You must have both teams in the same team project. You and Dan are creating several teams that all exist within the same team project and get their own backlogs.
http://nakedalm.com/creating-nested-teams-visual-studio-alm/
Most of my clients moved to a single team project, and I have a simple rule:
βIf you have assets that are related (with assets defined as code, people, or work items), you should be on the same team project.
I just did in London, combining about 15 team projects into one so that the whole organization can work together. It was 6 teams of 12 products, all moved to one team project.
The only effective way to work together is in one bucket of work.
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