Negotiation In The Purchasing Process

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Negotiation in the Purchasing Process In the procurement process the buyer is the project manager. The project manager buys services from the contracting company. When building a contract some project managers follow “CCOLA” which is an acronym for: · Capacity: The seller and buyer being able to make sound decisions. · Consideration: The buyer considers what the seller is offering. · Offer: The seller makes an offer. · Legal Purpose: Jurisdiction and legal bondage. · Acceptance: The time limit that the buyer has to make an agreement. To further break that down. There are usually five stages of contract negotiation. First is protocol of the buyer and seller getting to know each other. Next is probing where the buyer and seller recognize their issues of concern. The next stage is scratch bargaining where negotiation occurs and compromises are made. Closure is next where everything is summarized and final decisions are made. The last stage is the agreement where both parties have a mutual understanding of the agreements. Negotiation is a process in itself which can be broken down into five steps: 1.) Prepare: in this step you have to analyze the environment which includes internal and external factors. Internal would include project needs and scheduling. External would be customers and the suppliers need for business. Account details need to be looked over such as the supplier’s performance which includes price, delivery and quality. You have to organize and prioritize objectives; list all clauses that need to be negotiated. Identifying the importance of each clause to the supplier is necessary. 2.) Explore and Exchange: communication and listening skills are needed. 3.) Negotiate: Offers and proposals are made. 4.) Agree and Close: An offer is accepted and an agreement has been reached which will be documented. 5.) Post Negotiation: The negotiator

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