From the relational contract approaches currently emphasized in construction, researchers have noted that there is enough evidence pointing toward social psychological theories of team formation. Building on a theoretical framework, this paper analyzes social, construction, and team formation literature through a comprehensive literature review. Findings reveal that construction teams form as small worlds out of clusters that emerge either through contractual, professional, task, or trade relationships, which strongly supports the proposed theoretical framework for social networks in construction. This paper contributes to the body of knowledge by bringing together three diverse theories of team formation, social network, and collaborative teams into construction engineering and management research while at the same time identifying gaps and areas for future research. In addition, this study reveals that fragmented construction teams are characterized by clusters, and resources are constrained from one cluster to the other. As such, construction teams lack bridging ties necessary to reduce social distance between members, an area that has received limited attention from researchers.