I thought Getting Past No was very good as well as Getting to Yes.
All the best
• Vaisala Inc.
Balkan Odyssey by David Owen. Terrific example of failed negotiation, which we can learn from as well.
Jennifer - The Magic Pudding by Norman Lindsay is always a good one for relationships and negotiation. For example, when Bunyip Bluegum met Bill Barnacle and Sam Sawnoff eating from the Magic Pudding and asked 'Pardon me,' he said, raising his hat, 'but am I right in
supposing that this is a steak-and-kidney pudding?' 'At present it is,' said Bill Barnacle. 'It smells delightful,' said Bunyip Bluegum...Bunyip Bluegum was too much of a gentleman to invite himself to lunch, but he said carelessly, 'Am I right in supposing that there are onions in this pudding?' Before Bill could reply, a thick, angry voice came out of the pudding, saying-
'Onions, bunions, corns and crabs,
Whiskers, wheels and hansom cabs,
Beef and bottles, beer and bones,
Give him a feed and end his groans.'
'Albert, Albert,' said Bill to the Puddin', 'where's your manners?' 'Where's yours?' said the Puddin' rudely, 'guzzling away there, and never so much as offering this stranger a slice.' 'There you are,' said Bill. 'There's nothing this Puddin' enjoys more than offering slices of himself to strangers.'
'How very polite of him,' said Bunyip, but the Puddin' replied loudly- 'Politeness be sugared, politeness be hanged, Politeness be jumbled and tumbled and banged. It's simply a matter of putting on pace. Politeness has nothing to do with the case.' Negotiation is equally about how we share the pudding and generating pace in pursuit of our objectives, and never just about politeness.
New International Technology Co.
I've seen this type of requests many times even for large and strategic deals. This type of ask is primarily seen in Govt sponsored deals. One of the reason for such ask is to restrict Supplier's mark-up and for transparency, gain share etc. I think you should first ask Customer why they would like to see Supplier's internal costs. Are they going to compensate the Supplier if Supplier can't achieve the estimated margin?
If they are looking for transparency, you can submit the break-up of your Charges (Y-o-Y/M-o-M, FTE cost, Non FTE cost, break up of Non FTE costs etc.) and also the Y-o-Y resource loading (FTE) if that helps. For submission, you can fill in the relevant portions of the Price Form where Charge needs to be mentioned leaving cost details blank and add assumption that you would like to initiate the discussion on cost details in the next phase. Hope they will not disqualify you for not providing the cost details. I believe if your price is competitive and solution helps Customer achieve their business goals then definitely Customer will shortlist you for the next round unless its a Govt sponsored deal and it is one of the qualifying criteria to submit the cost details.
In principle, your response sounds correct. Altering the terms unilaterally after award may indeed represent a material change, though of course you will need to make a prompt assessment of the nature and impact of the changes.
From your post, I get the impression that the Ts&cs are being driven by the consultant - but is that the case? Does the owner mandate the 'standard' and have they made the alterations - perhaps a result of current market conditions and experiences? Understanding the source and rationale behind the changes may be important in determining how and where you push back.
Of course you may want to revert on specific impact - for example, does this affect your price or delivery commitments? You may also want to negotiate some of the altered terms - for example, if risk allocation has shifted. But another response could be to take the position that this opens up more general negotiation and that if there are terms they want to change, you also have some changes you'd like made.
If these alterations were inspired by the consultant, they may back down because they will perhaps not want to explain to their client why this delay is occurring (especially if they made a mistake in the initial terms that were attached). But if the origin is the customer, you may need to be more cautious, especially if you do not have an existing or strong relationship.
Both parties should have an interest in ensuring that change requests are handled in a timely manner. Sometimes customers try to leave this unspecified because that way they can ignore any change which may cause an increase in time or cost.
Being too specific on a number of days can also be problematic because the nature of the change may vary in its complexity. There are several ways you might approach this:
1. Specify a number of days within which the change must be acknowledged and a date for resolution agreed, with a proviso that the resolution must be within a period no longer than x days or the change will be deemed effective.
2. Specify that all changes take effect 7 days from notification unless the other party makes a counter-proposal within that period.
3. Categorise changes into, say, three different classes, probably based on the nature and complexity of the change. Class one might have a requirement to resolve within 7 days, class 2 within 30 days and class 3 to be agreed case by case between the parties.
You may also want to consider a provision related to the consequences of failing to agree a change in a reasonable or specified period. For example, does the change simply become effective? Or does failure to agree result in permissible delay or suspension of work / service? Perhaps you want a clearly defined escalation process to support resolution; this could include referral to an independent expert to resolve disagreement.
I hope these ideas help!
• TRADING AND AGENCY LTD
The Standard language in Oil & Gas Contracts is that no Change shall be performed unless executed through a Change Order (CO). However, in order to allow for events where Parties are unable to agree on a Change, Clients include a provision in the Contract to issue either an Instruction to Proceed (ITP) or a Disputed Change/Variation Order which obligates the Contractor to perform first and negotiate later. Still, it is worthwhile to include a maximum response time which obligates the Client to acknowledge Contractor's Change Request either by issuing a CO or ITP within the agreed timeframe.
Hi Padraic, thanks for your post and certainly we agree that good negotiation skills are needed now more than ever. I am not sure whether you have had the chance to look at our Managing Contracts Virtually program and the webinars that we have produced on Virtual Negotiations. Links are here for your reference. Many thanks! Sally
I suggest that you read the document published by the world renowned Kenneth Adams, available at adamsdrafting.com/downloads/Best-Efforts-Practical-Lawyer.pdf
• DACOTA Consulting
In addition, I would be very cautious when using the experession "best efforts" in a result-oriented or outcome-based environment. Why ? Simply because best efforts means different things for different people. So in a result-oriented or outcome-based environment I suggest to be clear and use the proper words uncluding outcome and result.
