The teaming agreement states that CGI will „receive“ a 45 percent share of the total contract value, but that „the commitment may not be exactly 45 percent per year.“ It required the parties to enter into „good faith negotiations“ on subcontracting after the award of the main contract. If the parties are unable to agree on a subcontract within 90 days, the team agreement would expire. The terms of the CGI/FCi teaming agreement, as reported by the court, are more typical. For example, it is customary for two contractors to agree among themselves to develop a proposal together, outline a volume of work and a division of labour after the award and agree that they will negotiate a subcontract in „good faith“ at the time of the award. The parties often trust to work out the details after attribution. Sometimes they can`t develop it and the potential subcontractor doesn`t have a contract despite their support for the winning proposal. 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.
More recently, the Virginia Supreme Court reviewed CGI`s Fed. Inc., v. FCi Fed, Inc., Record No. 170617 (Va. S. Ct. 2018) with a teaming agreement stipulating that the proposed subcontractor would receive a 41% share of work. Without the knowledge of the subcontractor, the main contractor submitted a revised proposal proposing an 18% work share for the proposed subcontractor. After the Government had awarded the contract to the main contractor, the parties entered into subcontracting negotiations for which the main contractor refused to offer a share of work in excess of 22%. The Virginia Supreme Court ruled that the formation of a subcontract depended on the success of future negotiations and that despite the defined working community, it therefore did not justify any binding agreement. The court then found that cgi could not recover the loss of profits due to fraudulent concealment – cgi`s only claim for this claim – because the calculation of the loss of profits was speculative.
Id. at 11-12. CGI`s calculation was based on the share of work that the parties never included in a subcontract. The court concluded: „Simply put, cgi cannot recover profits on the basis of a good deal for a subcontract that it has never received.“ Id. at 12. Although FCi did not appeal the jury`s finding that it fraudulently led CGI to assist in the revised proposal, CGI was unable to claim damages for the fraud. . .