Negotiations - an integral part of the RFP process
Negotiations - this sounds simple. You discuss a disagreement,
try to understand the other party's perspective and find some
common ground.
Procurement people, however, find negotiations difficult,
seemingly complex and often intimidating. However, negotiations
are an integral part of the RFP process. The simple act of adding
a negotiations step to your evaluation process will reduce the
risks of failure, improve the quality of the proposals, improve
your understanding of the proposal and in many situations, lower
the price.
The negotiations process is a four-step process: preparation,
fact-finding, bargaining and agreement. It generally fits in
to the process after a short list of vendors has been selected
and before the contract with any one(s) of these has been signed.
Preparation involves assembling a negotiation team,
knowing the details of the proposal being considered and establishing
the boundaries of an acceptable agreement. All of this information
is typically included in a negotiations plan.
Fact-finding - clarifying and gathering additional
information on issues of concern to either party - ensures that
each party shares a common understanding of the requirements,
the RFP and the offer.
Bargaining is the difficult step. At this point each
party will put forward its negotiating position and seek resolution
of disagreements. Conducting negotiations is a vast topic, but
a few objectives are good to keep in mind: aim for a win-win
result for both buyer and supplier; agree on the issues; and
behave such that both sides can reach agreement without a "loss
of face".
The agreement, reflecting all of the essential terms
defined in the negotiations, concludes the negotiations phase
of the RFP. Nothing left but the signing!
For a more detailed description of
negotiating with respect to public sector procurement practices,
consult the RFP Report: the
newsletter of ideas, checklists, guidelines and information about
the Request for Proposal
by Michael Asner. asner@compuserve.com
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