Chapter 3 Assembling Your Negotiation Team
There are eight important steps I’m convinced you need to master to prepare for a negotiation. We’ll cover all these steps in detail. Being properly prepared when you walk into a negotiation is, by far, the best negotiation strategy you can have. Here are the steps for preparing to negotiate:
1. Assemble the team.
2. Gather data.
3. Identify your priorities.
4. Establish your prenegotiation objectives.
5. Research the other party.
6. Develop your negotiation plan.
7. Rehearse your plan.
8. Develop your negotiation agenda.
If you follow these steps, and give careful consideration to what you are doing in each step, your negotiations should go well. By the way, do you think a book like this on government negotiations has some bleedover into your everyday life? You bet! As you go through these steps, think about how properly executing them can help you cut a better deal next time you buy a car, or a washing machine, or a house.
First of all, please understand, properly preparing for a negotiation takes time. Each of these eight steps requires an investment in time, but the payoff is well worth it. Just remember that when you build your acquisition time lines, give yourself enough time to prepare properly.
I know this looks like a lot of work—and it is—but thankfully you don’t have to do it alone. In fact, can you see how hard it would be to conduct the negotiation, be the technical guru, take notes, observe the other side for reactions, double-check contractor facts and figures, and think up tactical maneuvers singlehandedly all at the same time? It would be impossible! Even if you are the sole negotiator, you’ll probably work extensively with your support team to help you prepare before you sit down at the negotiation table. In almost all negotiation situations, you’ll be able to draw from the power of a team, both before and during negotiations. And you, the CO, are responsible for putting the team together—sizing it, choosing the team members, and training it. So, who are your potential team players and how do you pull this team together?
CHARACTERISTICS OF A NEGOTIATION TEAM
A negotiation team is truly a unique creation. First of all, it’s usually created for a one-time event. It’s not normally an ongoing enterprise. Once you finish the particular negotiation for which it was created, it goes away. Although there may be some bleedover of personnel, for the most part you’ll have a different team for each negotiation, depending on what customer you are supporting and the technical knowledge required for whatever you are buying. The good news is this allows you to tailor team composition and team size to fit your situation. The overall scope of negotiations, expertise required, complexity, dollar value, visibility, and so forth, are some of the factors you should consider when you’re creating the team. The bad news is that this constant shifting of team membership complicates your team training and coordination efforts.
Second, your team will not be a naturally cohesive unit. It will consist of people who do vastly different jobs, report to different bosses, and have dissimilar and sometimes opposing goals and agendas. Team members, especially your technical specialists, realize they will only be together as a team for a short time and then go back to their “normal” jobs. The very reason they were selected to be team members—their unique abilities, training, and skills—tends to work against team cohesiveness. This makes the negotiation team a very difficult team to lead. And you, as the CO, are the leader! Your challenge is to unite all this discord into a unified front that gets the job done, while not squashing the very uniqueness that makes this kind of team so effective. This task, in itself, may require good negotiating skills on your part. It’s true that sometimes the hardest negotiations you’ll ever be in are with members of your own team.
Finally, and on the good side, this fluid negotiation team structure allows you to fit the right people with the right expertise into the right position to address the peculiarities of the negotiation situation. This ability to tailor the team composition to fit the situation greatly increases your ability to achieve a best-value result that satisfies your customer in an effective and efficient manner. It also means, thank goodness, that you don’t have to be the expert in everything. You won’t have to spend nights boning up on technical jargon and processes. You won’t have to become a property expert overnight. You won’t have to research the legal ramifications of doing this or not doing that. You have smart folks on your team who specialize in these areas, which leaves you free to concentrate on the things you are trained to do best—planning for a professional negotiation that achieves an optimum business outcome that’s best for everyone.
You have a number of team players to choose from, representing all kinds of different expertise. And remember, you always have the option of adding team members (in other words, bringing in particular experts) when and where the situation justifies it. Let’s now look at some of the traditional members you’ll pick to be on your negotiation team.
TEAM MEMBERS
A host of team members make up the negotiation team. Each plays an important role leading to a successful outcome for the government team.
Every team needs a team leader, a quarterback, and the CO usually fills that role. As the CO, you need to be in complete charge of your team in preparing for the negotiation—and everyone needs to know it. If you don’t establish firm control of your team from the outset, things can quickly get out of hand, confusion will reign, and mistakes will be made. You, the CO, are responsible for conducting the negotiations, and it’s a true leadership role.
As a CO, hopefully you have been well trained to use sound business judgment to resolve problems in the taxpayer’s best interests, and you are the one (usually the only one) trained in the intricacies of federal government procurement rules, regulations, and policies. You’re the expert! No, you may not be the most technically competent when it comes to the actual substance of what you are negotiating, but you need to be an expert at pulling together the appropriate functional experts and leading them through a business process—and a negotiation is definitely a business process.
