The Pre-Bid Teaming Agreement — What Every Subcontractor Should Have Before Committing to a Prime's Team

A prime contractor recently told a room full of subcontractors something that most of them had already learned the hard way.

Get the teaming agreement signed before the bid goes out. People leave companies. Priorities change. And once the contract is awarded, the leverage shifts.

Without something in writing, a subcontractor can spend weeks helping a prime pursue a public contract only to get cut out after award with little practical recourse.

That is one of the most common mistakes subcontractors make in the Southern California public agency world. It is also one of the most preventable.

What a Pre-Bid Teaming Agreement Is

A pre-bid teaming agreement is a contract between a prime contractor and one or more subcontractors governing how the parties will work together in pursuing a specific project opportunity.

It is not a joint venture. No separate entity is formed. The prime remains the prime contractor. The agreement simply establishes the rules of the relationship before the proposal is submitted.

In practice, the agreement usually gets drafted by the prime. Which means the document naturally protects the prime’s interests first. The subcontractor’s protections have to be negotiated into the agreement intentionally.

Many subcontractors either sign these agreements without review or move forward without any written agreement at all. Both approaches create unnecessary exposure.

Why the Rug Pull Happens

Most subcontractors have seen some version of this before.

The prime needs a particular trade partner, certification, or past performance profile to strengthen its proposal. The subcontractor spends weeks attending meetings, helping with pricing, contributing technical input, preparing proposal materials, and participating in the pursuit.

Then the contract gets awarded.

After award, the prime decides to self perform the work, bring in another subcontractor, or renegotiate the scope from a position of leverage.

The original subcontractor helped the team win the project but ends up with little or nothing.

Sometimes this is intentional. Sometimes it is simply business. Either way, the subcontractor absorbs the cost.

Without a written agreement addressing post-award obligations, the subcontractor is usually left arguing implied promises or reliance based theories like promissory estoppel. Those claims are difficult, fact intensive, and expensive to pursue.

A properly structured teaming agreement does not eliminate disputes. But it creates contractual leverage before the dispute starts.

What a Teaming Agreement Should Include

Not all teaming agreements are created equal. A prime-drafted agreement will include provisions that protect the prime. Here is what a well-negotiated teaming agreement should also include for the sub.

Exclusivity provision.

One of the biggest issues is whether the prime is free to shop the same scope around to multiple subcontractors during the pursuit.

Without exclusivity, a prime can use one subcontractor’s certifications, relationships, or proposal support while simultaneously negotiating with competitors behind the scenes.

The subcontractor may think they are “the team” while the prime is still evaluating alternatives.

A good teaming agreement should define whether the arrangement is exclusive and, if so, how broad that exclusivity is. In many cases, limited exclusivity tied to a specific trade package or scope is more realistic than project wide exclusivity.

Primes resist exclusivity because it reduces flexibility. Subs need it because they are investing time and resources into helping the proposal succeed.

Scope definition.

The agreement should define the subcontractor’s anticipated scope with enough specificity that the role cannot be materially narrowed later.

That means identifying the trade, work package, and ideally the approximate percentage or anticipated value of the scope.

Vague language gives the prime room to reinterpret the relationship after award.

A subcontractor may believe they are pursuing the full mechanical package while the prime later claims the understanding only covered a small portion of that work.

Specificity matters.

Decision-making authority.

One issue subcontractors often overlook is whether the person they are dealing with actually has authority to bind the prime.

The business development lead or project executive may be heavily involved in the pursuit but still lack authority to commit the company contractually.

That becomes a problem when personnel change during the procurement cycle.

The person who made the promises leaves. The new team disclaims the arrangement. Suddenly the subcontractor is trying to prove commitments that were never formally authorized.

The agreement should identify who has authority on both sides and clarify that material commitments outside the agreement require written approval from authorized representatives.

What happens if the prime wins and substitutes you.

This is the most important section in the agreement and often the weakest in prime drafted forms.

The subcontractor should push for language requiring the prime to negotiate and enter into a subcontract for the agreed scope if the prime receives the award.

Even more importantly, the agreement should address what happens if the subcontractor is removed or substituted after award.

At minimum, the subcontractor should seek recovery of pursuit related costs. In stronger situations, particularly where certifications or unique qualifications materially contributed to the award, the subcontractor may push for additional remedies tied to the lost scope.

These provisions are heavily negotiated for a reason. They matter.

Metro and agency protections that supplement the agreement.

For public agency work involving DBE, SBE, or DVBE participation requirements, the subcontractor may also have regulatory protections independent of the teaming agreement itself.

For example, agencies like Los Angeles County Metropolitan Transportation Authority and Los Angeles World Airports often require agency approval before a certified subcontractor can be terminated or substituted.

That process may include notice requirements, response periods, and agency review before substitution is permitted.

Those protections can create real leverage. But they only help if the subcontractor understands the process and invokes it early.

Too many certified subcontractors do not realize those rights exist until after the leverage is already gone.

What happens if the prime loses the bid.

Most teaming agreements terminate if the prime does not win the contract.

But the subcontractor should still review what obligations survive after termination.

Who owns proposal materials? Are there ongoing confidentiality obligations? Can the subcontractor pursue the project with another prime later?

Those issues should be addressed clearly before the pursuit begins, not after it ends.

The Pre-Award Relationship Without a Written Agreement

A surprising number of subcontractors commit significant time and resources to a pursuit based entirely on verbal assurances.

That is risky for several reasons.

First, verbal commitments are hard to prove.

Second, the person making the promise may not actually have authority.

Third, public procurement pursuits can last months. Personnel change constantly during that time.

A relationship that felt secure during the pursuit can disappear overnight when the internal champion leaves the company.

The solution is not complicated. Before committing serious resources to a pursuit, get the core terms documented.

Even a short letter agreement is materially better than relying entirely on conversations.

When to Involve Legal Counsel

Not every teaming agreement justifies a major legal spend.

But there are situations where review becomes important.

When the project is large relative to the subcontractor’s business.

When the relationship with the prime is new or untested.

When the agreement includes unusual provisions involving indemnity, restrictive covenants, intellectual property, or broad post termination obligations.

And especially when the subcontractor’s certifications, relationships, or past performance are a meaningful reason the prime is competitive for the award in the first place.

That is the moment when the subcontractor has leverage. Once the contract is awarded, much of that leverage disappears.

The Bottom Line

The teaming agreement is not just paperwork before the “real” contract arrives.

It is the document that determines whether the subcontractor’s investment in the pursuit actually translates into work, revenue, and enforceable rights.

Good primes value strong subcontractor relationships and many operate fairly. But procurement pressure changes incentives quickly once projects are awarded and margins tighten.

The subcontractor who understands the pre-bid relationship as a legal and business negotiation, not just a handshake, is in a much stronger position when things do not go according to plan.

That conversation is far easier to have before the bid goes out than after the project is awarded.

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Langston Tolbert is the founder of the Law Office of Langston A. Tolbert, P.C., a boutique law firm focused on transactional and strategic counsel for contractor and infrastructure businesses in Southern California.