In A-T Solutions Inc. (A-T) v. R3 Strategic Support Group Inc. (R3), a Virginia federal judge denied a preliminary injunction to prevent a contractor and former teaming partner from bidding on a bomb-disposal contract.
A-T and R3 entered into a teaming agreement to bid on a $50 million bomb-disposal contract in May 2015. The Government canceled the solicitation in July1. After it was reissued in December 2015, R3 notified A-T it no longer wanted to team for the acquisition. A-T subsequently accused R3 of treating the teaming agreement as void, including the provision to keep A-T’s proprietary information confidential. A-T filed suit in the U.S. District Court for the Eastern District of Virginia, filing a motion for preliminary injunction and specific performance to stop R3 from bidding on the contract and to specifically perform under the teaming agreement.
Relying on the Cyberlock decision, U.S. District Judge John A. Gibney, Jr. denied the motion for preliminary injunction and specific performance, reiterating Virginia’s position on teaming agreements – it is an agreement to agree and is unenforceable.
Whether parties seek to enforce the pre-proposal elements of a teaming agreement or the post-award obligations, Virginia courts do not provide a friendly forum. To try and avoid similar results, parties should seek to specify terms, including post-award obligations such as workshare, and use binding terms whenever possible. While not guaranteed to be successful in Virginia courts, you might have a fighting chance!
1 The teaming agreement contained a termination provision that automatically terminated the agreement upon the government’s announcement of the Program’s cancellation. Upon the July cancellation, the agency expressly stated that the solicitation would be reissued. An argument could have been made that the Program was not canceled due to the known reissuance and that it was not an effective termination of the teaming agreement. While it likely would not have affected the outcome of this particular case, it would have been an argument to raise by A-T as part of the request for preliminary injunction.