GSA Expo 2009

1. GSA Expo 2009 Negotiating with Confidence to meet Agency Needs Behn Kelly US Air Force

2. What Is Interest-Based Negotiating?

3. The Five Principles • Separate the people from the problem • Focus on interests not positions • Create options for mutual gain • Develop your BATNA • Define objective criteria

4. Separating People & Problem • Perceptions • Place yourself in their shoes • Do not interpret their motives by your fears • Discuss the perceptions • Emotions • Recognize they exist • Acknowledge them and allow for venting • Do not react to them • Communication • Listen & avoid misunderstandings

5. Separating People & Problem • Be patient • Tolerate the need for the other side to “vent” and then engage • Leadership • Be prepared to build or maintain a relationship/trust if necessary

6. Separate the People & Problem • Stand in their shoes: why did this great dog eat the new couch? • Analyze the Emotions Why am I so angry? Are my feelings hurt? Does this mean the dog doesn’t love me? • Try on their perspective What was the dog thinking? Maybe there was a legitimate reason: a burglar? forgot to feed? Was scared? Protecting?

7. Separate the people from the problem Focus on interests not positions

8. Focus on Interests Positions are pre-determined OUTCOMES Interests are your NEEDS TO BE SATISFIED

9. Focus on Interests • Look for interests behind positions • Prioritize interests • Consider other side’s interests • Critical to preparation before the negotiation!

10. Positions Solutions to problems Specific & definite Basis for argument Require justification End discussion Interests Why a particular solution is preferred Reasons underlying positions Require explanation not justification Start discussion Focus on Interests

11. Positions vs. Interests Think of them as parts of an iceberg… 10% Positions 90 % Interests I n t e g r i t y - S e r v i c e - E x c e l l e n c e 11

12. Interests • Examining the prioritization of interests highlights areas of mutual gain • Exchange a low priority for you to meet a high priority for your counterpart

13. Positions v. Interests Owner: •Interest No. 1: Stop eating the furniture. Bad for dog’s health; bad for living room and pocketbook. •Interest No. 2: Find a way to make the dog behave •Interest No. 3: Do not harm the loving relationship. Pooch’s Interests: • Interest No. 1: Food! Bones! • Interest No. 2: Dog-joy! Fun, fun, fun! • Interest No. 3: Protecting and keeping my human buddy happy!!

14. Separate the people from the problem Create options for mutual gain Focus on interests not positions

15. Options for Mutual Gain • There can be more than 1 option • Look for ways to work together • Find value in differences • Common sources of differences: • Risk • Timing • Perceptions • Marginal value of the same item

16. Options for Mutual Gain • Brainstorm possible solutions together • Consider options for joint benefit • Create what neither of you could do on your own • Look for possible trade-offs that can turn potential into reality

17. Options for Mutual Gain Positions Options for Mutual Gain Interests 17

18. Best Option for Mutual Gain: Training!!

19. Separate the people from the problem Create options for mutual gain Develop your BATNA Focus on interests not positions

20. Finding Your BATNA

21. BATNA Best Alternative to a Negotiated Agreement • What you will do if an agreement is NOT reached (e.g., what will happen in litigation, what the GAO or BCA will likely hold) • Alternatives are OUTSIDE the ADR negotiation • Must be “real” and concrete • Must be achievable

22. BATNA BATNA Positions Options for Mutual Gain Their Interests Your Interests 22

23. Developing BATNA • Developing BATNA is creating alternatives BEFORE your negotiation • Questions that assist in developing BATNA: “If we don’t agree, I can always…..” “What will I do if this negotiation fails?” “What alternatives do I have?” “What alternatives can I create?” “How can I weaken the BATNA of my counterpart(s)?”

