Teaming Agreements Can Help Government Contractors Capitalize on Increased Defense Spending

The passage of President Donald Trump’s comprehensive tax and sending bill, the One Big Beautiful Bill Act, has significant implications for private companies in the defense industry. Among its provisions, the bill provides for a total defense budget for fiscal year 2026 of more than $1 trillion, with billions of dollars earmarked for the development of entirely new programs.

In order to take full advantage of these opportunities from increased defense spending, companies must familiarize themselves with the legal regime that governs preliminary contracts in the industry. In particular, companies considering entering into a teaming agreement — often used to meet the multifaceted needs of a government contract — must understand their agreement’s enforceability and the obligations each party in the “team” incurs. Without this knowledge, companies might find themselves tied up in disputes over the requirements of a potential subcontract, which may delay the project’s completion and undercut its ultimate success.