Team members are required to submit a proposal to the

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Team members are required to submit a proposal to the prime contractor
covering the team members’ portion of the effort.
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Statement-of-work tasks are clearly divided among team members in the
event of contract award.
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Protection of the competition-sensitive proprietary information of all team
members is provided for.
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The proposed prime contractor is responsible for adhering to contract
terms and conditions.
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The proposed prime contractor is responsible for daily management in the
event of contract award.
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The prime contractor is obligated to negotiate a subcontract in good faith
if the team receives a contract award.
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Exclusivity is guaranteed, ensuring that team members cannot be easily
replaced and that team members will not simultaneously act as team
members and competitors by teaming with other firms on the same pro-
curement.
S
UBCONTRACTING
When the team members are successful in their procurement pursuit and the pro-
posed prime contractor is awarded a contract, the team members must then nego-
tiate in good faith to enter into a subcontract. The subcontract serves to formalize
the legal relationship between the team members and the prime contractor.
The key issue related to subcontracting concerns the notion of contract privity. In
general, two parties are in privity of contract if they are both parties to the same
contract. In federal procurement, the prime contractor and the government are in
privity of contract with each other on the prime contract. Consequently, the prime
contractor bears full responsibility for adhering to contract terms and conditions.
The prime contractor and the subcontractor are in privity of contract with each
other on the subcontract. The prime contractor is responsible for conveying man-
datory government terms and conditions to the subcontractor.
The government does not stand in privity of contract with the subcontractor, even
though there seems to be an indirect relationship because the subcontractor is per-
forming under the prime contract. Thus, if the subcontractor fails to adhere to