Teaming agreements and joint bids for small IT firms

Many public IT contracts ask for more than one small firm can offer: a broad range of skills, a large team, national coverage or years of experience in a niche. Teaming is how small firms compete for them.

The options

• Prime and subcontractors: one firm bids and signs the contract, and others deliver parts under it. The most common and simplest model. See subcontracting to prime contractors.
• Consortium: several firms bid together, often with one lead, sometimes each signing the contract.
• Joint venture: a new legal entity or contractual arrangement jointly owned by the partners. Used for large or long contracts, and in the US for certain set-aside programs.

Why team

• Fill a gap in experience, skills or certifications.
• Add capacity for a larger contract.
• Meet a security clearance or local presence requirement.
• Add social value, such as an Indigenous or local partner.
• Reduce risk on a contract that's big for any one firm.

Choosing a partner

• Complementary, not competing. Each partner brings something the other lacks.
• Proven. Check their references and public contract history.
• Compatible. Similar values, ways of working and quality standards.
• Committed. A partner who's half-interested will write half a bid.

What a teaming agreement should cover

A teaming agreement is signed before you bid. It should include:

• Roles: who leads, who does what, who signs the contract.
• Work share: what share of the work or value each partner gets if you win.
• Exclusivity: whether partners can join other bids for the same tender.
• Confidentiality: protecting each other's information during the bid.
• Bid costs: who pays for what.
• Decision-making: how you'll agree on price and the final bid.
• After the result: the subcontract to be signed if you win, and how the agreement ends if you lose.
• Non-solicitation: whether you can hire each other's staff.

Get legal advice for large or complex arrangements.

Making it work in the bid

• Present one team, with one voice and one style.
• Explain clearly who does what and how you'll manage the work together.
• Show you've worked together before, if you have.
• Name a single point of contact for the buyer.

Common questions

Can two small companies bid together on a government contract?

Yes. Most public buyers accept bids from consortia or from a prime with subcontractors, as long as the bid clearly sets out the roles and who's responsible.

What is the difference between a teaming agreement and a subcontract?

A teaming agreement sets out how you'll work together to bid. A subcontract sets out how you'll work together to deliver, once the contract is won.

Does the buyer score the whole team's experience?

Usually, yes, for the parts each partner will deliver. Check the tender's rules about relying on partners' experience.