Contract and Purchase Negotiation - Coursework Example

Contract & Purchase Negotiation: Assignment 5 Part 1 Effective negotiators look beyond the common negotiating strategies to identify and gather other crucial information about their opposing negotiators. Information is power and therefore, having prior knowledge or information about your opposing competitor is imperative to winning or gaining control over the negotiations. As the lead negotiator for my company mandated to provide guidance to my negotiating team, during the session with the contracting officers of the Federal government, I will propose first, we research and gather information about our potential competitors that the contracting officers can procure the GPS guidance equipment from. Having these facts prior to the session will enable us to negotiate factually with the contracting officers and allow us to understand the level of competition we are facing. The Federal procurement process is guided by the Federal Acquisition Regulations, which stipulate the rules and procedures for acquiring goods and services. Therefore, secondly we will explore the FAR requirements that will influence the contracting officer’s decisions regarding the negotiations (Dawson, 2011). Having this knowledge and information in our possession, we will enable us stand a better position to understand the strategies that the contracting officers might employ to win or end the negotiations. Further, this information can enable us to understand the level of urgency for the system required by the divisions of the federal government. Finally, given that the FAR regulates the government procurement process, it implies the number of solicitations might be high because the FAR dictates that all government purchases should be open and subjected to competitive procurement. Therefore, having this information in our possession, we can be able to know the level of competition we are facing and hence help us to set a competitive contract price. Part 2 There are a number of GPS guidance equipment systems available in the market from different companies, which have different specifications and features that make them unique from those of competitors. For instance, we have the Dozer 2000, manufactured by Leica Geosystems, TomTom Start 55TM, Magellan RoadMate 5045-LM, Garmin Nuvi 50LM, Garmin Nuvi 2597LMT, Garmin Nuvi 3597LMTHD nav. unit etc. However, after a close examination of our competitors systems, we realized that our systems have superior technology powered engine systems, which are suitable for large convoy equipment than those manufactured by our competition. For instance, when we analyzed the routing accuracy, one of the most important features of a GPS guidance system, we realized that the equipment of our competitors have an absolute database of points of interest and maps as well as a high lag in acquiring satellite signals. Therefore, one of our most important potential selling points we can use during the negotiations to procure a better deal is the high routing accuracy of our systems, which have a current database of points of interest and maps as well as minimal lags in acquiring satellite signals than those of our competitors. Further, our equipment has a large responsive touchscreen, having a straightforward interface as well as a voice recognition feature that uses visual, and voice commands. Therefore, I believe that our negotiations will be a success and our contract price will be acceptable if the quality of the equipment is anything to by. Ultimately, given that the system is going to run new technology driverless convoys for moving supplies and goods, it implies that the system to be procured must be current in order to be compatible with the new technology powered convoys; hence I believe the procurement exercise will be clean and the contracting officers will accept the price for our equipment. Part 3 The fundamental reason for entering into negotiations is to procure a better deal than you could obtain without the negotiations. Therefore, as a negotiator you will need to find or lay a couple of strategies prior to the negotiation session. As a lead negotiator for my team, I will first propose that, we have a starting position and bottom line before we walk into the negotiations. Effective negotiators know what they want out of the negotiations and hence put it forth in the negotiations. However, this demands substantial preparation and presentation of the right questions formulated during the information gathering process on the contracting officers and the general operations of the Federal government. Further, I will advise my negotiating team, we examine the leverage we have over the contracting officers regarding the contract. Effective negotiators consider the emotional motivation and objectives of the opposing negotiators prior to the negotiating session. Therefore, we will explore and examine the urgency, quality, and type of the systems required by the division in order to run its convoys. Given the competitive edge we have over our competitors in terms of quality and advancement in the systems, I believe we have a leverage that we should capitalize on to procure a better deal for our company. I will also encourage my negotiating team that we take a realistic position before opening the negotiations. This is achieved through critical examination of the leverage we have over the contracting officers and our competitors. Given that, our systems are the only ones with latest technology in the market, and possibly the only ones, which can have highest compatibility with the new technology powered convoys, then I will propose to my team we take a strong position and allow little room for compromise in terms of price. As the lead negotiator, I will also advise my negotiating team to approach the session with information facts such as comparable costs and prices and avoid approaching the contracting