Pitching and

Negotiation Skills
Lecture 4
Instructor: Amna Zahoor
Learning Objectives

• Procurement and types of procurement methods

• The contractual process for both personal and classified
information.
• The key elements of Master agreements and statements of work.
• Contract Law.
• Amending contracts and breaches of terms and conditions.
What Is Procurement

• The act of obtaining or buying goods and services.

• The process includes preparation and processing of a demand as
well as the end receipt and approval of payment
• The process of procurement is often part of a company's strategy
because the ability to purchase certain materials will determine if
operations will continue
• The procuring department is responsible for acquiring goods and
services for a business
• A business will not be able to survive if it's price of procurement is
more than the profit it makes on selling the actual product.
What is Procurement

Procurement often involves

(1) purchase planning,
(2) standards determination,
(3) specifications development,
(4) supplier research and selection,
(5) value analysis,
(6) financing,
(7) price negotiation,
(8) making the purchase,
(9) supply contract administration,
(10) inventory control and stores, and
(11) disposals and other related functions.
Types of Procurement Methods

1. Open tendering
2. Restricted tendering
3. Request for proposal
4. Two-stage tendering
5. Request for quotations
6. Single-source procurement
1: Open Tendering

• Open tendering is shorthand for competitive bidding.

• It allows companies to bid on goods in an open competition or
open solicitation manner.
• Open tendering requirements call for the company to:
o Advertise locally
o Have unbiased and coherent technical specifications
o Have objective evaluation measures
o Be open to all qualified bidders
o Be granted to the least cost provider sans contract negotiations
Open Tendering

• the open tendering method of procurement encourages effective

competition to obtain goods with an emphasis on the value for
money.
• However, considering this is a procedures based method a lot of
procurement experts feel that this method is not very suitable for
large or complex acquisitions due to the intense focus on the
output process instead of stringent obedience to standards
2: Restricted Tendering

 Restricted tendering only places a limit on the amount of request

for tenders that can be sent by a supplier or service provider.
 Because of this selective process, restricted tendering is also
sometimes referred to as selective tendering.
 Like open tendering, restricted tendering is considered a
competitive procurement method, however, the competition is
limited to agencies that are invited by the procuring team
Restricted Tendering

 The procuring entity should establish a set of guidelines to use

when selecting the suppliers and service providers that will be on
the invitation list.
 Randomized selections will not bode well for procuring.
 This method is selective to find the best-suited and most qualified
agencies to procure goods and services from.
 It’s also employed as a way for the procuring team to save time
and money during the selection process.
3: Request for Proposals (RFP)

• In the procurement world, a RFP is a method used when suppliers

or service providers are proposing their good or service to a
procurement team for review.
• If you’re a supplier, understanding the in’s and out’s of quality
service management is key to winning your bid
• Procurement teams are often on the hunt for the best valued,
most marketable items to bring into circulation
• A client may feel they have all of the qualifications to fit the
needs of fulfilling a specific requirement of a procurement team –
but they have to prove it
Request for Proposals (RFP)

• The agencies writing the RFP’s should submit a two-envelope

proposal to the procurement manager.
• The two-envelope process allows the procurers’ to review the
proposal through and through without knowing the financial
component.
• The financial proposal is sealed in the second envelope and should
only be opened after the content of the first-envelope proposal is
approved or rejected.
• This eliminates any persuasion by cost and allows an objective
lens to look through when analyzing a good fit
4: Two Stage Tendering

• There are two procedures that are used under the two stage
tendering method.
• Each one of the procedures has a two stage process
• The first procedure is very similar to the RFP method as discussed
above.
• The procurement team receives a proposal with two envelopes –
one with the proposal itself and one with the associated financial
information.
• The difference is the bidder is required to submit a technical
proposal that highlights their solutions to fulfilling the
requirements as specified by the procuring department
Two Stage Tendering

• The second procedure is much like the above, however, instead of

the bidder submitting a fully-completed technical proposal, a
partial proposal is submitted.
• The methodology and technical specifications will be included but
not to the fullest extent.
• This allows room for even more customization and discussion
5: Request for Quotations

• This procurement method is used for small-valued goods or services.

