Did you know?
The Federal Acquisition Regulation (FAR) states that any contract awarded using a method other than sealed bidding procedures is considered a negotiated contract.
That means that, if you submit even a single proposal to a federal, state or even local government entity, you need to be prepared to engage in a bargaining exchange. While many contracts are awarded based on the price you offer in your original RFP response – and Simplified Acquisitions rarely require sit-down, face-to-face negotiations – public sector agencies will frequently initiate contract negotiation proceedings in either…
That being said, there has also been an increase in negotiations for IT solicitations at the state level. A NASCIO-NASPO joint task force has spent the last few years considering ways in which state agencies can introduce and/or improve negotiation processes for contract awards that would have otherwise been reliant solely on suppliers’ initially proposed pricing terms. They have specifically focused on IT procurements that are reliant on agile project structures versus the traditional “waterfall” project implementation framework. However, such actions to evolve negotiation practices are not new.
Government agencies are constantly seeking ways to improve their return on investment (ROI), which means they strive to extract the most value from their vendors, starting with contract negotiations when warranted. If you want to ensure a mutually beneficial outcome the next time you’re invited to negotiate a contract with a government agency, take heed of this advice:
Final tip: Be flexible. Don’t get upset or offended if you feel that the procurement official, or the customer, is trying to drive a hard bargain. The goal of negotiations is to achieve mutually acceptable contract terms and equally valuable outcomes. For you, that may be profitability on this project; for the government, that may be achieving project requirements for the lowest cost possible. So, ask for a break if you feel that you’re hitting a wall (before you lose your cool and the opportunity).
Once you take a step back from the table, it will be easier to re-evaluate the pros and cons of the current contract terms and weigh your options with a clear head. Unfortunately, that may result in you stepping away from this particular contract opportunity completely. However, passing on this contract could open up the door – and free your resources – for a better opportunity in the near future; an opportunity whose contract terms align with both your goals and the government’s.