Katetutor

1) In Chapter 9 of our World Class Contracting text, the section Best Practices: 45 Actions to Improve Results, lists 45 actions to improve results in the contract award phase. Pick a few of these best practices that you have seen that were successful in action and share your experiences with the class. Comment on the choices of your classmates to discover other best practices that might be useful to you in contract negotiations. Discuss and explain which best practice you have found to be the most important or the most useful to you in the past.

Best Practices: 45 Actions to Improve Results

Buyer (Source Selection)

▪ Know what you want—lowest price or best value

▪ State your requirements in performance terms and evaluate accordingly

▪ Conduct market research about potential sources before selection

▪ Evaluate potential sources promptly and dispassionately

▪ Follow the evaluation criteria stated in the solicitation: management, technical, and price

▪ Use absolute, minimum, or relative evaluation standards to measure performance as stated in your solicitation

▪ Develop organizational policies to guide and facilitate the source selection process

▪ Use a weighting system to determine which evaluation criteria are most important

▪ Use a screening system to prequalify sources

▪ Obtain independent estimates from consultants or outside experts to assist in source selection

▪ Use past performance as a key aspect of source selection, and verify data accuracy

▪ Conduct price realism analysis

▪ Conduct competitiveness price analysis

▪ Create a competitive analysis report

▪ Use oral presentations of proposals by sellers to improve and expedite the source selection process

Buyer and Seller (Contract Negotiation and Formation)

▪ Understand that contract negotiation is a process, usually involving a team effort

▪ Select and train highly skilled negotiators to lead the contract negotiation process

▪ Know market and industry practices

▪ Prepare yourself and your team

▪ Know the other party

▪ Know the big picture

▪ Identify and prioritize objectives

▪ Create options—be flexible in your planning

▪ Examine alternatives

▪ Select your negotiation strategy, tactics, and countertactics

▪ Develop a solid and approved team negotiation plan

▪ Determine who has the authority to negotiate

▪ Prepare the negotiation facility at your location or at a neutral site

▪ Use an agenda during contract negotiation

▪ Set the right tone at the start of the negotiation

▪ Maintain your focus on your objectives

▪ Use interim summaries to keep on track

▪ Do not be too predictable in your tactics

▪ Document your agreement throughout the process

▪ Know when to walk away

▪ Offer to write the contract

▪ Prepare a negotiation results summary

▪ Obtain required reviews and approvals

▪ Provide copies of the contract to all affected parties

▪ Document negotiation lessons learned and best practices

▪ Prepare a transition plan for contract administration

▪ Understand that everything affects price

▪ Understand that Ts and Cs have cost, risk, and value

▪ Tailor Ts and Cs to the deal, but understand the financial effects on price and profitability

▪ Know what is negotiable and what is not

(Garrett, pp. 159-160)

Garrett, G. A. World Class Contracting, 5th Edition