It remains to be seen whether the analysis of intent and specific terms by the Virginia Cyberlock Court will become the applicable law with respect to written team agreements. Until now, it was only the interpretation of Virginia law by a federal court. Regardless of this, there is a simple solution for contractors to increase the likelihood that their team agreements will be enforced: add as many specific conditions as possible to the team agreement. This fulfills both avenues of the judicial inquiry to determine whether a specific team agreement is a binding contract. The inclusion of specific conditions for the envisaged future agreement will indicate to a court that the parties have entered into formal negotiations, indicating both their intention to be bound by the agreement and the extent of each of the parties` obligations under the future subcontract. The more precisely contractors can negotiate in the team agreement, the better. In 2012, CGI signed a team agreement with FCi to co-develop a Ministry of Foreign Affairs contract proposal in which FCi would act as lead contractor and CGI as subcontractor. FCi retained the exclusive right to enter into the proposal and to negotiate a main contract with the resulting government. Unfortunately, it may happen that the team leader and the team member do not enter into the subcontract provided for in their team agreement. While the team leader and team member may agree not to enter into the subcontract, one of the parties more often believes that the other party acted inappropriately and breached its obligation to enter into a subcontract under the team agreement.
In these cases, one party may take legal action to compel the other party to abide by its agreement in the team agreement and enter into a subcontract. Together, these nebulous and qualifying aspects of the team agreement meant that the intention of the parties – as the agreement said – was simply to agree on negotiations at a later stage. Citing the Virginia law that “the circumstances that show that the parties intend to enter into a formal contract are strong evidence that they did not intend the previous negotiations to be akin to a [binding] agreement,” the Cyberlock court ruled that the teaming agreement in question was not enforceable. The teaming agreement amended by CGI-FCi identified several conditions of a subcontract and acknowledged that even the 41% share of work was not engraved in the stone. CGI has not negotiated or negotiated more definitive terms or a remedy (for example. B lump sum damages) if CGI iBF was not subcontracted, CGI had to have confidence that a good faith negotiation after award would result in an acceptable subcontract. One solution to avoid this outcome could be for the team leader and team member to negotiate and agree on the subcontract at the time the team agreement is concluded. If the government assigns the main order to the management of the team, all that remains is to execute the subcontracting. The parties can even provide trust signature pages that will be released when the main contract is awarded. Cyberlock is notable because the court refused to consider extrinsic evidence that the plaintiff allegedly provided to some of the missing essential terms and instead focused exclusively on the terms of the team agreement. The Tribunal concluded that the agreement had clearly postponed the solution of the key terms to future sub-contractual negotiations and that the parties had promised nothing more than to try to formally negotiate a subcontract within general parameters at a later date.
In this regard, Cyberlock distanced itself from CE&G, which relied heavily on the parties` proposal to the government when it decided that the parties had accepted the essential terms of a subcontract. . . .