teaming agreements: ten things you can’t forget when drafting teaming agreements ·...
TRANSCRIPT
Teaming Agreements: Ten Things You Can’t Forget
When Drafting Teaming Agreements
Patrick Miller, Partner
No. 1 – Make Sure You Have One
►Risks of the “handshake” deal: ► No ability to enforce your understanding of the deal ► Loss of intellectual property ► Loss of confidential proposal data ► Won’t get paid ► Disputes with team members on scope and pricing after your team wins
the work
No. 2 – Define the Scope, Time and Value Proposition
►The Wallkill Case: 868 N.Y.S.2d 140 ► Design-build project for a medical office building in New York
►Owner and design-builder have a written agreement for design services
►Discussions and drafts of full design-build contract
► Design-builder terminated for default ►Failure to obtain bonds ►Owner claims rebid & delay costs
No. 2 – Define the Scope, Time and Value Proposition
►The Wallkill Case: 868 N.Y.S.2d 140
► Owner argued that parties agreed to all terms of an unwritten comprehensive contract
► Design-builder argued that parties never came to a complete agreement on essential terms
No. 2 – Define the Scope, Time and Value Proposition
►The Wallkill Case: 868 N.Y.S.2d 140
► Court dismisses case: ►Dates for completion & price not established in contract
►Parties “manifested intent not to be bound until the execution
of a formal written construction contract”
No. 2 – Define the Scope, Time and Value Proposition
►The ATACS case: 155 F.3d 659 ► Teaming agreement for design-build RFP for Greek army
“communication shelters.” Subconsultant contributed significantly to obtaining design-build contract.
► Team leader (which was the major equity stakeholder) went with another subconsultant after award (based on price)
► No written agreement; however, there was detailed correspondence setting out the terms of the subconsultant agreement
No. 2 – Define the Scope, Time and Value Proposition
►The ATACS case: 155 F.3d 659 ► Court finds enforceable teaming agreement but limited relief:
►Amounts spent in solicitation effort ►“The fair value of the subcontractor’s contribution to the prime
contractor’s agreement.” ►Lost profits were too speculative
No. 2 – Define the Scope, Time and Value Proposition
►DBIA Teaming Agreement uses an Exhibit regime:
► Exhibit A: Form of Subcontract or Subconsultant Agreement
► Exhibit B: Matrix of Responsibilities
► Exhibit C: Proposal Costs
No. 3 – Incorporate the “Other” Contracts
If the Design-Build Contract is awarded to the Team, the Parties will enter into the Subcontract Agreement or Subconsultant Agreement attached hereto as Exhibit A.
No. 4 – Deal with Intellectual Property
►Team Leaders: If you are using someone else’s intellectual property in your proposal, you may be prohibited from using it when you win the work and want to part ways
►Subcontractors: If you remain silent about your intellectual property, you may lose your right to compensation for your work or even the IP itself
►Legal issue: Implied license to use copyrighted information. See I.A.E. Incorporated v. Shaver (1997).
No. 5 – Deal with Termination
This Teaming Agreement will terminate: (a) upon the execution of the Subcontract Agreement or Subconsultant Agreement attached hereto as Exhibit A . . .
No. 5 – Deal with Termination
. . . (b) the Design-Build Contract being awarded to another team; (c) cancellation of the procurement by the Owner; or (d) one party giving seven days written notice to the other party.
No. 6 – Deal with Exclusivity
►Team Leaders: If your team members are not precluded from joining other teams, you should expect they will
►Subcontractors: Use being forced to stick with one team as negotiating leverage
►Everyone: Verify WBE/MBE/DBE requirements
No. 7 – Deal with Confidentiality
“Confidential Information is defined as information which is determined by the transmitting party to be of a confidential or proprietary nature and: (i) the transmitting party identifies as either confidential or proprietary; (ii) the transmitting party takes steps to maintain the confidential or proprietary nature of the information; and (iii) the document is not otherwise available in or considered to be in the public domain.” [DBIA Teaming Agreement, Section 8.1.1]
No. 7 – Deal with Licensing
“Each Party represents and warrants to the others that it is a corporation duly organized and authorized to do business in the State in which the Project is located, holding proper licenses (where required by law) to provide the services necessary to meet the requirements of the respective Party under the Proposal.” [DBIA Teaming Agreement, Section 14.2]
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No. 9 – Cover Everything Else
►Which parties are allowed to review and modify the proposal? How many times?
►How are costs and stipends being shared? ►Which employees are going to be on the pitch team? The project
team? ►Add commercial terms:
► Consequential damages ► Caps on liability ► Liquidated damages ► Assignment of the agreement ► Choice of Law ► Disputes
No. 10 – Choose the Right Team Members
►“All politics is local”
►Be aware of conflicts of interests ► Formal rules ► Informal protocols
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Questions?
Patrick Miller, Partner