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Module 10 - Procurement Negotiations F22Std.pdf -...

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11/14/20221Module 10:Conduct ProcurementsProcurement NegotiationsPMPG 5012 – ProjectProcurement ManagementAgendaReviewAssignment #5Procurement negotiationsNegotiation strategiesNegotiation TechniquesNegotiation preparationInclass PreparationFor Next Class2Conduct Procurement cont’d:The delicate dance of negotiation….123
11/14/20222Negotiations“During a negotiation, itwould be wise not to takeanything personally. If youleave personalities out of it,you will be able to seeopportunities moreobjectively.”Brian Koslow45Negotiations• A process in which two or more parties who havecommon interest and conflicting interests attempt toreach a mutually satisfactory agreement• A peaceable procedure to arrive at a mutually agreedupon settlement• “The discussion between buyer and seller over adisputed matter(s) hopefully leading to a mutualagreement and settlement”(Fleming)6Negotiations• Clarifies the structure and requirements of the contractso that mutual agreement can be reached prior tosigning the contract. The final contract reflects thenegotiated and agreed items:• Roles and responsibilities• Terms and conditionsTechnical requirementsManagement approachesFinancingProject/Triple ConstraintsPayment schedule456
11/14/20223Negotiations – A Form ofCommunicationWhat are the goals of your negotiation?PRICE (?)Define some other objectives to have more optionsAdditional objectives are opportunities to educatestakeholders that price is not the only one goalConsider weighted evaluation criteria (used in RFP)List your goals before negotiationsPrioritize each goal7Negotiation PlanningWhat are the goals of your negotiation?Consider the following (prenegotiation):What exactly do we wish to achieve from thisnegotiation?Which of our objectives –a.Must we achieve (mandatory)b.Do we intend to achievec.Would we like to achieveWhat options are alternatives would be acceptable tous?What are the objectives of the other negotiating party?How does the other side see the negotiation?8Negotiations (cont.)InformationGather information about the people who will benegotiating for the sellerAsk for names and titles of everyone involved in thenegotiationFind out who has the final decision and who is the keyinfluencerAsk for / source resumes of everyone on the seller’snegotiation teamGet to know those people if possibleAsk questions about seller’s operations, subcontractorsand providers9789

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