If you’re lucky, you may also have a contract specialist to assist you in preparing for and conducting negotiations. These are folks from the contracting office who are fully trained in contracting practices and procedures, but they aren’t warranted as official COs. In my opinion, contract specialists are the unsung heroes of the acquisition world. They do most of the grunt work, make their share of important contracting decisions, and then pass all their work to the CO for approval. Unfortunately, the CO is usually the one who gets all the glory, and the contract specialist is simply rewarded with more work.
When I was a government CO, I was blessed to supervise some of the best contract specialists in the world. Some of these folks actually had more contracting experience than I did, and they “saved my bacon” on quite a few occasions. They can be worth their weight in gold to you, especially during the negotiation preparation stage. Some contract specialists are even trained as expert contract negotiators and can be put into negotiations as the team leader. You would be wise not only to delegate as many functions to them as possible, but to seek their advice and counsel actively during the negotiation process.
In many complex negotiations, especially if you plan on negotiating a cost reimbursement-type contract, or have special, complicated incentives on fixed-price arrangements, you’ll definitely want a price analyst or a cost analyst on your team. These are the folks that can really “do the math.” In fact, that’s their sole job and focus. They are trained to do things like price analysis, cost analysis, should-cost analysis, learning curve applications, overhead and indirect charge applications, profit and fee analysis, forward-pricing rate projections and adjustments, and so on.
Do you think these talents will give you a leg up in preparing for negotiations? You bet! They can help you prepare for negotiations by tearing a contractor’s proposal down to its basic cost elements and analyzing them. They then can crunch the numbers to give you, in their expert opinion, what the numbers actually should be—given different situations. They can help you prepare “whatif” scenarios and help you develop the dollars-and-cents rationale behind your minimum, maximum, and target negotiation positions. They are your experts on all pricing matters.
During negotiations, their expertise can be vital in defending your position, backed up with hard, cold, mathematically verifiable facts. They can also greatly aid you in determining the cost/price impact of proposed changes that may come about as a result of the give-and-take of negotiations. Do you think you could use their expertise on your team? You bet! Unfortunately, not every agency has them, and some that do don’t have enough of them. If you’re unable to get price/cost analysts assigned to your team, guess who picks up their responsibilities by default? Yep. You guessed it. You, the CO.
Technical Representatives/Technical Eperts
Technical representatives and technical experts usually come from your customer’s organization, and they are absolutely essential for the success of your entire negotiation. They are the people who have intimate knowledge of the design and technical approach for the product or service you are negotiating for. It’s their need that you’re fulfilling, and they are the experts in knowing what can and can’t satisfy that need. Their expert knowledge of the technical aspects of the requirement is just as important as your price/cost analyst’s work, since design and technical approach have a huge impact on cost, risk, quality, and so forth. They are experts on such things as: the merits and chances of success of various technical approaches, the customary technical practices in the commercial marketplace, quantities and kinds of material, number and kinds of labor hours and the labor mix, special tooling, scrap and spoilage factors, and the feasibility and acceptability of proposed changes to work methods or approaches. They’re the backbone of your negotiation team, the reason you’re there in the first place, and the reason you have a job! Treat these folks with the respect they are due.
By the way, they can also help you, the CO, understand more about the thing or service you are negotiating for by putting the technical jargon in layman’s terms. But remember, although they may have no peer when it comes to the technical aspects of the negotiation, they usually have little or no training in the process of negotiation—the business side to getting the deal done. That’s your area of expertise. And that’s why it’s critical that the negotiation team leader be from the contracting “side of the house.”
Sometimes you may have other representatives from your customer’s organization who aren’t necessarily technical experts, but have a keen, vested interest in the outcome of the negotiation. Program managers are an example, and they can be members of your negotiation team. Their job is to manage and direct the overall program that your contract supports. They are responsible for meeting performance, schedule, and cost goals and they usually have management authority over all technical and business aspects of the program. They usually have their own customers to support—the ultimate end users of the product or service for which you’re negotiating—and they’ll want to be included in the negotiation to represent their customers’ and the program’s interests.
Program managers may be (and usually are) higher in rank or grade than you, the CO. Although your job is to contractually support the program manager as your customer, always remember that you are in charge of the negotiations. You have specialized contractual training and knowledge the program manager doesn’t, so you must control the show despite rank or grade differences. You’ll find that most good program managers already know this and are more than happy to let you be the boss during negotiations.
Obviously, there are more potential team members—auditors, legal counsel, small business specialists, quality assurance specialists, property specialists, and so on—that you’ll want to consider adding to the team if the situation warrants. These folks don’t necessarily have to be permanent members of your negotiation team, but can simply be “matrixed in” for short periods as the situation dictates. Bottom line: It’s your responsibility as the CO—the team leader—to assemble a team tailored to the needs of the specific negotiation situation.
