{"id":2339,"date":"2007-08-17T13:31:00","date_gmt":"2007-08-17T13:31:00","guid":{"rendered":"https:\/\/www.certitrek.com\/nlpa\/2007\/08\/17\/negotiating-a-contract\/"},"modified":"2021-07-29T10:19:59","modified_gmt":"2021-07-29T14:19:59","slug":"negotiating-a-contract","status":"publish","type":"post","link":"https:\/\/www.certitrek.com\/nlpa\/blog\/negotiating-a-contract\/","title":{"rendered":"Negotiating A Contract"},"content":{"rendered":"

I hope that you have enjoyed the article Negotiating The Ultimate Contract. Writing this article reminded me of a \u201cwar story\u201d from my early purchasing days \u2013 not necessarily on negotiating the Ultimate Contract, but more in terms of making sure that the supplier is most competitive on all variables.<\/p>\n

The company I worked for was buying signage like crazy. And our internal customer\u2019s approach to determining demand was soooo non-strategic (if I knew then what I know now, things would have been different).<\/p>\n

Anyway, there were some specialty-type sign items that we were buying. Not every sign manufacturer had the capability to produce the type of precision-cut lettering we were looking for. When our internal customer determined the sign needs for one location, he wanted them ordered NOW! That meant no waiting to determine what else we could package into a deal to have more leverage and get a better price.<\/p>\n

And this was a high-profile project with Chairman of the Board involvement so, as a new buyer, I wasn\u2019t going to push back.<\/p>\n

So we\u2019d go out to bid, select a supplier, and a couple of weeks later go out to bid again. We found ourselves primarily using two suppliers who met our quality requirements, were competitively priced, etc.<\/p>\n

In this one solicitation for signage, one of the suppliers (Supplier A) offered a slightly better price, but the lead time was two weeks longer than the other supplier (Supplier B). So, we decided to pay a small premium to get a better lead time. Knowing the jobs we had in Supplier A\u2019s shop didn\u2019t give us any reason to question their lead time.<\/p>\n

In the debriefing, we told Supplier A that they didn\u2019t win the award because their lead time was 8 weeks instead of 6 weeks (what Supplier B proposed). The supplier ranted and raved that they could have done the job in 6 weeks.<\/p>\n

In my mind, I said: \u201cWell, uh, if you could have done it in six weeks, why didn\u2019t you say that! Doesn\u2019t it make sense to put your best foot forward? Duh!\u201d<\/p>\n

But the supplier wasn\u2019t the only dumb one. I was too.<\/p>\n

With a quick phone call to each supplier to see how flexible their important variables were, I could have saved my company a few dollars \u2013 much more than they would have spent paying me for the few minutes I spent \u201cnegotiating.\u201d<\/p>\n

So, the moral of the story \u2013 and how it ties into the article \u2013 is that a buyer should never assume that any variable is inflexible. Ask for improvement on them all. That\u2019s one of the keys to negotiating the Ultimate Contract.<\/p>\n

Become a member<\/a><\/span>\u00a0of one of the world\u2019s largest procurement associations today.<\/span><\/p>\n

Recommended Reading<\/b><\/span><\/p>\n