAM.gov registration. This distinguishes it from a joint venture, which is a new entity with its own CAGE code. As described in our guide on CAGE codes for joint ventures, the choice between teaming and forming a JV has significant implications for small business size and set-aside eligibility.

Key Provisions Every Teaming Agreement Should Include

• Identity of each party: Legal name, CAGE code, UEI, SAM.gov registration expiration date
• Prime/sub designation: Which company will hold the prime contract
• Scope allocation: What specific work each subcontractor will perform (work share percentage and description)
• SAM.gov maintenance obligation: Each party must maintain active registration throughout proposal and performance periods
• Exclusivity clause: Whether team members are prohibited from teaming with competitors on the same procurement
• Non-solicitation clause: Protection against the prime attempting to hire sub personnel or directly approach sub customers
• Expiration: When the teaming agreement terminates if no award is made

Small Business Size in a Teaming Arrangement

In a teaming arrangement where the prime is a small business, the prime's size is measured independently — the subcontractors' sizes are not aggregated with the prime's for size determination. However, if the prime is performing less than 50% of the work (for non-construction contracts), the SBA's limitations on subcontracting rules may be violated, potentially resulting in disqualification.

Past Performance in Teaming

Teaming allows you to propose the past performance of each team member separately. This is particularly powerful when a small business prime teams with a large business subcontractor whose relevant past performance fills a gap. Verify each team member's contract history on FedAtlas.com by CAGE code before finalizing your past performance narrative.

What to Do When a Team Member's CAGE Code Is Inactive

If a team member's SAM.gov registration lapses between proposal submission and award, the contracting officer may reject that team member's inclusion in the proposal. Require all team members to provide a screenshot of their active SAM.gov status at the time of proposal submission, and use our CAGE Code Decoder for quick verification. Include a replacement clause in the teaming agreement allowing the prime to substitute subcontractors if a team member loses eligibility.