Chapter 1 Flashcards
Following public procurement regulation, PQQ etc, there are 5 tender processes a buyer can choose from. Can you name them?
Open tender process - this is a one stage process. IF supplier number are limited the buyer will immediately issue the RfP/ITT. It’s important to remember that this has no PQQ state!
Restricted tender process - following the submission of PQQs, suppliers are then shortlisted for selection. Those selected with be sent RfP
Competitive procedure with negotiation - same as restricted but after initial RfP submissions there are subsequent rounds of proposals and negotiations . No more is allowed after final submissions. This is obviously very time consuming.
Competitive dialogue - used for complex requirements where the spec may be updated during the process based on buyer understanding developing and supplier influencing scope. PQQ would take place to short list suppliers. Supplier are then expected to submit final proposals.
Innovative partnership structure - often used for unique items which do not exist on market. Rather than asking supplier to bid against a spec they are to bid against capacity to research and development, pre agreed level of performance and maximum cost. There is no negotiation after final bid.
The only option whereby buyer may negotiated after final bid is competitive dialogue
Another option is for buyer to use a pre established framework agreement, whereby another buying organisation has completed the selection stage. Same as a preferred supplier list. Buyer would need to advise the tandem use of a framework in any OJEU advert. Using a pre existing framework is quicker as buyer only have to call off a mini competition.
Can you explain the Thomas Kilmann Conflict Model, how it is used and explain each conflict management style?
Model should be used following Force Field Analysis. Force Field Analysis will identify what conflict exists and the Conflict Model will identify how to mitigate them.
Make sure you can draw the model.
Avoiding - low concern for self and others - objective to delay
Competing - High concern for self and low for others, A stakeholders own self concern is above all others - objective to win a.k.a Zero Sum Game
Accommodating - low concern for self, but high for others. An element of self sacrifice - objective to yield
Collaborating - high concern for self and others. Example of expanding the pie - objective find win - win outcome
Compromise - occupies the middle of the quadrant. has elements of other styles and is general a position of reaching a middle ground of matters. it does not meet the needs of any one - objective find middle ground
Can you draw and explain merits of Mandelows Stakeholder Matrix (stakeholder mapping)?
The matrix is used to map a stakeholders power and interest in a project. Once mapped, the buyer can use it to decipher how best to communicate with that stakeholder
What is the Stakeholder Support Level Scale?
Sliding scale and numbered from 1 -5 which measure stakeholder commitment
- Resistance/ unaware
- Neutral
- Positive aware
- Collaborative
- Positive advocate
The term win-win is another description for collaborative or integrative approach to negotiation. What does integration mean?
Integrative/ collaborative/ win-win styles of negotiation are where both parties attempt to create something of more value to share i.e. make the pie bigger vs fight over the biggest piece of pie.
Integrative approach is consider the best approach as everyone wins.
The term win -lose is another description of disruptive approach to negotiation style. This is when parties are attempting to divide up something of value where one party member gets more than the other, or result is both party’s getting less. it assumes the pie size is fixed. This is also known as zero-sum game. It is also assumed that the resource or value being negotiated are fixed or a fixed sum of volumes etc.
Via an integrative/ win-win/ collaborative approach, there does need to be a 50:50 split of value. One part could walk away with less than the other but that party are still happy that they walk away with more than they thought they could
How would you describe a Principled Approach?
Principle Approach is the same as a win -win/ collaborative/ integrative approach but specific to to conflict management and dispute resolution.
There are 4 fundamentals of the Principled Approach:
People - separate people form the problem
Interest - Focus on interests not positions!
Options - Generate options for mutual benefit
Criteria - Use objective criteria e.g. independent/ applicable credible to both sides e.g. use of price index, science research, market research, industry quality standard.
Remember, the oppositions position during a negotiation is usually flexible i.e. we must make a 10% margin! Instead, the buyer should develop the dialogue to discuss what the other parties interest are i.e. make a sensible margin. Stating a position is often negatively received because it appears final, however, stating an interest is more malleable and seeks others buyin.
A key skill in negotiations is to creatively think of options or tradables that can be shared. The more the better. Teh idea is that with multple tradables/ options, if one fails, you may quickly move onto the next. You may even come back to the first later and also realise that the issue has gone away or TOP got what they wanted so item 1 is no longer a show stopper.
What is the definition of BATNA?
BATNA refers to a key skill negotiators must have which is to value preparing your walk away position. BATNA - Best Alternative to an Negotiated Agreement. The BATNA acts as a plan B contingency.
What and how should you use ZOPA?
ZOPA should be understood to understand if negotiation is a waste of time, and to set your BATNA position.
ZOPA - Zone of Potential Agreement
For example, buyer may have a preference to buy at £800 but pay no more than £1000 which is their BATNA. The supplier may have a preference to sell at £1200 but sell no lower than £860. Therefore, the ZOPA is £860 - £1000 and this should be the focus price of both parties. Both parties should in theory be able to achieve a deal with in this ZOPA zone.
The above will need to be supported with market research, price indices, supplier insights through close relationship, similar supplier relationship and so on.
Another advantage of this is that you then don’t insult the other party with your opening bid being a low ball attempt.
This can be applied to other variables such as contract length, service hours, SLAs etc.
What is the definition of MIL?
Must, Intend & Like criteria
Must achieve - fallback position, lowest/ highest price you will fall back to
Intend to achieve - realistic targets you expect to achieve
Like to achieve - Stretched target a nice to have or an amazing result
Why is setting your BATNA BEFORE negotiation so important?
Setting your BATNA before a negotiations is crucial so that you are able to walk away from a poor outcome. The affect is compounded if you can give the opposition the illusion that you have a BATNA, as the other party may not be so reckless/ offensive.
If the opposition know you have no BATNA you are in a weak position and other party know they can initiate a win -lose scenario.
How can you create your BATNA?
Consider amongst your self and steering group what alternative option exist to your organization if the fail to achieve the result you wanted form negotiations.
You must them rank these in order of what is best to worse. You should then work to improve the best option as much as possible so that you develop a strong BATNA position. This will enable confidence and ability to know the negotiation outcome wont be in your favour and you can walk away with lower riskier alternatives.
