Team Integrity Knowledge Center

The line between strategic teaming and an illegal pass-through is thinner than most contractors think.

In 2026, enforcement trends show that the Department of Justice is increasingly focused on performance data, not just contract language.

If a large business is performing the “primary and vital” requirements of the contract while the small business prime retains minimal operational control, the risk extends beyond SBA scrutiny. It may implicate the False Claims Act.

Key exposure areas include:
Failure to comply with Limitations on Subcontracting (13 C.F.R. § 125.6)
Unusual reliance under the Ostensible Subcontractor Rule (13 C.F.R. § 121.103)
Financial dependence or proposal control by the subcontractor
Lack of independent management and resource ownership

A strong teaming agreement clearly defines:
• Primary and vital responsibilities
• Independent management authority
• W-2 key personnel leadership
• Operational and financial capacity

If you cannot articulate your firm’s daily operational control, you are not positioned defensibly.

Integrity and performance documentation are your strongest risk mitigators in today’s enforcement climate.

If you’re building or restructuring your teaming strategy this year, now is the time to audit your agreements and internal controls.

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