Procurement Perspectives: A professional approach may facilitate the settlement process

While a proper professional approach to negotiations may facilitate the settlement process, it is important to understand that it is not always possible to settle disputes through negotiation.

A window of opportunity for settlement exists only where there is some overlap between what each of the parties to the dispute considers to be an acceptable outcome.

Contrary to popular belief, it is not always desirable to attempt to negotiate an agreement. Where the minimum conditions of a party cannot be satisfied through negotiations, the delay involved in negotiation may simply protract the dispute.

If there is no area for a potential mutually agreeable solution, it may be preferable to proceed to a binding adjudicated resolution. As in all other aspects of purchasing, it is essential to balance cost against benefit when considering the offers that are put on the table.

Fundamental interest should not be sacrificed merely so that it is possible to say that an agreement has been made. The goal of negotiation is not simply to reach an agreement; it is to reach an agreement that satisfies as many of the parties’ mutual interests possible.

The more each party sees its interests as being satisfied, the more likely it will be to live up to the terms and spirit of the agreement that has been reached.

What is essential for negotiators to understand is that the manner in which negotiation is conducted should not be allowed to frustrate opportunities that exist for a mutually acceptable solution.

Generally speaking, the following techniques have been found to facilitate the negotiation process:

Anger must always be controlled. A person may be well within their rights to feel and express righteous indignation over what has happened or what has been said. Unfortunately, such behaviour is unlikely to lead to a successful conclusion of negotiations. Being in the right is one thing. Getting an agreement is another.

• Always speak in the first person singular, so as to force the speaker to take personal responsibility for the statements being made. Do not try to pass off responsibility to an unidentified collective.
• Reply directly to the question.
• Get to the point quickly.
• Do not use flowery or hyperbolic language.
• Avoid generalities. Deal with specific problems.
• Do not use accusatory language. For instance, avoid sentences beginning with the word “you,” as these often amount to an attempt to allocate blame to the other party.
• Do not use pejorative terms. Success in negotiation very often turns upon finding areas of mutual interest, not in allocating blame or making the other person look like a fool (or worse).
• Use clear, unmasked language.
• Be direct rather than indirect.
• Avoid non-verbal communication. If it is necessary to react to something which has been said, do so clearly.
• It is virtually impossible for the negotiation to proceed unless there is at least some common understanding as to the rules that will be followed during negotiations.

Rules serve both a normative function, in that they tell the parties how to behave, and a predictive function, in that they tell each party what they can expect from the others.

The rules should be such that all parties will perceive them to be in their collective interest. Negotiations should be focused on dealing with issues and the interests that underlie them, rather than on staking out positions.

A position is a statement, fixed posture or stance that may have nothing to do with a party’s real needs and wishes. An interest is a real need or requirement and does not necessarily relate to something tangible or monetary.

It can concern something substantive, procedural or psychological. An issue is a specific aspect of the dispute between the parties or the transaction that the parties intend to enter.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.