Planning is the cornerstone of effective negotiation. As a best business practice, depending on the requirements, it is recommended that the negotiation team engage in pre-negotiation planning to ensure that all relevant issues are adequately defined.
Negotiation is a procedure that includes the receipt of proposals from offerors, permits bargaining, and usually affords offerors an opportunity to revise their offers before award of a contract. Bargaining is done in the sense of discussion, persuasion, alteration of initial assumptions and positions, and give-and-take. Negotiations usually include three stages:
∑ Preliminary negotiations, and
These stages may include some of the items listed below:
Fact Finding Stage
∑ Review and discuss offerorís proposal and results of analysis from support team.
∑ Check inconsistencies between buyer and sellerís cost information.
∑ Probe for rationale behind the sellerís basis of estimates for the various elements of the proposal.
∑ Obtain clarification from seller concerning questions raised with respect to its proposal.
∑ Identify general negotiation objectives.
∑ Attempt to determine the range of negotiation position.
Preliminary Negotiation Stage
∑ Critique additional data or re-pricing received form the seller.
∑ Narrow the range of objectives.
∑ Determine if both parties are ready to negotiate.
∑ During this stage, negotiators are trying to obtain the most favorable terms.
∑ Involves discussion, hard bargaining, compromise and reaching final agreement.
Issues which might be negotiated include, but are not limited to:
∑ Contract Type
∑ Payment Terms
∑ Terms & Conditions
∑ Technical Requirements
∑ Scope of Effort
∑ Delivery & Schedules
∑ Contract Price, and
The Evaluation Team may choose to engage in negotiations with any or all of the offerors who have submitted a proposal. The Evaluation Team may request the assistance of appropriate personnel, including technical line organizations, auditing, price/cost analyst, etc., in preparing for negotiations.