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INTRODUCTION Armenda Daye, Procurement Analyst, Acquisition Career Manager, DOI Overview of the new “Interest-Based Negotiations” course Personal Background.

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Presentation on theme: "INTRODUCTION Armenda Daye, Procurement Analyst, Acquisition Career Manager, DOI Overview of the new “Interest-Based Negotiations” course Personal Background."— Presentation transcript:

1 INTRODUCTION Armenda Daye, Procurement Analyst, Acquisition Career Manager, DOI Overview of the new “Interest-Based Negotiations” course Personal Background Information

2 2007 & 2008 Contracting Competency Surveys Contracting personnel need improvement in negotiating skills 2-Day interactive IBN course developed to encourage employees to negotiate in a “fearless” manner

3 IBN Course Schedule and Registration 2010 Schedule Wednesday, March 24–Thursday, March 25 Tuesday, April 20–Wednesday, April 21 Wednesday, May 12–Thursday, May 13 Wednesday, August 11–Thursday, August 12 Registration –Federal Acquisition Institute Training Application System https://www.atrrs.army.mil/channels/faitas

4 Difference between my Position-Based Negotiation course with DoD and the new Interest-based Negotiation Concept - 40 hour course -Emphasis on WINNING -Two Groups – 50% students represented contractor, 50% Government -Worked on math-laden proposal for 4 days and conducted the negotiation on 5 th day -Negotiations were Emotional (apprehension, anger, tears)

5 Three Objectives 1.Distinguish between position-based and interest-based negotiation 2.Identify the interest-based negotiation process 3.Explain the elements of an interest-based approach to negotiating

6 Discussion of: Definition of Negotiation Types of Negotiation Methods The Interest-based Negotiation Process

7 What is Negotiation? Back-and-forth communication to reach an agreement A means of getting what you want from others An attempt to resolve differences

8 Why Do We Negotiate? Because we want or need: –Something others have –Someone to do something

9 When Do We First Learn to Negotiate?

10 What Do We Negotiate Over in Government Acquisition? Price Delivery Quality

11 Two Types Of Negotiation Position Based (The What) Interest Based (The Why)

12 Position-Based Negotiation Focuses on pre-determined solutions Attacks the opposing parties’ positions Produces unsatisfactory agreements

13 Interest-Based Negotiation (IBN) Focuses on all parties: –Individual needs –Organizational needs

14 Five Elements of IBN 1.Separate the people from the problem 2.Focus on interests, not positions 3.Create options for mutual gain 4.Define objective criteria 5.Develop your BATNA

15 1. Separate the People from the Problem People and problems get entangled by: –Emotions –Communications –Perceptions

16 2. Focus On Interests Positions –Involve a Predetermined solution –Require justification (defense) –End discussions Interests –Examine “Why” a solution is preferred –Require explanation (reason) –Start discussions

17 3. Options for Mutual Gain Recognize there can be > 1 option Expand the pie thru Brainstorming

18 4. Objective Criteria (Mutually Acceptable Yardsticks) “Others in the industry do…” “The last time this happened we…” “The standard contract says…” What is customary Precedent Law

19 5. BATNA Best Alternative to a Negotiated Agreement (Walk Away Position) –Consider what you will do if an agreement is NOT reached –Is Activated when Alternatives are OUTSIDE the negotiation –Must be real and concrete

20 Options vs. BATNA Options “Inside” the negotiation –Created with counterpart –Potential solution(s)/ brainstorming –BOTH you and counterpart receive benefit BATNA “Outside” the negotiation –Created alone –Fall back position if negotiation fails –ONLY impacts you/your organization

21 The IBN Process 1-Separate the people from the problem 2-Focus on interests not positions 3-Create options for mutual gain 4-Define objective criteria 5- Develop your BATNA

22 Wife “I want a vacation in Las Vegas” Husband “I want a vacation at the beach” Vacation Problem

23 Vacation Solution Wife “I want a vacation in Las Vegas” Husband “I want a vacation at the beach”

24 Understand your position and theirs Recognize your interests and theirs Explore options for mutual gain Use objective criteria Identify your BATNA and theirs IBN CONCEPTS SUMMARY

25 Government Example of IBN Process: Negotiation with Program Office Program Office wants a sole-source contract

26 1. UNDERSTAND YOUR POSITION AND THEIRS Your Position: Legally Sufficient Contract Their Position: Assured Quality Contractor

27 2. RECOGNIZE YOUR INTERESTS AND THEIRS Your Interests:Competition, Best Value Their Interests:Timely, Quality Service

28 3. EXPLORE OPTIONS FOR MUTUAL GAIN Use of a Government-Wide Acquisition Contract (GWAC) Use of an existing DOI Contract Use of Sole Source Contract w/proper justification (FAR Part 6)

29 4. USE OBJECTIVE CRITERIA (for Negotiation with Contractor) Rates in GWAC Contract(s) or existing DOI Contract(s) Consumer Price Index DCMA Forward Pricing Rates

30 5. IDENTIFY YOUR BATNA Target Price in Pre-Negotiation Memorandum Amount of the funded requisition Ceiling Price in Pre-Negotiation w/concessions on delivery and/or quality

31 QUESTIONS


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