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New Trends in Teaming Agreements. Breakout Session # 703 James R. Vickers, Sr. Manager, Contracts Veronica Garcia, Sr. Supplier Manager Raytheon Missile Systems 21 July 2010 10:00am – 11:15am. 1. Agenda. Purpose of the study Definition of Teaming Agreements Uses of Teaming Agreements

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New Trends in Teaming Agreements

Breakout Session # 703

James R. Vickers, Sr. Manager, Contracts

Veronica Garcia, Sr. Supplier Manager

Raytheon Missile Systems

21 July 2010

10:00am – 11:15am


Agenda l.jpg

Purpose of the study

Definition of Teaming Agreements

Uses of Teaming Agreements

Types of Teaming Agreements

Basic, expanded and unique Teaming Agreement content

Methodology of study


Trends over time

Conclusions and Recommendations

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Purpose of the Study

Identify trends

See what has changed over time

Capture unique terms

Look for improvement areas

Provide recommendations

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Definition – FAR 9.601

“Contractor team arrangement” means an arrangement in which:

Two or more companies form a partnership or joint venture to act as a potential prime contractor; or

A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified Government contract or acquisition program

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Uses of Teaming Agreements

Better compete; strengthen weaknesses

Share results

Complement each Party’s unique capabilities

Offer the best combination of performance, cost, and delivery

Ensure source of critical parts or know-how

NOT to take someone off the street

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Types of Teaming Agreements




Collaborative Research

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Basic Teaming Agreement Content




Proposal Activities

Award of Contract

Customer Interface


Publicity and News Releases

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Basic Teaming Agreement Content (Continued)

Proprietary Information

Intellectual Property (IP)







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Basic Teaming Agreement Content (Continued)

Limitation of Liability

Classified Information

Governing Law



Entire Agreement


Exhibit A

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Typical Expansions of Teaming Agreement Content

Foreign Corrupt Practices Act (FCPA)

Non-solicitation of employees

Specific exclusivity language

Joint investment

Specific Limitation of Liability

Steering Committee

Best pricing


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Very Unique Terms

Prime/Sub role reversal

Executive Committee in addition to Steering Committee

Allocation of jointly developed IP (other than 50/50 split)

Specifics on how to calculate best price

Right of first refusal

Sub-tier Subcontracting approval

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Methodology of Study

Scores of Samples Analyzed

Various Raytheon Business Units

Period of 1999 – 2010

Large and Small Businesses

Defense and Commercial entities

Domestic and International

Single and Multiple Pursuits

RFP and Collaborative Research/IRAD

Joint Ventures/Ownership Agreements excluded

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Data Compared

Size of Company

Year of Effectivity

Parties, (number)

Defense or Commercial

Domestic or International


Single or Multiple Pursuits


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Data Compared (Continued)

For RFP or Collaborative Research


Choice of Law

Arbitration Agency



Limitation of Liability

Steering Committee

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Data Compared (Continued)

Non-solicitation of Employees

PIA protection


Workshare Defined

Data Rights

Best Pricing Terms

Prime/Sub Role Reversal


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Data Compared (Continued)


Sub-tier Subcontracting Approvals

Approval of Use of Agents

Language (International)

Level of Signatures

Recitals (number)

Termination (number)

Unique Terms Identified

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Findings - General

Large: 85%


Defense: 78%

Commercial: 22%

New: 33%

Domestic: 59%

International: 41%

2 Party: 93%

3+ Parties: 7%

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Findings – General (Continued)

Single Pursuit: 54%

Multiple Pursuits: 46%

Types of Pursuits:

US Govt. Prime: 66%

Intl. Govt. Prime: 10%

Collaborative/New Markets: 24%

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Findings - Terms

Exclusivity: 80%

Subcontracting Approval: 17%

Non-solicitation of Employees: 12%

Investments Specified: 22%

Offset: 24%

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Findings by Business Size

49% of Large businesses took part in Single pursuits (vs. multiple) compared to 67% of Small businesses

100% of Small businesses took part in exclusive agreements compared to only 77% of Large businesses

None of the Small businesses sampled included a Non-Solicitation of Employees term

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Findings by Domestic/Intl.

59% of International agreements were for multiple pursuits compared to 42% of Domestic agreements

17% of Domestic agreements included the Non-Solicitation of Employees term compared to 6% of International agreements

76% of International agreements included an FCPA term compared to 13% of Domestic agreements

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Term (in Years) over Time

Avg. Term over Time

Trend is toward shorter term

Large and Small businesses have been getting better about including a term limit

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Avg. No. of Recitals

Recitals by Business Size

Recitals by Domestic/Int’l.

Over time

  • Assumed Large businesses would have more recitals due to Antitrust concerns

  • Small businesses have just as many recitals

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Use of FCPA terms over Time

% use of FCPA in International Agreements

  • 13 % of Domestic Agreements include FCPA term even if not an International agreement

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Use of Termination Terms Over Time

  • Avg. No. of Termination Terms Over Time

  • More focus on how to end agreements

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Dispute Resolution

% Use of Different Arbitration Agencies

Agreements between Domestic parties are more comfortable with U.S. courts

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Trends over Time (1999-2010)

Teaming Agreements are becoming more common

More Small businesses are parties to Teaming Agreements

Average Term of Agreements has decreased

Termination clauses are becoming more important to parties

Increased use of unique terms

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Conclusions from Evaluations

Most Common Form of Dispute Resolution is via use of AAA, even on International agreements

Many terms (ex: IP, Arbitration) addressed in Teaming Agreements become moot when superseded by PO

How much time is spent on these?

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Since most agreements are between two Parties for a Single Pursuit, standardizing these types of agreements (within company and industry) would save time

Optimize re-use of standard terms

Better address follow-on pricing

Better define Workshare split

75%,25% Workshare = 2/3, 1/3 $ split

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Contact Information

Jim Vickers:

Veronica Garcia: