Elements and Performance Criteria
- Plan and prepare for strategic procurement negotiations.
- Input and advice are obtained from key stakeholders and the procurement and negotiating context is identified.
- Information is gathered on suppliers and a best alternative to negotiating an agreement is developed.
- Objectives, targets and bottom line position are determined for negotiations.
- Composition of negotiating team and limits on negotiators' authority are determined according to organisational policy and procedures.
- Negotiation process, timeframes and strategies are determined to suit complexity of procurement and supplier characteristics.
- Negotiation plan/directive is developed that identifies negotiation roles of team members, lead negotiator, negotiating styles, tactics and boundaries/limits of authority to suit the procurement activity.
- Negotiation plan is authorised and signed off according to organisational policy and procedures.
- Undertake strategic procurement negotiations.
- Negotiations are opened, supplier tactics identified, and issues and options explored to identify mutually compatible interests.
- Minor and major issues are dealt with and concessions to terms and conditions are negotiated to improve overall value for money of the procurement.
- Concessions are made such that agreements remain consistent with original intentions and with procurement, organisational objectives and probity requirements.
- If negotiations stall, tactics are used to break deadlocks and continue negotiations according to negotiation plan and organisational policy and procedures.
- Negotiations are conducted and an offer is made in accordance with legislative requirements, organisational policy and procurement guidelines.
- Finalise strategic procurement negotiations.
- Negotiations are closed and agreements are finalised according to procurement guidelines.
- Where agreement is not possible immediately, communication channels are kept open while additional support, arguments and supporting evidence are obtained.
- Where agreement is not possible and the best alternative is to be pursued instead, negotiations are terminated in a way that preserves the relationship with the supplier for possible future business and deters the possibility of legal liability.
- Where agreements may have wider implications for procurement and the organisation, those implications are considered and necessary consultation is carried out.
- Details and outcomes of negotiations are documented according to organisational policy and procedures.