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The Difference Between a Nondisclosure Agreement and Teaming Agreement

Teaming decisions are a critical step in securing government contracts. Organizations that create teaming arrangements for an opportunity offer a systematic approach to meeting client requirements and realize several benefits in partnership. Before benefits can be realized, teaming organizations must have contractual agreements in place to work together. Two critical agreements include the nondisclosure agreement and teaming agreement. Though the agreements have similarities, there are key differences between a nondisclosure agreement (NDA) and a teaming agreement (TA) and the purposes they serve.

What is an NDA?

An NDA is a legally binding written agreement between two or more parties that prohibits the disclosure of confidential material and information shared during the partnership. Information that is disclosed between the partnering organizations includes any proprietary information such as pricing data, technical data, and other company-specific information not intended for public knowledge. The NDA protects against disclosure to third parties and unauthorized personnel.
An NDA generally includes the following components:
• a description of sensitive information to be disclosed
• methods of information disclosure between entities
• notes or minutes of meetings made under the NDA
• the terms of the agreement including the time period of its legitimacy
• exceptions, consequences, and waivers that affect the agreement
• any other information vital to the agreement’s relevancy
• the signatures of all parties involved.

An NDA ensures that teaming organizations maintain full responsibility in protecting proprietary data including information about service offerings and new products. It also protects against the use of shared knowledge in the event of partnership termination.

What is a teaming agreement?

A teaming agreement is used when organizations seek to jointly bid on a government contract or other bid opportunity. A prime contractor will partner with a subcontractor company to pursue the government contract as a competitive advantage during the bidding process.

For instance, where one organization lacks capability, the other may bridge the gap. A teaming agreement specifies the responsibilities of each organization during the partnership prior to a proposal win, as well as the work that will be awarded after the contract wins. The NDA terms are finalized in the teaming agreement.

The difference and the benefits of teaming

The purpose of an NDA differs from a teaming agreement. An NDA protects the confidentiality of sensitive information and is a common business contract used between companies or individuals who wish to share information with external parties. The NDA is critical but does not state the requirements for a partnership. The teaming agreement establishes the official structure for shared work and teaming decisions prior to winning new business. It is important that the teaming contract specify the work that will be shared, and in what capacity, upon contract award.

Prime contractors often seek subcontractors to fulfill MBE requirements or to gain niche resources for complex client projects. Subcontractors tend to be small businesses that partner with prime companies to gain access to larger contracts that may otherwise be inaccessible.

Teaming decisions help to strengthen vendor capability statements for the RFP response. Organizations that choose to work together on an RFP increase the chances of creating a compliant proposal that meets evaluation criteria and gaining more business in competitive spaces.

Managing Agreements

It is critical to managing agreements upfront, rather than to wait until the proposal process. Organizations that start teaming decisions during the capture management phase of business development increase win probability and reduce the likelihood of contract disputes in the future.

Agreements should be drafted and shared with a proposal management software or shared portal, sent to subcontractors for review or redlining, and signed upon mutual agreement. Once finalized, agreements can be stored for later review.

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