You have worked hard to develop your partnership and use it to land contracts with your combined skills. However, you and your partner might not have the same understanding or way of thinking about your partnership. This lack of clarification could come around to hurt if you don’t address it from the start.
Often this situation is most troublesome to small businesses that have teamed up with larger ones or when a subcontractor teams up with a lead contractor. An RFP gets published and either a team is formed to reply or one that exists will reply hoping to win the business.
A team does not have to sign a contract to work together to win government contracts. But the RFP process can take months before potentially being won or work starting. If enough time passes a subcontractor will be forgotten with only his word and the lead company’s word that he would get a share of the work.
This is not a guarantee nor is it proof of whatever verbal agreement existed between the partnership. Maybe the original deal maker doesn’t even work at that company anymore or has moved on to the next proposal and no one else knew about the arrangement. The program managers or operations people are now in charge of the awarded contract and they’ve already picked the subcontractors they want to use.
Unfortunately, now you’ve lost any leverage you had with the main contract holder and all that business you thought was coming in, isn’t. With so many teams popping up for government contracts written agreements are more important than anything. And you as the subcontractor need to have a fully executed team agreement before proposal submission begins while you still have the leverage.
Don’t be surprised, get it in writing.