24. What is the difference between Options and BATNA? ? • Options • “Inside” the negotiation • Potential solution(s) • Created with counterpart • BOTH you and counterpart receive benefit • Brainstorming session • BATNA • “Outside” the negotiation • Fall back position if negotiation fails • Only requires you

25. Identify and Strengthen BATNA • Know your BATNA • Focus on what you want to achieve and the different ways to accomplish this • Strengthen your BATNA • Construct your BATNA to be more achievable, probable, or satisfying more of your interests • Improves your confidence during the negotiation • Consider what the other side’s BATNA is • Make their BATNA less attractive to them

26. BATNA BATNA Inside the Negotiation your aspiration point your reservation point Any option within this continuum should be agreeable

27. Separate the people from the problem Create options for mutual gain Developing your BATNA Focus on interests not positions Define objective criteria

28. Objective Criteria • “Other agencies have….” (What is customary) • “The last time this happened we….” (Precedent) • “The standard contract says…” (Law) • “What remedies are available in the event of a sustain?”

29. Conclusion Understanding Interest Based Negotiation • Understanding the 5 principles • Separate the people from the problem • Focus on interests not positions • Create options for mutual gain • Develop your BATNA • Define objective criteria

30. Review: What is IBN? • Separate the people from the problem (“you’re cute but you ate the chair”) • Focus on interests not positions (you want a good dog and I want to be forgiven.) • Create options for mutual gain (you lecture, I’ll listen and then we’ll have a bone) • Identify your BATNA (There’s no guarantee my behavior will ever change—but a bone might! What do you have to lose?) • Objective criteria = Vet

31. IBN Tricks & Tips

32. Successfully Negotiating Some Acquisition Hot Spots….. • Helping your Teams Document the Record • Organizational Conflicts of Interest • Conducting discussions with offeror(s) • The Debriefing

33. Team Evaluation & Documentation:It Doesn’t Have To Be A Migraine!

34. The Administrative Record • Use straight-forward terms • Describe the evaluation results reasonably and clearly • Don’t try to use a complicated mix of evaluation methods, colors and schemes • Ask an outside “devil’s advocate” to review the source selection decision and underlying basis.

35. Discussions, including OCI reviews

36. Discussions: Advise of specific weaknesses • Contracting agency engaged in meaningful discussions where the agency advised protester of specific weaknesses regarding its technical proposal; the agency was not required to also afford the protester an opportunity to cure proposal defects first introduced either in response to discussions or in a post-discussion proposal revision. • Honeywell Technology Solutions, Inc., B-400771 and B-400771.2, Jan. 27, 2009, 2009-1 CPD ___, 2009 WL 564602.

37. Example of Unreasonable Discussions • In a procurement covered by the Trade Agreements Act (TAA), protest of an award to a vendor whose quotation identified products that were not TAA-compliant was sustained, since the agency failed to follow required evaluation procedures for TAA procurements, improperly failed to ascertain whether the products identified by the protester were TAA-compliant, and did not conduct meaningful discussions with the protester even though the agency regarded the protester's quoted price as unreasonably high. Tiger Truck, LLC, B-400685, January 14, 2009, 2009 CPD ¶ 19.

38. Definition of an OCI An Organizational Conflict of Interest (OCI): “means that because of other activities or relationships with other persons, a person is unable or potentially unable to render impartial assistance or advice to the Government, or the person’s objectivity in performing the contract work is or might be otherwise impaired, or a person has an unfair competitive advantage.” See Federal Acquisition Regulation (“FAR”) § 2.101.

39. OCIs Are Becoming Increasingly Problematic • Notable increase in industry consolidation and mergers—which means fewer providers and suppliers; • The Government is procuring more and more services from contractors; • The Government is increasingly relying on contractors and their technical expertise for assistance in decision-making; • The DOD is increasingly using contractors to serve as private Lead Systems Integrators, responsible for executing large, complex, defense-related acquisition programs (e.g., the Army’s Future Combat System and the U.S. Coast Guard’s Deepwater Program.) See Defense Acquisition: Use of [LSIs]—Background, Oversight Issues, and Options for Congress, CRSReport No. RS22631 dated August 20, 2008

40. OCI Risk OCIs are more likely to occur in the following types of contracts: • Management support services • Consultant or other professional services • Contractor performance of, or assistance in, technical evaluations; and • Systems engineering and technical direction work performed by a contractor that does not have overall contractual responsibility for development or production.

