Contract Negotiation Series 2

We call contract negotiation when parties with their own interests meet common objectives. The whole process of negotiations is a dynamic alteration and modification so that the terms of the contract can meet both parties common objectives and goals. 

There is no limitation of how many people will negotiate the contract from each side. The negotiation is a chess game, in which it is hard to believe that the game is played between teams. The negotiation usually happens between two persons only, who are the leads of the teams. As the chess game, the leader of the team moves the figures and exercise the negotiation strategy. If a member of the team finds that the leader is not right in some circumstances, then the member needs to strategically inform the leader, but not take the lead as the strategy will fail. It is important for the team to understand that the leader is busy enough not to keep the team under control but to concentrate on delivering the negotiation strategy up to the end. The golden rule that still remains is that the team should never lose sight of the main objectives. 

Do’s and Dont’s in contract Negotiation 

- The party need to follow their leader and not to interrupt him/her during the process

- Active listening is imperative and not to diverge from the negotiation plan. Many contractors don’t listen to what actually the client is about to say, which results in mismatch and disinformation. 

- Be vigilant about contract plan deviations, do not let your team fall into useless discussions, that will surely diverge from the plan. 

- Make sure the information is presented exactly to the point, and do not diverge from the negotiation plan with different or other irrelevant information. 

- Make sure you support the team and do not throw the ball to your team, when unsure how the person is likely to answer. 

- Ensure answer the exact question been asked, do not diverge the answer

- Do not give information ‘’free of charge’’, do not lead your thoughts to diverge from the plan, and do not resend the information that is not relevant 

- Keep your contract negotiation objectives to the point and in front of you all time

- Do not lead yourselves or your team to fall in dispute with the client. Keep it simple and to the point, don’t forget your objectives. 

- Do not argue with the other party

- Make the negotiation process enjoyable 

 When a party randomise itself in negotiation techniques, it ensures the opponent has no better chance of being right than the probability of the random selection. This is a way party can change their negotiation strategy in order to be less predictive in their bids and prices. This especially concerns the limited number of competitors providing certain products or services, where the competitors keep a big database with negotiating behaviours and bids, construction prices and margins. Their main goal is to have the predictability of the price and negotiation behaviour. The most tactical way of achieving competitive advantage in negotiation strategy is to keep it random, where the prediction will be upset. It needs to be acknowledged, however, selecting and maximising the strategy involves a big level of diversion and gambling.

Veselin Shivachev 

Vedera Consulting
+44 (0) 2381941164


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