A few more points before we move on to the next step. Always pick the first-string players to be on your team, not the scrubs. You may get a lot of “help” from your customer, who may volunteer members to you, but you ultimately must pass judgment on their qualifications (on whether they are right for the job). Remember also that your support team can (and should) be much larger than the few members you actually take into the negotiation event with you. These other team members (the ones who help you prepare for negotiations) are just as critical to your success and should be thought of as full members of the team.
Now, for any team to be successful in negotiations, it must have a few crucial attributes: good leadership (that’s you), clear objectives, and one consolidated position. The team, as a unit, must also be able to take advantage of the wealth of information, knowledge, and expertise that’s represented by all the individual members of the team. So your next step, after you select your team, is to get them together to kick off the endeavor.
BRIEFING THE TEAM
As soon as you select the members of the team, your next step is to schedule a face-to-face kickoff meeting with them. You, as the CO and leader of the team, are responsible for doing this. You’ll need to schedule this meeting as soon as possible after the need to negotiate is identified, and plan for the meeting to be about an hour in length. Remember, your team may consist of more people than you will actually take into the negotiation room, so don’t forget to include those folks too.
Be sure to give yourself enough time before this meeting to establish a written agenda—it can be informal—and to prepare for what you’re going to say and what you need to cover. If time permits, try to get copies of the agenda to the team members beforehand so they’ll also know the topics of discussion. You’ll use this meeting to organize your team and start the training process.
After making introductions, start by clearly establishing your authority as the CO and leader of the team. This is especially important if some of the team members outrank you or are a higher grade than you. Then assign and clarify each team member’s roles and responsibilities in preparing for the negotiation. This is usually a no-brainer, because these roles will logically fall along functional lines. Let them know this will probably be the first of several get-togethers you will have as you prepare for negotiations.
After roles are assigned, clearly dictate to each team member the specific duties you’ll expect them to accomplish to help the team prepare for negotiations. This will become your negotiation preparation action plan, and it’s crucial to keep things on track and to make sure you cover all the bases. Again, these duties will usually fall along functional lines and the areas of expertise of your team members. Make sure to attach “action dates” (which sounds better than “deadlines”) to each duty you assign, and make sure you assign each duty to a specific team member. You may have the best action plan and milestone chart in the world, but if you don’t assign actual people to the tasks—and make sure they understand they are responsible for getting their tasks done on time—your plan will simply crumble.
The first duties you’ll assign will support the team’s data-gathering effort. For example, you will most likely ask your contract specialists to do market research into other similar contracts, or have your program manager or technical representative research what’s standard practice in the industry for what you’re buying. You’ll also ask your technical folks to develop specific questions on the technical aspects of whatever contractor proposal you’ll be negotiating. Your job, or the job of your contract specialist, will be to research the business terms and conditions in the proposal, and which business terms and conditions are common to that industry. Assign your price analyst the job of crunching the numbers.
Just because you’re the team leader doesn’t mean you assign all the duties to everyone else. Always save some duties for yourself—like researching the contractor’s financial position, competitive position, and probable negotiation strategy and tactics. Remember, unless you delegate it, you are responsible for it, in addition to ensuring that all team members meet the goals you establish. Always have someone record meeting minutes and distribute them to your team members after the meeting.
The kickoff meeting is also a great forum to educate the team on how to conduct government negotiations. Because some team members may not be familiar with their responsibilities, brief them on procurement integrity, rules on disclosing source selection–sensitive or other government information, and restrictions on disclosing a contractor’s bid or proprietary proposal information. Remember, this first meeting is to set the stage for the negotiation process and to kick off the data-gathering effort. You’ll need other meetings to discuss the data gathered, choose your negotiation strategy, come up with your government position and objectives, assign roles for the actual negotiations, and practice the negotiation. If you can, set the times for these meetings during the kickoff meeting.
End the kickoff meeting by stressing the importance of the negotiation to the customer (and ultimately the taxpayer) and stress preparation as being the key to success. Most of these folks are smart (or you wouldn’t have them on your team) and they will have many other things on their plate vying for their attention. You have to convince them that this effort should be their number one priority.
After you adjourn the meeting, remember to provide the team members (and their managers) with a copy of the minutes as soon as possible. Make sure the minutes have appropriate markings if they contain source-selection or proprietary information.
Please understand that the key to preparing for negotiations is to gather pertinent data. As you just learned, it’s a team effort. So, where do you go to get the data? What kinds of data and information do you need? There are basically two types of information you’ll need to gather: information to help you establish your pre-negotiation objectives, and information about the “other side.” We look at gathering data in the next chapter.