I love doing this activity with kids (and adults) and leave it purposefully ambiguous about whether the teams can work together. I'll give each team the same set of, usually minimal, materials and tell them all that they are to use what they have to build the tallest free-standing structure possible. Most of the time, the teams compete, but once in a while someone will ask if they can work together. If they stay separate, it's always an interesting discussion about why they thought that they couldn't work with the other teams. I love having them check in on their assumptions in all creative (and non-creative) activities.