Contract Negotiation Strategies
The final stage in the vendor selection process is developing a contract negotiation strategy. The worst contract negotiation objective is to bleed every last centout of the vendor for the lowest price. Remember, you want to "partner" with your vendor so that both of you will meet your corporate goals and objectives by signing the contract. Successful contractnegotiation means that both sides look for positives that benefit both parties in every area while achieving a fair and equitable deal. A signed contract that benefits both parties will provide a firmfoundation to build a long lasting relationship with your vendor.
Objectives of Contract Negotiations
The following contract negotiation objectives can be use to evaluate the contract on each of thefollowing items:
• Explain clearly all essential prerequisites, terms and conditions
• Goods or services to be provided are unquestionably defined
• Compensation is clearly stated: Total cost,payment schedule, financing terms
• Acknowledgement of: Effective dates, completion/termination dates, renewal dates
• Identify and address potential risks and liabilities
• Define and set reasonableexpectations for this relationship currently and into the future
Strategies for Planning Contract Negotiations
1. List Rank Your Priorities Along With Alternatives
As you develop your contractnegotiation strategy, you may keep returning to this area to add additional items. You will not be able to negotiate effectively all areas of the contract at once. You want to be sure that what is mostimportant to you is discussed and agreed upon before you move to less important items. In addition, you may want to refer to the least important items if you have to give up something to get your topitems.
2. Know the Difference Between What You Need and What You Want
Review your priorities frequently throughout the contract negotiations planning process and one final time at the end. Be...
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