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.Teaming agreements in a nutshell are simply legal contracts betweentwo or more companies.Firms agree to do something, or to refrainfrom doing something.Such agreements obviously need to be for alegal purpose and meet all legal requirements in order to be enforce-able.These arrangements can be called whatever the participants wantto call them: agreements, alliances, arrangements.Sometimes the word"strategic" is also inserted in the title.Teaming agreements between one company and another means thattwo or more companies will join forces to go after a new segment1.Marcelo Prince and Pat Maio, "EDS Wins Huge Contract To Revamp Military Computers,"The Wall Street Journal, October 6, 2000. Corporate Teaming Arrangements 37of work, often a particular new project.Each company will commitsomething unique to their arrangement: financial resources, their keypeople, company assets, technology, etc., and each will expect to sharein the risks and rewards of the endeavor.Perhaps a couple of specificdefinitions will help us to understand the concept.Two leading authors in the field of project management havedefined such arrangements in the following manner:Teaming Arrangement.An agreement of two or more firms toform a partnership or joint venture to act as a potential prime con-tractor; or an agreement by a potential prime contractor to act asa subcontractor under a specified acquisition program; or an agree-ment for a joint proposal resulting from a normal prime contractor-2subcontractor, licensee-licensor, or leader-company relationship.Still another definition of the same subject may better reinforce ourunderstanding.Since many of us work on contracts funded by theUnited States Government, perhaps we should understand their per-spective of such arrangements:Teaming Arrangement.An arrangement between two or morecompanies, either as a partnership or joint venture, to perform ona specific contract.The team itself may be designated to act as theprime contractor; or one of the team members may be designatedto act as the prime contractor, and the other member(s) designat-ed to act as subcontractors.When the characteristics of joint con-trol (i.e., joint property, joint liability for losses and expenses, andjoint participation in profits) are evident, then the teamingarrangement is a joint venture.When these characteristics are notpresent then the arrangement may more closely resemble that of a3prime contractor/subcontractor.2.Dr.David I.Cleland and Dr.Harold Kerzner, A Project Management Dictionary of Terms,(New York, USA: Van Nostrand Reinhold Company, 1985) page 253.3.Defense Contract Audit Agency (DCAA) Contract Audit Manual, part 7-1802, c,January, 1996. 38 Project Procurement ManagementOne of the features common to both of these definitions is that bothsuggest that such agreements will form either a "joint venture" or a"partnership" between the parties.Thus, we should also understand twoadditional definitions to fully grasp the concept.Partnership.An ordinary partnership occurs when two or moreentities (persons) combine capital and/or services to carry on abusiness for profit.From a legal standpoint, it is a group of sepa-rate persons.4In the world of purchasing or supply chain management theysometimes will use the term "partner" to describe what this book wouldconsider as a teaming agreement:A 'partner' is defined as a firm with whom your company has anongoing buyer-seller relationship, involving a commitment over anextended time-period, a mutual sharing of information and a5sharing of risks and rewards resulting from the relationship.A good definition of a teaming agreement.Perhaps of interest is thefact that this definition came from two academic researchers who found intheir study that while only 1% of buyer-suppliers relationships werecovered by such partner agreements, but that the 1% accounted for some12% of the purchasing volume of these firms.Thus, such relationshipswere very important to the strategic viability of the firms employing them.Now let's understand the other common thread in the above definitionsof teaming agreements, that of the joint venture:Joint Venture
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