Posted on July 31, 2011 by Joanne Greene-Blose
This August will prove to be one of the most trying times for the economy of the U.S. and its citizens. We have a government that finds itself unable to negotiate within itself and to reach compromise. After all legislation is nothing more than a negotiation and a contract. Since this month is all about contracts and negotiating, I wanted to give our legislators (and yourself) some tools in recognizing the mistakes made in negotiating.
- Find creative and original alternative and ideas that can benefit both parties. Remember both parties need to win. There cannot be just a winner and a loser in a good negotiation and contract. Here is one for the legislators– don’t propose ridiculous or insulting alternatives– it just makes you look silly and your integrity can be compromised.
- Know who you are negotiating with. Check that person or person on the internet and social media sites. Remember it not all about you it’s about the both of you. Be aware of the vendor market area, what is their competition, who are their customers.
- Don’t be too aggressive. Always being on the attack (sound familiar) will only succeed in a lot of defensive mechanisms.
- It’s not all about price; remember there is more on the table than just money. Extended warranties, more service, etc.
- Don’t jump at the first offer—“you may be leaving money on the table”
- Leave the table with the vendor feeling good, no high “5s” until after a contract has been signed.
- Have a dictionary in the contract for terms that are not easily understood by all you read the contract.
- Have a third party review the contact , a lawyer may not be necessary, but if you need one use one
- Plan ahead don’t wait until the last minute to start negotiating. Be specific and direct in your contract and negotiation. Know what you are talking about and have notes when you negotiate, speak when you have something to say.
- Avoid redundancies in your contract and when an area is agreed upon go on to the next.
You can pass this on to your legislator. Maybe we can get this government back on track and your project.
Reply here with your comments or send them to firstname.lastname@example.org
Filed under: Al's Angle, Procurement Management | Tagged: Contract, Government Contracting, negotiation | Leave a Comment »
Posted on July 30, 2011 by Joanne Greene-Blose
Our podcast this month is from Ron Holohan’s PM411.org podcast series and features Joe Friedman, CFO of the consulting group Zehren-Friedman Associates. Joe talks about how to get agreement between two or more parties and of equal importance, how to build a relationship in the process. Joe talks about a four-step process in negotiating:
- Planning: most people either do not plan at all or plan insufficiently going into a negotiation
- Opening Ceremony: how do you approach a negotiation
- Discovery: understand what their priorities are as well as your own
- Agreement: come to terms not only for the immediate negotiation but keep in mind post-agreement scenarios as well
Here’s a link to the podcast.
Filed under: Podcast of the month, Procurement Management | Tagged: Joe Friedman, negotiation, Podcast, Procurement | Leave a Comment »
Posted on July 9, 2011 by Joanne Greene-Blose
Al Gubiotti, our VP at The Project Solver’s, has a long and varied history (over 30 years) of employment with companies ranging from automotive to insurance to computer and IT, including 13 years as a business owner – all before joining us at PSA. Along the way he’s had to deal with a contract or two. So it was quite interesting to hear his perspective on the purchasing and contracting process and the gotchas we should be thinking about on projects.
Al is also in the process of building a four-hour seminar on this topic and the overview of this is what he provided for us today. He touched on the following points in today’s presentation:
- The purchasing and procurement lifecycle: there are six basic steps
- How a contract relates to the purchasing function
- What are the consequences of not following the correct management processes
- The basics of an RFP and RFQ
- The creation of a favorable binding contract
- How to monitor and enforce rights and warranties
- How to effectively closeout a contract
This was a whole lot to cover but as an overview it was great and we heard some very salient points. For example, beware of contracts with the same party within the company that conflict with each other. A PM down the hall could have one set of arrangements with Vendor ABC and you have a different one and that could create trouble.
There was also quite a bit of debate on whether a PM should have signature authority on the contract. Some felt yes, others no (of course many of you realize that PMI says no – but this can also create a situation where we are “cut off at the knees” so to speak).
Another interesting discussion was whether you as a PM should ever act on a verbal PO #? Al provided an explanation as to why this is really not a good idea. Always have something in hand before beginning the procurement process.
A couple within today’s group also brought out the importance of having the PM’s role and authority level explicitly defined in the charter document; definitely a good idea!
We’ll reprise this topic in August (where we hope to hear from an attorney from their perspective – stay tuned!). In the meantime here is a link with a few pictures of the event as well as a 5 minute audio snippet of the discussion:
Click to hear a snippet from today’s Forum.
Click here to see more pictures.
See you soon!
Filed under: AM on PM Summaries, Procurement Management | Tagged: Contract, Procurement, Purchasing, Request for proposal, RFP, Strategic sourcing | Leave a Comment »
Posted on July 8, 2011 by Joanne Greene-Blose
Click the heading for event pictures. Click a picture to enlarge it, use browser back button to return.
Click to hear a snippet from today’s Forum.
Al Gubiotti providing an overview of contracts
An attention getting opening slide
Filed under: Events | Tagged: Gideon-Putnam, PMI Region 4 | 1 Comment »
Posted on July 7, 2011 by agubiotti
We all deal with Risk in all our projects. We have templates, graphs, spread sheets, etc trying as hard as we can to define the risks that our project will face. When I started this article I looked back at all the projects that I have been involved with and remembered how diligently we tried to define the risks to the project. We sat down with our teams and brainstormed all the ills that could befall the project. We discussed the resources involved, hardware, software and most importantly the people. We dug out the risk template of the day and filled it by assigning the risks a “weight” from “will happen” to “not happening at all”. We added up the scores and then deter-mined how the total compared to other projects of similar size and magnitude. From there we determined if the project should proceed and if the risks were high how to mitigate them so that the project can go forward. Sound like what you do every day on your projects? We also followed up on the risks on a timely basis to make sure the risk was being handled and we updated new and closed risks.
Basic project management, correct?
Well it seems with all the talent and all the articles and processes on risk, that we still can have a person get on a plane with explosives as was the case this past week. If the airlines had gone back to the basics of risk management:
- Risk Identification
- Risks Quantification
- Risk Response
- Risk Monitoring and Control
Then perhaps the guy with the explosives would never have gotten on the plane. There may have been a control in place to prevent this. If we have the risk process in place and risk communications working among the various members of the team, we can manage risks in a timely, level-headed manner and with minimal impact to those served by the project.
Risk communication is the key in risk mitigation; we need to be constantly communicating via all the “tools” available to us in these challenging times. Even a simple “tweet” can bring to light a risk or solution. Imagine if someone had tweeted at the airport, alert-ing the authorities of a man entering an international flight with no luggage!
Do not wait for the weekly risk meeting. Develop a risk communication method and encourage its use.
Filed under: Al's Angle, Risk Management | Tagged: Risk Analysis, Risk Management, Risk management plan | Leave a Comment »