Aerospace and Defense Series: Leading Antitrust Considerations for Teaming Agreements

by McDermott Will & Emery

This newsletter identifies when “teaming agreements” between contractors will raise antitrust issues, and suggests some practice tips for evaluating or defending those arrangements.

Defense and aerospace contractors often enter into teaming agreements or other collaborative arrangements to jointly pursue contract awards.  In most cases, teaming is fully consistent with antitrust law.  However, in some circumstances, teaming can raise significant antitrust concerns.  This newsletter highlights some of the leading factors contractors should take into consideration when considering teaming agreements.

  • Just because teaming is commonplace does not mean it is always lawful.  Teaming agreements generally involve agreements under which contractors will jointly pursue a procurement and often require the teammate/subcontractor to commit not to bid independently or with another partner.  That agreement not to compete may, under certain circumstances, adversely affect competition and can be unlawful.  Contractors should avoid a false sense of security based on teaming being a common practice.
  • Teaming agreements can raise criminal concerns under limited circumstances.  In most cases, an agreement not to compete independently but to pursue an award only through the team will be viewed as ancillary to an efficiency-enhancing integration of activities.  If the parties legitimately integrate their approach, the teaming agreement will be reviewed under the rule of reason.  On the other hand, if there is no real combination of resources, but a simple agreement not to compete or to allocate who will win different bids, the team may be investigated as a criminal violation.
  • Companies should be able to articulate how the proposed team combines complementary skills that will benefit the customer.  It is not sufficient to state this as boilerplate in a whereas clause.  The companies may need to explain to law enforcers how the team is complementary, and accurate contemporaneous documents will aid those discussions.
  • Teaming can be a concern if it combines the two leading bidders for a contract.  Understanding what firms are likely to pursue a contract, and which are best situated to win the procurement, is necessary to evaluate whether the combination through a team is likely to reduce or enhance competition.  Again, contemporaneous documents assessing the strength of different potential bidders for the contract are very important to this evaluation.
  • Teaming can be a concern if it locks up a critical component or technology that other bidders require in order to compete effectively.  An exclusive teaming agreement, even between companies with highly complementary skill sets, still can raise vertical foreclosure concerns.
  • Customer views are very important, but they need to be at the right level.  Company personnel may report that someone in the customer organization has encouraged the teaming agreement.  It is important to consider whether this represents the views of the customer organization or whether it is an offhand comment from a lower level person that would not be supported by the broader organization. 
  • Parties should consider whether to disclose the teaming agreement to the antitrust regulators.  There is no mandatory antitrust notification requirement for a teaming agreement.  For agreements that are believed to be lawful, but that raise significant antitrust concerns, the parties may elect to approach the U.S. Department of Justice Antitrust Division or the Federal Trade Commission to evaluate the arrangement before implementing it.

Overall, the vast majority of teaming agreements raise no significant competitive issues.  However, some teaming agreements do have the potential to significantly affect competition.  Companies should evaluate those agreements carefully by conducting an analysis of the remaining competition, the complementary benefits offered by the team and the likely customer views on the arrangement.

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.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.