Janice Davis | Putting Together Small Business Teams

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Janice Davis | Putting Together Small Business Teams

  1. 1. 1Essential Documents forEffective TeamingDavis & SteeleNCRC Annual ConferencePutting Together Small BusinessTeams to Compete for Larger ContractsApril 18, 2012
  2. 2. 2Presenter• Janice Davis, Esq.• Chair of Davis & Steele’s Government Contracts Practice Group• 20+ years of government contracts law experience• Work extensively with businesses selling to governments—federal, state, and local © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  3. 3. 3Prepare Before You Share! © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  4. 4. 4Prior to engaging in preliminary discussions regarding the jointpursuit of potential opportunitiesRequire marketing/business development staff to have executedmutual non-disclosure agreements in placeDo not share proprietary data without an NDA! © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  5. 5. 5An NDA is a binding agreement that defines proprietary dataand establishes limits on the use of such data by the partiesgenerally.An NDA prohibits the disclosure of proprietary data to thirdparties, with narrowly defined exceptions. © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  6. 6. 6 Why is a Non-Disclosure Agreement Necessary?• Share data without fear of losing trade secret protections or having proprietary information disclosed publicly• Uncovers unscrupulous businesses (e.g., those who insist on disclosure of proprietary data before signing an NDA)• Fosters the relationship• Facilitates planning © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  7. 7. 7 Essential Terms of a Non-Disclosure Agreement• Agreement between the parties to maintain confidentiality of information and not disclose each other’s proprietary information• Relatively broad definition of proprietary information – specifically reference any information of unique value• Strict limits on the use of information/permissible use should be very narrow• Agreement on how the information is to be disposed of upon termination of the agreement• Requirement that employees of recipient have also signed NDA covering the proprietary information © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  8. 8. 8 Essential Terms of a Non-Disclosure Agreement• Term/duration – long enough to enable the parties to explore teaming possibilities, PLUS additional time period to protect your interests• Provision detailing what is exempt/not included in the definition of proprietary data: ▫ Public domain ▫ Already known ▫ Independently developed ▫ Legitimately obtained from another source• Use common sense: Don’t disclose more than you need to! © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  9. 9. 9 Teaming Arrangements• FAR 9.601 Defines a “Team Arrangement” as 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 companies to have them act as its subcontractors under a specified government contract or acquisition program ▫ Includes subcontracting, partnerships, JVs © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  10. 10. 10Teaming Agreements: Purpose1. To designate a team leader who will act as the prime contractor for a particular contract;2. To identify the products or services that each party will provide, being as specific as possible;3. To assign duties and responsibilities for preparing the proposal (and to assign responsibility for costs of preparing the proposal); and4. To impose a duty on the parties to negotiate in good faith toward the execution of a subcontract if the proposal is successful. © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  11. 11. 11 Teaming Agreements: Enforceable?• Enforceable When Carefully Drafted• Teaming agreements may or may not be legally binding commitments• If forward looking and general, not likely to be a binding commitment• If detailed with essential provisions, may be a binding commitment © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  12. 12. 12 Teaming Agreements: Enforceable?• W.J. Schaefer Associates, v. Cordant, Inc., 254 Va. 514, 493 S.E.2d 512 (Va. 1997) ▫ Nonspecific agreement that left too many key provisions for later negotiations was merely an “agreement to agree” and was, therefore, unenforceable ▫ Too many terms “to be determined,” including  Price  Subject matter  Delivery schedule © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  13. 13. 13 Teaming Agreements: Enforceable?• EG&G Technical Services v. Cube Corp., 63 Va. Cir. 634 (Va. Cir. 2002) ▫ Teaming agreement was sufficiently specific and addressed the essential terms ▫ Intent to bind the parties for contract formation in Virginia:  Scope of work to be performed  Compensation to be paid  Terms and conditions to be incorporated in resulting contract © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  14. 14. 14 Teaming Agreements: Enforceable?• ATACS v. Trans World Communications. (155 F.3d 659 (3rd Cir. 1998) ▫ Third Circuit Court of Appeals Held: teaming agreement enforceable ▫ Intent to be bound ▫ Consideration ▫ Definite terms © 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com
  15. 15. 15 Teaming Agreements: Enforceable?• Factors favoring the creation of a binding and enforceable agreement:• Intent to be bound: ▫ Statements that one party will be awarded a subcontract if the other party wins the prime contract ▫ Specific statement that the parties will work together as a team on the project• Consideration ▫ Specific price provisions covering the work to be performed by the subcontractor• Definite terms ▫ Specific scope of work under the prime contract ▫ Specific terms and conditions to be incorporated into the expected prime contract © 2012 Davis & Steele: Uncompromising Service Unparalleled Value www.davissteele.com
  16. 16. 16 Teaming Agreements: Enforceable?• Factors against the creation of a binding and enforceable agreement:• No intent to be bound: ▫ Statement that the team members plan to enter into good faith negotiations toward a final subcontract ▫ No statement that the team member will be awarded a subcontract if the other team member wins the prime contract• Consideration ▫ General statement that team members will seek to agree on compensation• Terms and Conditions ▫ General description of scope of work under the prime contract ▫ Statement that the parties will be released from their obligations if they fail to negotiate a subcontract ▫ Lack of detailed terms and conditions © 2012 Davis & Steele: Uncompromising Service Unparalleled Value www.davissteele.com
  17. 17. 17Content of a Teaming Agreement• Every Teaming Agreement should contain, at a minimum: 1. the purpose of the agreement; 2. whether the agreement is exclusive or non-exclusive 3. specific duties of the prime contractor; 4. specific duties of the subcontractor; 5. specific consideration 6. confidential information protection provisions; 7. dispute resolution provisions; 8. payment terms; and 9. a term and termination provision. © 2012 Davis & Steele: Uncompromising Service Unparalleled Value www.davissteele.com
  18. 18. 18Content of a Teaming Agreement• Additional provisions (not exhaustive): 1. non-solicitation 2. failure to agree on subcontract 3. exclusivity 4. organizational conflict of interest 5. technology transfer 6. disputes 7. assignment 8. publicity © 2012 Davis & Steele: Uncompromising Service Unparalleled Value www.davissteele.com
  19. 19. 19 Questions? Janice Davis, Esq. Davis & Steele jdavis@davissteele.com Phone: (202) 508-1492© 2012 Davis & Steele: Uncompromising Service, Unparalleled Value www.davissteele.com

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