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How to be better at negotiating contracts

Bidding for contracts can be challenging and take up a lot of staff and trustee time and energy. Even when you are selected as the preferred bidder you still have the hurdle of negotiating the contract and getting the best terms for your organisation. This ‘How-To’ provides a useful checklist for the negotiation process.

1

Prepare for the negotiations

  • Clarify the exact purpose of all meeting/discussions, ideally agreeing an agenda in advance
  • Find out exactly who will be there and what their role is so that you can gauge the limit of their authority
  • Research the relationship between your organisation and theirs in case there is anything which may affect the current negotiations, such as a previous project that went well or badly
  • Decide on a strong team of negotiators who know the bid (and your organisation) very well, particularly the financials
  • Meet with your team in advance to agree:
    • The  ideal outcome for your organisation
    • The key terms of the service that will be included in the contract.  Once you have done this prioritise them so you know which you have flexibility to negotiate on and which ones are deal-breakers
    • Agree what your bottom line is, at which point you will walk away from the contract
    • If there are particular areas of the contract that you feel will cause conflict, try and think of compromises and solutions in advance 
2

During negotiations

  • Listen carefully
  • Summarise at key points to reflect your understanding of what has been said
  • Be assertive but not aggressive. For example if you are offered some new benefit, bank it and don’t feel you have to give something extra in exchange if you’ve not been asked.
  • Be honest and open in the negotiation, but remember that if you offer too much information you might compromise your negotiating position.
  • Remember that you are likely to have an on-going relationship with the contracting organisation for the length of the contract and possibly for longer, so don’t alienate them!
  • Don’t feel forced to come to an agreement there and then, if the discussion is going too fast you can always come back to it at a later date
3

Take legal advice

  • Any contract is going to be binding, so it is vital to get professional legal advice.
  • You can of course obtain this from your usual solicitor, and ideally they should have experience of working with the voluntary sector, and of similar contracts
  • It may also be possible to secure pro-bono support to reduce the costs, so use your networks to bring that in.
  • NCVO offers a range of free or discounted legal resources via Law Works to our members, which you can look at if you have an NCVO member login.
4

Close the deal

  • The final stage is closing the deal
  • Please add your tips here!

Further information

There is advice about negotiations with commissioners from NCVO’s Public Service Delivery Network here.

 

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Page last edited May 03, 2017 History

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