The Cyberlock Decision: District Court Rules That Non-Specific Teaming Agreements Are Unenforceable

Government contractors will want to review their teaming agreements following the recent decision in Cyberlock Consulting, Inc. v. Info. Experts, Inc.. In Cyberlock, the U.S. District Court for the Eastern District of Virginia held that a teaming agreement expressing that the parties would negotiate a subcontract in the future was just an “agreement to agree” and thus unenforceable. As a result, Cyberlock, the prospective subcontractor on a contract award from the U.S. Office of Personnel Management (“OPM”), could not require Information Experts, its teaming partner and the prime contractor under the contract, to agree on a subcontract providing Cyberlock 49 percent of the work from OPM. The Cyberlock decision confirms government contractors cannot rely on generic teaming agreements to guarantee the promise of work under a subcontract. Instead they need to negotiate more definite subcontract terms and conditions that will be effective upon a prime contract award, or alternatively consider other pre-proposal contract vehicles such as joint ventures or GSA contractor teaming arrangements (“CTAs”).

Government contractors generally form teaming agreements to cooperate in developing a proposal for an upcoming solicitation. The teammates usually agree to work together exclusively, and agree to negotiate a subcontract upon award of a prime contract to the team lead. Though specifics vary, a teaming agreement generally maps out what type of work each team member will perform, and the percentage of the overall effort each party will perform.

Please see full update below for more information.

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Topics:  Contract Drafting, Contract Interpretation, Contractors, Teaming Agreements

Published In: Government Contracting Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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