How does a joint venture (JV) differ from a teaming agreement for federal contracts?

A joint venture (JV) is a separate legal entity formed by two or more companies, while a teaming agreement is a contractual arrangement between a prime contractor and a subcontractor for a specific project. For federal contracts, the key distinctions lie in legal structure, liability, and how each affects contract awards. A JV, as a separate legal entity, would register in SAM.gov with its own Unique Entity ID (UEI) and CAGE code, and it would be the direct awardee of the contract. This structure means the JV itself is primarily liable, and the parent companies have liability according to their JV agreement. In contrast, with a teaming agreement, one company is the prime contractor, holding the contract directly and bearing primary liability, while the other is a subcontractor. The prime is responsible for the overall performance of the contract and for managing the subcontractor relationship. The FAR, specifically FAR Part 9.6, addresses contractor team arrangements. While your potential partner is not a protege, the SBA does allow for JVs between non-protege firms. The choice between a JV and a teaming agreement depends on the complexity of the project, the desired level of shared risk and reward, and long-term strategic goals for future bids.