United States Department of Agriculture Office of Procurement and Property Management Effective Negotiation Refresher August 2008 Exhibit 1

2 Successful Contract Negotiation Success in contract negotiation is when the Government and the vendor reach an agreement that they are both fully committed to implement.  Having the right knowledge, skills, and abilities (KSAs) are crucial to achieving success  Obtaining those KSAs is the first step towards becoming an effective negotiator  Practicing those skills and abilities makes them stronger

3 Knowledge Required for Effective Negotiations  To be an effective negotiator, you will need to know:  The importance of negotiations in Government contracting  The importance of protecting proprietary information during discussions  Basic principles for trade off decisions  Win-win and win-lose negotiation tactics  The procurement tasks associated with contract negotiations  How to choose the right members for the negotiation team

4 Skills of an Effective Negotiator  Good negotiators can:  Lead the Government’s negotiation team  Control a meeting to resolve complex issues  Comprehend complex proposals, updates, and revisions  Apply appropriate negotiation tactics given the situation  Handle difficult people  Maintain a positive outlook and display a professional image  Think outside the box  Maintain the honesty and integrity of the acquisition process

5 Key Abilities to Effectively Negotiate  Strong negotiators have perfected the ability to:  Lead the Government’s negotiation team to obtain the best value  Implement the negotiation strategy yet remain flexible enough to ensure the negotiation objectives are met  Analyze problems and related facts to identify alternatives for resolution  Communicate your ideas clearly and effectively  Be innovative when necessary  Make sound business decisions  Consider negotiation tradeoffs for both the vendor and Government  Display a professional demeanor  Calmly and effectively deal with high stress situations

6 Contract Negotiation Tasks  Select a negotiation team that best meets the acquisition situation  Determine team strategies and tactics to deliver the best approach throughout the negotiation process  Finalize a negotiation plan with the support and input from team members and determine team members’ roles  Brief and present the negotiation plan to upper management for their feedback  Once approved by management, prepare an agenda  Set the date, time and location of the negotiation  Conduct the negotiation  Close the negotiation when an agreement is reached  Develop the price negotiation memorandum (PNM) 6

The Bad, Better, and Best Negotiators  Poor negotiators leave participants hoping they never see you again.  Good negotiators make their points clearly understood by other parties.  Highly experienced negotiators make understanding others their top priority. 7

8 Remember…  Good Listening Skills Makes a Difference  Be in the moment; listen to what is being said.  Maintain a supportive climate so that participants feel free to express themselves.  Try to achieve agreement. Avoid trying to win arguments.  Show that you are listening by asking questions.  Empathize. It helps you to be patient and to remain calm.