1. Contract Negotiations Landon Hill November 2018

2. Landon Hill
Procurement Manager. NCMA Fellow. CMLDP Alum. Father. Husband. Decent Cook. Sports Coach. Busy all the time. Love it.

3. Agenda What Is Negotiations Or Negotiating? Negotiation Process & Tips
Building The Relationship
Don’t Just Accept

4. “The art of negotiation – more powerful than Martial Arts, yet easier to master”
Getting to ‘no’

5. What Exactly is Negotiating?
Discussions or activities aimed at reaching an agreement
*Audience answer – What is negotiating ?
Negotiation is a dialogue between two or more people or parties intended to reach a beneficial outcome over an issue where a conflict may exist.
And they are necessary! Why? Because the parties have different interests and objectives. And often, the resolution of the competing interests inherently has an adversarial nature.
With observation, education, and practice we can become very effective negotiators. Maybe even mastering the art of negotiations.

6. What Exactly is Negotiating?
FAR Part 15: Contracting by Negotiations A contract awarded using other than sealed bidding procedures is a negotiated contract
*Audience answer
Who can tell me what part of the FAR covers negotiations?

7. What Exactly is Negotiating? The Negotiation ‘Game’
There is a certain amount of gamesmanship in every negotiation.
Part Chess – skill, not chance; requires strategy; anticipating the other side’s move
Part poker – don’t know the other side’s cards; stakes can be high; you might see bluffing

8. What Exactly is Negotiating?
Humans have been negotiating for a long time. We did it as kids.
We do it in our personal lives.
*What are some aspects of our daily lives that can result in negotiations? Marriage. Buying a car.

9. The Negotiation Process – 4 phases
Agreement
Bargaining
Info Exchange
Preparation
The negotiation process, depending on where you look, has standard steps or phases.
Negotiation

10. Preparation
There are no substitutions to preparing. And if you don’t prepare – you’re willing to accept any outcome and your negotiations will be a Win-Lose situation.
How many of you have cooked dinner without preparing? Without going to the store or thinking it through? You probably have, and you may have had a decent meal, but it doesn’t stand up to one of those great home cooked meals where you prepared!

11. Preparation Make sure you’re in a negotiation situation
Clarify your aims
Gather information
Negotiate with your own side
Set a BATNA
Prepare the setting
Prepare yourself mentally
Sounds simple enough, right? Not necessarily. Negotiations have an adversarial nature. If there is no advantage to you, then don’t negotiate; you’ll just lose.
There are lots of hopeful goals in negotiations, but getting what you want or really need should be at the top. Don’t get so wrapped up in every detail that you forget what’s truly important.
Make sure you learn and gather info about the other side’s offer and position, and use this info to refine your approach. And this is true throughout the negotiation – do lots of listening, clarifying and checking.
Sometimes you might go into a negotiation alone, especially as a very small business, but it isn’t usual to represent yourself. Make sure you spend time getting your team on board with the goals ahead of time.
Best Alternative to a Negotiated Agreement, and is the only certain way to be successful in negotiations. We don’t always get what we want. Setting alternatives allows you to fall back when needed, and still walk away feeling successful.
When setting up a negotiation situation, ask yourself the 5 big questions – Who will take part. Where will it be. When will it occur. Why are we negotiating. How are parties presenting their cases.
The right attitude can make the difference between a successful and unsuccessful negotiator. Aim to be business-like and alert. Don’t put yourself above or below the other party. Stay relaxed and don’t reveal your feelings

12. Information Exchange Begin to engage the other side Share information
Explore options
The Information Exchange phase occurs when you begin to engage the other side; finding out their interest and positions. And to get there, we share information and explore options that address interests and positions.
This is where you attempt to create a level of comfort so they feel OK with sharing information with you.

13. Information Exchange Focus on building the relationship
Trustworthiness
Competency
Likeability
Alignment of interest
But most importantly, this is where we start building that relationship. Building rapport and trust; without it neither party will feel comfortable sharing information openly.
*So, how do we focus on building the relationship? Do your social homework! Find out about their business culture and show appreciation, personality, sports or other outside
Go over the 4 points.
And here is the kicker – they’re considering how you are in these areas as well!
One great tip on figuring this level of relationship info is to PROBE. Encourage the other person to give a more detailed answer and for them to elaborate on his/her response. Example “Anything more?” or “Why do you think this is fair?” or “What led to this decision?”
Obviously, you can’t spend forever in this phase or building the relationship. At some point you have to assess the situation and jump into the next phase – bargaining.

14. Bargaining Give and take – moving closer towards a resolution
Presenting the offer
Making concessions
Moving towards a solution
Summarizing progress
If you feel success means all take and no give, you’re not going to capture value and you risk alienating the relationship that is so critical. 1.
2. Making concessions is important – don’t accept everything, but know what’s important to you ahead of time and have a good understanding of what you can concede on. And when you’ve planned ahead of time and know what you can concede on, it helps eliminate emotions – No quicker way to damage a relationship than to show the wrong emotion at the wrong time.
3. Keep reminding yourself to move towards a solution. Sounds simple, right? In a face to face where face-time is precious, don’t let the conversations get to far off track or spend to much time. Don’t be afraid to say “Can we table this topic?” if you aren’t making progress.
4. Summarizing progress helps 1) to keep the conversation moving, 2) remind everyone what’s been said or agreed on, and 3) reminds everyone that ‘hey, we’re making progress’.

15. Bargaining - tips Listen and remain open to ideas
Don’t feel pressured to agree on each issue
Saying “I understand” is better than “I agree”
Never make two offers in a row
Don’t let emotions overrule sound business logic
Pause, re-group, seek advice
Be patient - conceding takes very little time
Listen to the other side, remain open to ideas
Demand the same from the other side
Don’t feel pressured to agree on each issue
It’s OK to say “I understand”, not “I agree”
Never make two offers in a row
Don’t let emotions overrule sound business logic
Pause, re-group, seek advice
Be patient
If needed, conceding takes very little time

16. Agreement
Now we’re at the agreement phase. Time to celebrate, right??? Not yet!
This is where you first must ensure a mutual understanding on all negotiated topics. This is the wrong time to have ambiguity. Once everything is in writing, in the contract, make sure you review everything to make sure everything is understood. And reaching a binding and mutually satisfactory agreement
And never forget to THANK the other party for their willingness to negotiate – even when no agreement is reached.

17. The Negotiation Process – 4 phases
Agreement
Bargaining
Info Exchange
Preparation

18. “If it’s not applicable then it’s self deleting”
Don’t just accept
Buyers
Sellers
“If it’s not applicable then it’s self deleting”
FAR 8.404(a) – COs are required to seek discounts above the SAT