officers with unrealistic and unreasonable facts. I believe if we approach the negotiations factually, we can gain a strong negotiating position over that of the contracting officers, which can enable us to control the negotiations and ultimately help us to procure a better deal that is way above the break-even point that can enable our company to make a better profit from the contract. In addition, I will encourage my team to let the contracting officers propose first during the negotiations. I believe if we can manage to convince the contracting officers to make the first offer, we can stand a good position to set the parameters of the negotiations, which will work to our advantage (Luanne, n.d.). Although experts argue that, as the contractors we should be the first ones to make an offer, letting the contracting officers make the first offer, can open a point, which is more favorable than if we made the first offer. Therefore, I believe through this strategy, we can procure an excellent or better deal. Ultimately, I will encourage my negotiating team to make proposals and arguments strategically and incrementally and avoid going down to our bottom-line or break-even point. Effective negotiators set goals and objectives that they want to accomplish from a negotiation process. Therefore, given that, we already know the break-even point that will enable our company to make a profit; I will encourage my team to make proposals incrementally and avoid a situation whereby we could be forced to accept an offer, which would be adverse. For instance, if we split the difference to end bring the negotiations to an end; an offer that our company would not accept. Part 4 Having gathered sufficient information regarding the contracting processes of the government and the contracting officers we are going to engage into the negotiations, I believe it is time to use the best negotiating approach that will maximize our company profits. First, we will us the decoy gambit technique in our negotiations (Dawson, 2011). Having established that, the new technology powered convoys cannot operate effectively and efficiently on old technology GPS systems and the urgency of the systems, I believe if we propose new completion timelines, claiming there is urgent contracts underway for the similar systems; I believe that the contracting officers will object due to the urgency of the systems. Therefore, having left the contracting officers with no alternative, I believe they will commit to an extra payment in return for prompt delivery of the systems. The second gambit technique that we will employ to win the negotiations will be, the being prepared to walk away technique (Dawson, 2011). Effective negotiators must show the opposing negotiators that they are ready to away if they cannot get what they want from the negotiations. Having established the level of competitive advantage we have over our potential competitors and the likelihood of the government to awarding us the contract given the level of sophistication of our systems; I believe if we convince the contracting officers that unless they accept our offer; we shall walk away, then I believe they will settle for our contract price. Further, given that the level of urgency for the systems is high, I believe the contracting officers will have no option than accepting our offer, which will be higher or equal to our company’s break-even point. Part 5 Setting the negotiation terms and conditions is as good as the contract itself. Therefore, since we have objectives and goals that we want to accomplish from the negotiations, the issue of drafting the terms and conditions of the contract is not something we will put at stake because: It will help our team to have a strong bargaining position since we can twist the terms and conditions to fit our interests and priorities. It will help as procure us to procure a better deal if the terms favor us. The party that drafts the terms and conditions of the contract, can have the chance to include some clauses that favor them and thus, drafting the contract can enable us to achieve our objectives and goals from the negotiations. Part 6 Ling (2006) argue that, our body language convey a lot of information about what we are thinking and feeling. They speak the loudest about us although we do not realize. Therefore, during our negotiations with the contracting officers, some of the important common non-verbal communication signals we will be looking for include eye contact; movement of the eyes; facial expressions, posture, gestures and tone variation. As a team we will rely on these common non-verbal communication signals because they demonstrate and convey the true feelings and thinking of a person. In addition, observing for these signals will enable us to understand if the contracting officers are interested in our contract and whether they are being truthful, to what they are saying or offering for the contract. For instance, if we notice that the contracting officers are constantly moving their eyes to look at one another, then we can deduce that they are consulting each other regarding the proposition we have made. If we notice that, the contracting officers are being uneasy in their seats, it implies that they are disgusted about the negotiations and might be suggesting that they want to walk away. Finally, if the contracting officers are rubbing their eyes or putting their hand on their forehead, then they would be showing displeasure implying that they are not happy with our offer. References Dawson, R., (2011). Secrets of power negotiating (3rd Ed.). Franklin Lakes, NJ: The Career Press. Luanne, K., (n.d.). Top Ten Effective Negotiation Skills. Retrieved from http://smallbusiness.chron.com/top-ten-effective-negotiation-skills-31534.html Ling, L. I. (2006). Communicative functions and cultural differences of body languages [J]. Journal of Shiyan Technical Institute, 1, 013. Read More