With best regards.
Hi Cate - look, I'll rise to the challenge of the discussion here. Here's the link to this on the IACCM website, and it's also on the commitment matters blog. www.iaccm.com/resources/
In defence of the Western world, I'll say two things :
1. I think that the relationships of many organisations and their teams are certainly being put to the test right now. Personally, I'm seeing a lot of good outcomes in these challenging times across a number of organisations, especially in the emergency sector which I think is an indication that the relationships, albeit perhaps not as deep as those in Asian culture are seeing good outcomes.
2. I'd turn this question around and, perhaps take the heat off the negotiators, ask if it's the organisations who are stupid, or perhaps better put naive. Again, I see a lot of good stuff in this area. IACCM ave challenged the thinking of people and asked why in times of performance, do we go straight to the penalty clauses after courting a supplier through the RFx process. I see many organisations, my own included, using the Significant Services Contract Framework put out by MBIE in New Zealand to make these relationships stronger. For instance, for every such contract, our CE meets with their CE annually which is evidence that perhaps it's not all lost. But I think many negotiators and those in procurement often have budgetary constraints or drivers set by the business. That is, either they can't invest time and money doing this, or their focus set by their leaders is more focussed on cost reduction as a measure of success.
Hopefully others in the Western world reading this will step up and agree or contribute, or perhaps those from the Asian culture might want to post and share their views and experiences as well.
I note your profile refers to "Moreland City Council", I assume Melbourne (Australia).
Note - this response references 'UK' practice and legislation, different rules may well apply in your jurisdiction.
In the UK consideration would need to be given as to whether the contract was let under a government framework (or similar 'public procurement rules'), if so there may well be restrictions in place as to whether you could extend further.
If it is under a Framework, in the UK you would need to offer a 'Direct Award' extension (if permitted). If it is 'non-framework' then you would almost certainly be able to extend subject to agreement with the supplier.
Assuming you can extend, doing so after the previous contract has expired is generally permissible as long as both parties agree; for 'neatness' I would suggest that the extension applies with 'retroactive effect' from the day the previous contract expired, so there aren't any 'uncovered periods'.
Hope this helps
NOTE: you need to be wary of anti-bribery and corruption laws - extending 'expired' contracts rather than running a competitive procurement process often leads to concerns being raised - you may well need to demonstrate that this is very much an 'interim and last resort' measure as a precursor to a full competitive procurement process.
• Victorian Council - Australia
Thank you, Steve
Thank you for the prompt reply!
I agree with your comments
Victoria's IBAC (anti-Corruption body) highlighted that as one of the red flags for corruption
Generally speaking, we do not extend contracts beyond their expiry dates, especially if all extensions have been exhausted.
I am coming to these special and few cases that we have to manage. I am trying to balance commercial needs and legal exposure if any.
Of course it depends on the legislation of each country.
In my case we have gone from avoiding having extensions or addenda to contracts to try as a first option to extend the contract through an addendum since there are many associated advantages such as having a long-term collaborative relationship with the contractor. Manjeand the risk of corruption we have achieved very good agreements to extend contracts.
IACCM Networks are collaborative, community driven professional networking sites. Our contributors publish their
own content as well as links to third-party articles and websites, and IACCM cannot be held responsible for content posted here.
View Content Policy
IACCM cannot guarantee or warrant the accuracy, reliability, currency, completeness or legality of such content, third-party articles, or
linked websites, and disclaim all responsibility for the use of any inaccurate, incomplete or illegal content contained in or linked from IACCM
and disclaim any and all liability to the user for any damages, including without limitation, direct or indirect, special incidental, moral or
consequential damages, loss of profits, opportunities or information or for expenses arising in connection with your use of IACCM, its services,
forums or the site content, even if they (individually or as a group) have been advised of the possibility of such damages, losses or expenses;
do not warrant that IACCM operates error-free, nor that defects, errors or omissions will be corrected, or that IACCM is completely secure;
disclaim any and all warranties of any kind, including but not limited to implied, express or statutory warranties as to non-infringement of
intellectual property rights, or third party rights, title, latent defects, uninterrupted service, merchantability, fitness for a particular
purpose, and freedom from computer viruses; and
do not warrant or guarantee that files available for downloading through IACCM will be free of infections or viruses, worms, Trojan horses or
other code that contains contaminating or destructive properties.
IACCM, including any and all aspects of IACCM, is not a substitute for independent professional advice and users should obtain
any appropriate professional advice relevant to their particular circumstances. Users must exercise their own skill and care with respect to
their use of IACCM and must carefully evaluate the accuracy, currency, completeness and relevance of the material on the site for their
purposes. The user should carefully assess any and all information obtained through IACCM before applying it to the user's situation. Never
disregard, avoid or delay in obtaining professional advice about handling engineered or other nanomaterials or nanoparticles because of
something you have read on this site. The advice the user finds in IACCM is freely offered in good faith, but no legal liability can be
accepted by IACCM, members on IACCM's Implementation Committee, IACCM's operators, content partners, content contributors or providers, or
IACCM contains links to other Internet sites that are external to IACCM. IACCM takes reasonable care in linking Internet
sites but has no direct control over the content of the linked sites, or the changes that may occur to the content on those sites. It is the
responsibility of the users to make their own decisions about the accuracy, currency, reliability and correctness of information contained in
linked external Internet sites. Links to external Internet sites, or links to documents, do not constitute an endorsement or a recommendation
of any material on those sites, or in those documents, or of any third party products or services offered by, from or through those sites or
those documents. Users of links provided by this Internet site are responsible for being aware of which organization hosting the Internet site
To report any innappropriate content, please