Exclusive Teaming Agreement Language

Team agreements are generally correct. See sub-part 9.6. As has been pointed out outside of the courts, the contractual clause does not apply to team agreements prior to the award of agreements. However, there are considerations for cartels and abuse of dominance that make legal advice essential when a company is considering a team agreement. The Virginia Supreme Court considered the applicability of team agreements in W.J. Schafer Associates, Inc. v. Cordant, Inc., Va. Record No. 961945, (Va S. Ct.

1997). Cordant, who was either out of contract or re-procured the goods provided by the subcontractor at a much higher price under the team agreement, sued his team member for breach of contract when he could not reach an agreement on a definitive subcontract when the main contract was awarded. The team agreement stipulated that the parties would “negotiate a sub-contract in good faith on time.” The Virginia Supreme Court ruled that Cordant was not entitled to a violation when the parties did not accept a final sub-contract and stated: “… there must be mutual agreement between the contracting parties on conditions which, in the present circumstances, are reasonably safe to have an enforceable contract. There has not been such a mutual commitment. No amount was indicated in the agreement and no method or formula was used to determine the amount to be paid. A court should not set the terms of the transaction on which the parties could finally agree. Since the agreement does not provide a reasonable basis for the provision of a remedy for its violation, it is too vague and unlimited to be enforced. The Gansler memo is the pioneering paper on doD`s anti-competitive organization policy. It defines an “exclusive team agreement” as existing when “[1] two or more companies agree – in writing, through “understandings” or other means, to follow a DoD purchase program together, and [2] agree not to partner with other competitors for this program.” The memo states that exclusive team agreements have the “potential” to reduce competition.

Gansler`s memorandum advises DoD contract agents and program managers to “check” exclusive team agreements to determine if they are anti-competitive. If so, the memo highlights the options to be followed, including: Well point, and I had considered this, but in many cases, the proposed principal contractor has already entered into other contracts, often with the same proposed subcontractor, which offers the same type of products/services from delivery contracts. This “FAR” clause would therefore be in effect under these other treaties. Wouldn`t that prevent the primacy of reaching a team agreement with the subcommittee on a new PSR for similar work? It does not make sense that cooperation is so limited, because, as Vern pointed out, it is recognized as acceptable under subsection 9.6 of the FAR, but the language of this clause amazes me. Is there simply a plan to prohibit contractors from preventing subcontractors from engaging as primary contractors on the competition of this particular contract? Or are team agreements an exception to 52.203-6 (b)? There seems to be a general consensus that it is okay, but my OCD lets me know why it is correct.

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