(Editor’s Note.  Creation of exclusive teaming arrangements are powerful tools to win awards.  Lately, government reports have been expressing concerns that these arrangements can prevent competition and so the following helps allay the threat that the mere existence of such an arrangement is not to imply that a violation of antitrust rules exists.)

In ongoing concerns that certain exclusive teaming arrangements may be limiting competition and may represent violations of antitrust laws, the Defense Department is proposing to clarify when antitrust violations may and may not exist.  The proposed rule defines exclusive teaming arrangement to mean that “two or more companies agree, in writing, through understandings or by any other means to team together on a procurement and further agree not to team with any other competitors on that procurement.”  Evidence of violations of antitrust laws may be present only when three conditions are met: (1) one or a combination of the companies participating on the team is the sole provider of a product or service that is essential for contract performance (2) the teaming arrangement impairs competition and (3) government efforts to eliminate the teaming arrangement are unsuccessful.  All three conditions must be met.

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