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Competitive Negotiation Workshop

Competitive Negotiation Workshop. DFW NIGP Professional Development Day October 10 , 2013. John O. Adler, CPPO Dallas Area Rapid Transit Vice President, Procurement. Competitive Proposals Process. After receiving proposals Scan and address minor informalities Conduct initial evaluation

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Competitive Negotiation Workshop

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  1. Competitive Negotiation Workshop DFW NIGP Professional Development Day October 10, 2013 John O. Adler, CPPO Dallas Area Rapid Transit Vice President, Procurement

  2. Competitive Proposals Process • After receiving proposals • Scan and address minor informalities • Conduct initial evaluation • Establish Competitive Range • Request Clarifications • Conduct discussions • Request Final Proposal Revisions • Continue evaluation • Recommend award

  3. Which one is best value? • 2013 Cadillac Escalade • $63,800 • 520 Technical Points • 018 Price Points • 538 Total Points

  4. Which one is best value? • 2013 Ford F150 • $32,500 • 480 Technical Points • 036 Price Points • 536 Total Points

  5. Which one is best value? • 1953 Chevrolet Pickup “runs” • $3,000 • 150 Technical Points • 400 Price Points • 550 Total Points

  6. RFP Evaluation

  7. Discussions Defined • GCRB – Exchanges between the government and an offeror in the competitive proposal process undertaken with the intent of allowing the offeror to revise its proposal. Discussions include bargaining.

  8. Discussions Defined • NIGP – An oral or written exchange of information; other than simple clarifications, for the purpose of obtaining information essential for determining acceptability of a proposal, or to provide an offeror the opportunity to revise its proposal.

  9. Bargaining • GCRB – Negotiations with an offeror including persuasion, alteration of assumptions and positions, give-and-take, that apply to price, schedule, technical requirements, type of contract or other terms and conditions.

  10. Negotiation • Black’s Law – To communicate with another party for the purpose of reaching an understanding

  11. Negotiation – Two Strategies Which type applies to government contracts? Distributive – Win/Lose, Zero Sum, positional, hard bargaining, biggest piece of the pie Integrative – Win/Win, Non-Zero Sum, principled, expand the pie

  12. Discretion • Black’s Law – A public official’s or agency’s power or right to act in certain circumstances according to personal judgment and conscience.

  13. ABA Model Procurement Code …discussions may be conducted with responsible offerors who submit proposals determined to be reasonably susceptible for award for the purpose of clarification to assure full understanding of and responsiveness to the solicitation requirements.

  14. Missed Connection

  15. RFP Evaluation

  16. RFP Evaluation Continued

  17. Source Selection Process Develop Evaluation Criteria Issue Solicitation Start Acquisition Planning Proposals Submitted Initial Evaluation Competitive Range Finish Award Source Selection Final Proposals Revisions Discussions

  18. Negotiate or Reject? • Price is too high • Technical proposal is unclear • Proposal did not include org chart • Proposal does not meet required schedule • Not enough information on price • Several math errors on price sheet • Unclear that technical proposal will work • Proposing red tractor when specifications require green

  19. The Perfect Proposal If you have competing offers that meet all of the solicitation requirements… Discussions are not required.

  20. Purpose of Discussions • Maximize competition • Produce an acceptable FPR • Resolution of uncertainties • Disclosure of government requirements • Correction of mistakes • Disclosure of deficiencies • Come to an agreement

  21. Competitive Range • Reasonably susceptible of being selected for award • When in doubt, leave in • Classification System • Acceptable • Potentially acceptable • Unacceptable • May be updated at any time • Notify immediately

  22. Disclosure of Gov Requirements • Government requirement not clear • Additional information discovered • Change in government requirements • Interpretation of requirements M UST BE DISCLOSED TO ALL OFFERORS IN COMPETITIVE RANGE

  23. Correction of Mistakes • Disclose suspected mistakes • Unable to determine compliance with requirements • Unclear or ambiguous

  24. Disclosure of Deficiencies • Disclose proposal deficiencies, and… • Permit correction through revision • A deficiency is a failure to meet RFP requirements • A weakness is a comparative difference among proposals WE NEGOTIATE DEFICIENCIES… WE CANNOT NEGOTIATE COMPARATIVE DIFFERENCES IN PROPOSALS

  25. Important Stuff • Discussions must be meaningful • Resolve uncertainties • Correct mistakes • Address deficiencies • Fair does not mean identical – Negotiate what needs to be negotiated • Be specific in the corrections required • Never disclose from one offer to another • No leveling or auctioning

  26. Discussions • Broad discretion in determining procedure • Face to face oral discussions • Written notification and request for FPR • Sufficient communication to ensure that offerors are • Fairly and efficiently informed • Gives opportunity to revise the proposal

  27. Discussions – Sure Fire Process • Clarify – Identify what is not clear and ask for clarification • May communicate in person, email or in writing • Seek mutual understanding • Follow up in writing • Clarification does not change proposal

  28. Discussions – Sure Fire Process 2. Identify deficiencies • Deviations from requirements • Information omitted 3. Identify other negotiation points • Price • Clarify or update government requirements

  29. Discussions – Sure Fire Process 4. Develop objectives • Identify negotiation objectives • Establish negotiation position • Desirable • Acceptable • Unacceptable

  30. Discussions – Sure Fire Process 5. Project supplier’s position • What is supplier’s position on each issue? • What is your leverage with supplier? • Other intel • Website and Google • Other contracts • Other governments

  31. Discussions – Sure Fire Process 6. Prepare negotiation plan • Identify and prioritize issues • No compromise • Some compromise possible • Not essential • Prepare negotiation strategy • Support positions with logic and information • Be honest and transparent • Be prepared for supplier’s tactics • Seek win/win outcomes

  32. Final Proposal RevisionsBest and Final Offers (BAFO) • Requested in writing • Notification that discussions are closed • Opportunity to submit proposal revisions • Common cutoff date and time • Proposal unchanged if no BAFO submitted • Re-evaluate • Same discretion as original evaluation

  33. True or False • Negotiations are not allowed in government procurement. • False • Evaluators are not allowed to change their scores after BAFO. • False • All proposers must be asked the same questions during discussions. • False • If a proposal is not responsive to all solicitation requirements, it must be rejected. • False • Larry Bird played for the Boston Celtics. • True • If discussions are not required, send BAFO to each proposer. • False • If CS negotiates with one proposer, CS must negotiate with all proposers. • False • Contracts must be awarded to the proposer with the highest score. • False • When negotiating, always tell the proposer where it stands compared to other proposers. • False • Omaha is a town in East Texas. • True

  34. The End

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