20 Top Tips for Successful Contract Negotiation – Part 2

The second in our series of 20 top tips for contract negotiators.


 

Business Handshake

This post includes the second 10 of our 20 top tips for contract negotiators (See here for part 1). Whether you are David Davis himself, a project manager, part of a sales or buying team, a procurement expert or commercial manager, cut and keep these 20 top tips in your ‘back pocket’, and in future your contract negotiations will go like a breeze!


Top Tip Number 11

Needs and wants

Have a good idea what is in your list is what the company needs, and what individuals want. The requirements have taken a long journey through many approval processes with many opinions added. Its good to have an understanding of the ‘internal politics’ of your overall procurement what are needs, what are perhaps wants, and how these apply to your priorities.

Top Tip Number 12

Use ‘flexibility’

Delivery dates and performance standards may be more important to your organisation than the content or price. Make an assessment of your Quality, Delivery, Cost (QDC) triangle as you may need to ‘trade along the lines’ of any one of these parameters to get to a successful agreement.

Top Tip Number 13

Reduce the risk of disputes

Use the contract negotiations to include possible solutions to future issues. As an example; if there were delays would it be possible to include a method now that could change deliverables and price that everyone could agree with? The absolute last resort is to end up with a contract that ‘goes straight to court’ over a dispute (where only the lawyers are happy!).

Top Tip Number 14

Understand the role of your legal support

Your legal team can, and should, provide you with the legal framework for the contract that will help in the event a dispute or litigation. It’s very likely that your legal support won’t know the complexities of the item you are selling/procuring, the technical issues, and potential risks involved with the delivery of the contract. But if you’re not confident that you can complete the negotiation without creating a ‘legal’ risk for your organisation then always seek help.

Top Tip Number 15

Consider your buyers/suppliers position

Once you have completed your own preparation follow exactly the same process as though you are your supplier. Try to think like them, and consider what motivates them. You may not know answers to all of the planning points but a little research may go along way to a successful outcome, and may help you to understand why they are making the decisions they are.

Top Tip Number 16

Your team

Before any negotiation starts ensure your team knows the negotiation strategy, who is leading, and also that everyone in your own team knows who has the final say on any negotiating point. Arguing amongst your own team over a point during the meeting is very unseemly (it does happen!).

Top tip Number 17

The agenda

Make sure that you have a meeting agenda (even if its not written down) and what is most important to you will be discussed and agreed before you move to less important items. This is because you may need to trade your less important items to get your priority needs and wants.

Top Tip Number 18

Take control

Finally when you enter the room, take control, and ensure everyone understands why the negotiations are being carried out, and why they are there. If there is any doubt explain why you are there, gain agreement, and then explain what your approach will be before you start.

Top Tip Number 19

Take a break!

Never be concerned about calling a break during discussions if you need too. Breaks can also be a useful tool, As an example; you may have spotted a disagreement in the other side that could be to your negotiating advantage and giving them a chance to discuss something between themselves may just move it in your favour.

Top Tip Number 20

Calling it a day

If they are complex Contract Negotiations can be quite tiring for everyone. Tired people don’t make the best decisions, no matter how macho it seems to ‘negotiate into the night’. Set a time for how long the meeting is to go on and try to keep to it. If you do need to go over the alloted time agree to resolve only the current point, or even consider leaving it to the next meeting.