Teaming Agreement Language

The Cyberlock court ruled that the teaming agreement was an unenforceable “approval agreement” under Virginia law. When examining the terms of the agreement, the Tribunal found that, although there is some language that indicates that information experts were required to provide 49% of the main contract to Cyberlock. . . . the agreement as a whole shows that this particular language has not certified a binding obligation. Instead, the court found that the team agreement “established a contractual purpose and an agreed framework for negotiating [a subcontract in the future under certain defined conditions,” which Virginia law considers a mere agreement. The General Court based its conclusion on four factors: an example of a team agreement containing these essential concepts can be found in CE&G. The agreement in this specific case stated: “If the contract is awarded to [Cube], CE&G will perform certain functional areas as subcontractors. .

. . with the functions to be defined when the [Request For Proposal (RFP)] is released”.` Following the publication of the RFP, the team members divided the “labour declarations (SOWs)] according to the skills and competences of each company”, and the parties explained their division of labour in the proposal. With respect to compensation, the team agreement provided for a cost-type contract and the two team members submitted separate cost proposals to the government that estimated the cost of their portions of the work. As for the duration, the team agreement stipulates that the subcontracting would have the same duration as any main contract. Although the parties` subcontract negotiations failed due to the subcontractor`s willingness to accept an indirect rate cap and a termination clause, the Tribunal found that the Former had proposed these terms in bad faith and that the differences of opinion between the parties on these points did not slash their indemnification and duration agreement. It remains to be seen whether the Analysis of Intent and Specific Terms by the Virginia Cyberlock Court will become the applicable law with respect to written team agreements….