NEGOTIATING? DON’T TIE YOURSELF IN KNOTS ON WHAT THE OTHER SIDE MIGHT ACCEPT
A series of former Secretaries of State testified before Congress last week and although the topic was US foreign relations, there was one important tip for government contractors. Unless you’re a bona fide mind reader, never try to figure out what the other side can live with in a negotiation. Know what your company’s bottom line position is and stick to it. This message is particularly important in today’s government contracting world where LPTA is pervasive and agencies like GSA don’t seem to “negotiate” as much as “demand”. While such tactics may produce short term results, it’s a long term strategy that is doomed to fail. Most companies simply won’t negotiate deals they know will put them out of business. Smart firms value their brand and know their value proposition. Such companies know what prices and terms they can live with and won’t give away years of building a brand and reputation just to meet an artificial price point. If certain agencies demand pricing that goes below what they feel is acceptable, they will walk away and take their chances on the open market. This has already started happening and will likely accelerate as more and more firms understand that agencies will buy their products because of the strong brand presence, even though those products may not be available on a “preferred” buying vehicle. Don’t get pressured into a deal that doesn’t make sense for your company. If the other side doesn’t like it, well sometimes it just not possible to get an agreement.