41. Organizational Conflict of Interest Summary of the three general OCI Categories: (1)Impaired Objectivity (Most Difficult to Mitigate) (Contractor’s evaluation of own work or setting the ground rules of a procurement, See FAR § 9.505.1 and .3) (2)Biased Ground Rules (Writing Statement of Work or performing systems engineering and technical direction effort, see FAR § 9.505.1 & .2) (3) Unequal Access to Information (Access to nonpublic information in performance of a government contract, see FAR § 9.505-4)

42. Why worry about OCIs? Potential Harm Resulting from an undisclosed or unmitigated OCI: Could likely result in a procurement decision that is influenced by factors other than competition and best value. Reasons for pursuing OCI disclosure and mitigation: • Contractors want to make sure they can compete for future work and recoup their initial competition investment; • The Government wants to be sure that potential OCI concerns do not unnecessarily discourage the private sector from contracting with and contributing to the government’s future work and needs.

43. The Contracting Officer has the most vital role in assessing OCIs • Should be part of the market research phase; • The responsibility for determining whether an actual or apparent OCI exists or will arise, and to what extent a firm should be excluded from the competition, begins with the contracting officer who is required to: • Identify and evaluate potential OCIs as early in the acquisition process as possible; • Avoid, neutralize, or mitigate significant potential OCIS before award. See FAR 9.504.

44. Required Contracting Officer OCI Analysis During the analysis of potential OCIs, the Contracting Officer must obtain the advice of counsel and the assistance of appropriate technical specialists in evaluating potential OCIs and developing any necessary solicitation provisions and contract clauses. See FAR § 9.504(b).

45. Required Contracting Officer OCI Research • Goal: Obtain unbiased advice • The FAR directs the contracting officer to “first seek information on a potential OCI from within the government.” • Next, the FAR directs the use of “Non-Government sources” defined as: • Publications • Commercial services (e.g., credit rating services) • Trade & Finance Journals • Business Directories & Registries

46. Required Contracting Officer Written Analysis of OCI(s) • If identified, before issuing the solicitation, the Contracting Officer must provide a written analysis discussing the OCI to the Head of the Contracting Activity (HCA) before issuing the solicit: - Why the OCI is significant - A recommended course of action for avoiding, neutralizing, or mitigating the OCI - A draft solicitation provision - A proposed contract clause (if appropriate) See FAR 9.506(b)(1)

47. Suggestions for a Contractor’s OCI Mitigation Plan Other Features of an effective mitigation plan: • Separate physical locations • Separate work forces • Separate management • Separate computer systems • Representation that there will be no “cross-talk” or information shared between two affiliates in connection with future work.

48. Suggested OCI Mitigation Efforts For the Contracting Agency • Review and investigate for potential OCIs early; • Conduct a market research effort; • Prepare a diagram of all participants; • Solicit OCI Mitigation Plans from each offeror; • Analyze and review all information against FAR 9.505 criteria and relevant case precedent; • Draft an agency mitigation plan that resolves potential OCIs; • Post the agency mitigation plan on the web so all participants are aware and involved (pass-word protect); • Require period reviews and updates because the veracity of an OCI certification can change as the contractor gets additional work; • Include the impact of an OCI as an evaluation factor; • Document, document, document.

49. Successful OCI Mitigation RequiresContractor-Agency Collaboration • The Government and the Private Sector Must actively collaborate to identify and mitigate potential and actual OCI’s as early as possible in the acquisition process.

50. Agency OCI Checklist • Identify potential for OCI issues during the Market Research phase of the acquisition • Issue a “Memorandum for Potential Offerors” of “OCI Findings.” • Explain the OCI finding • Include an OCI clause in the solicitation requiring offerors to address the OCI concern • Add OCI Mitigation Plan Acceptability Critieria to the Solicitation • State and evaluate the potential for OCI as part of the best value analysis See AF XR-SIMAF Cabilities Integration Services dated 9/25/2005.