The Six Steps of the Negotiation Process

There are six steps of the negotiation process are: (a) defining the desired results, (b) gathering data, (c) analyzing the situation, (d) planning, (e) bargaining , and (f) documenting the agreement. 1. Defining the desired results to be achieved – This stage begins as the acquisition team defines the requirement, starting with market research. The acquisition team begins formulating the criteria for success and determining the future buyer-seller relationship during this step. 2. Gathering of data – Costs often vary among contractors. Insight into the prospective contractor cost is obtained by gathering data early in the process. The best source of this data is asking the contractor. By doing so, the CO can understand the potential contractor’s interests behind the cost positions they are taking. 3. Analyzing the situation – gathering the facts on the proposal preparation includes determining the business interest of the potential offerors.

No two negotiations are the same, but the outcome usually depends on three factors: (a) the bargaining power of the parties, (b) information each party has, and (c) the time available to reach an agreement. 4. Planning – many consider planning the most important step in negotiations, the more prepared you are the more you know about your goals and their goals, your absolutes and theirs, amount of flexibility, time limits, creative alternatives, pressures the greater opportunity to make a deal. 5. Bargaining – In government, contracting there is a distinction between discussion and bargaining as they are related to give and take of negotiations. The primary concern of the CO is the overall price the government will pay for the goods or services. More specifically, the CO is to negotiate a contract with a price that provides the contractor with the greatest incentive for efficient and economical performance. The CO should seek a balance among contract type, cost, and profit. The scope and intensity of discussions are a matter of the CO’s discretion.

6. Documenting the agreement – it is important to document the agreement in order to keep a record of all significant considerations and agreement for facilitating their recovery if the need arises (Engelbeck, 2002, pp. 296-306) (Department of Defense, 2008).

References
Department of Defense. (2008). Federal Aquisition Regulation. Washington DC: Department of Defense. Engelbeck, M. (2002). Acquisition Management. Vienna: Management Concepts.