The Fear Series: Rushing to Failure

Rushing to Failure

You got the teaming agreement. You got the subcontract. It felt like a win. But not long after the taste of champagne fades away, you get that nagging feeling that you may have rushed to failure. That you should have read that agreement more carefully before putting ink to paper. "It's all boilerplate!" you told yourself. That deal had a short fuse and it had to get done fast.

Common Time Bombs

1. Teaming Agreements with "Give-Away" IP Clauses
You bring proprietary processes, software, or technical data to a team. The teaming agreement looks routine. But buried in the IP section is language that grants the prime a broad license to your background IP, or worse, assigns ownership of anything developed during the agreement. You signed it in a hurry to make a proposal deadline. Two years later, your "partner" is competing against you using your own technology.

Read every IP clause. If it says "assign" anywhere near your background IP (what you bring to the table), stop and get counsel.

2. Subcontracts That Waive Pass-Through Rights
The FAR gives subcontractors certain rights, including the right to flow down protections from the prime contract. But some subcontract templates quietly include language waiving those rights. You may be waiving your ability to submit REAs, claim government-caused delays, or even appeal a contracting officer's decision, all because of boilerplate you didn't catch on page 14.

This CAFC case underscores the importance of scrutinizing subcontract terms to understand the extent of rights preserved or waived. https://lnkd.in/eTCpBq5r

If a subcontract says you "waive" anything, stop and read it again before rushing to the signature page.

Before you sign, ask yourself: Does this agreement have any language that could limit my rights, transfer my IP, or affect my size status, years from now?

If you don't know the answer, find someone who does.