INTRODUCTION

• Armenda Daye, Procurement Analyst, Acquisition Career Manager, DOI

• Overview of the new “Interest-Based Negotiations” course

• Personal Background Information

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

IBN Course Schedule and Registration2010 ScheduleWednesday, March 24 – Thursday, March 25

Tuesday, April 20 – Wednesday, April 21Wednesday, 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

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 5th day-Negotiations were Emotional (apprehension, anger, tears)

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

Discussion of:

• Definition of Negotiation

• Types of Negotiation Methods

• The Interest-based Negotiation Process

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

Why Do We Negotiate?

Because we want or need:

– Something others have

– Someone to do something

When Do We First Learn to Negotiate?

What Do We Negotiate Over in Government Acquisition?

• Price

• Delivery

• Quality

Two Types Of Negotiation

• Position Based (The What)

• Interest Based (The Why)

Position-Based Negotiation

• Focuses on pre-determined solutions

• Attacks the opposing parties’ positions

• Produces unsatisfactory agreements

Interest-Based Negotiation (IBN)

Focuses on all parties:

– Individual needs

– Organizational needs

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

1. Separate the People from the ProblemPeople and problems get entangled by:

– Emotions

– Communications

– Perceptions

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

3. Options for Mutual Gain

• Recognize there can be > 1 option

• Expand the pie thru Brainstorming

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

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

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

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

Wife“I want a vacation in Las Vegas”

Husband“I want a vacation at the beach”

Vacation Problem

Vacation SolutionWife

“I want a vacation in Las Vegas”Husband

“I want a vacation at the beach”

• 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

Government Example of IBN Process: Negotiation with Program Office

Program Office wants a sole-source contract

1. UNDERSTAND YOUR POSITION AND THEIRS

Your Position: Legally Sufficient Contract

Their Position: Assured Quality Contractor

2. RECOGNIZE YOUR INTERESTS AND THEIRS

• Your Interests: Competition, Best Value

• Their Interests:Timely, Quality Service

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)

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

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

QUESTIONS