• Request for quotation is by far the least complex procurement method
available.
• If you have the option, use this method to ensure a fast procurement
process and not a lot of paperwork.
• There is no formal proposal drafted from either party in this method.
• Essentially, the procurement entity selects a minimum of three suppliers
or service providers that they wish to get quotes from.
• A comparison of quotes is analyzed and the best selection determined by
requirement compliance is chosen
6: Single-Source

• Single source procurement is a non-competitive method that

should only be used under specific circumstances.
• Single source procurement occurs when the procuring entity
intends to acquire goods or services from a sole provider.
• This method should undergo a strict approval process from
management before being used
Single-Source

The circumstances which call for this method are:

1) Emergencies
2) If only one supplier is available and qualified to fulfill the
requirements
3) If the advantages of using a certain supplier are abundantly clear
4) If the procurer requires a certain product or service that is only
available from one supplier
5) For the continuation of work that cannot be reproduced by
another supplier
Contracts

• An agreement between two or more parties that creates obligations that

are enforceable or otherwise recognized by law
• A business arrangement for the supply of goods or services at a fixed
price
• A document describing the terms of a contract
• Examples of contracts include but are not limited to any document that
has terms of and conditions, leases, letters of agreement, memoranda of
understanding, letters of intent and interagency or intrasystem
agreements
• Contracting agencies can be private industry, government agencies and
non-profit organizations
The Contractual Process
Step 1: Selecting a Contract

• Which Contract Should I Use?

• Often, the sponsor chooses the agreement type negating your opportunity
to choose an agreement type
• it is important to select the agreement type best suited for your
transaction
• Contracting services or Procurement must review and approve the
contract before it can be signed.
Step 2: Collecting the Necessary Information

• It is important not to engage in any work without a formal,

written agreement signed by a person authorized to sign
• What documents are needed to complete the contracting package?
• Budget
• Payment Schedule
• Statement/Scope of work
• Word version of the contract with all relevant exhibits and attachments
• Additional supporting documents
Step 3: Choosing a Negotiator

• Who negotiates an agreement?

• No person who is not an authorized signatory may enter into binding
contract negotiations, or approve or execute a contact on behalf of
contracting organisation/individual
• What is to be negotiated?
• Agreements to pay an individual, corporation, or other entity
• Agreement to receive payment from a sponsor, individual, corporation, or
other entity
• Memoranda of Understanding (MOU)
• Non-Disclosure agreements
• Affiliation agreements
• Subcontracts: incoming and outgoing
Step 4: The Contract Review Process

• Who should I contact to get an agreement reviewed?

• What should be reviewed?
• How it should be reviewed?
• Agreement processing time?
• International treaties?
Step 5: Contract Signing

• The contracting party first send a copy of the agreement to the

principal investigator for review and approval of terms,
particularly budget, scope of work, effective dates, and reporting
requirements.
• When the terms and conditions are settles and other non-standard
terms are approved, contract is signed
Contractual Process for Personal information

• Planning for contract

• Contract Negotiation
• Signing of contract (legal?)
• Evaluation
• Contract closure
The key elements of Master agreements

• Parties to the agreement

• Terms of agreement
• Consent (mutual) of parties to the agreement
• Enforceability (legal, valid, and binding obligation)
• Compensation and payments for compensation (e.g. adjustments)
• Authority and Capacity of parties to agreement
• Conflicts adjustments
Key elements of statements of work

As part of any solid contract or request for proposal, a statement of work

(SOW) details actual work activities, project deliverables and defines the
estimated timeline of any development from start to finish
Key elements of Statement of Work
1. Purpose and scope 6. Acceptance Standards
2. Work Description 7. Special Requirements
8. Contract Terms
3. Period of Performance
9. Payment Schedule
4. Deliverables Schedule
5. Applicable Standards
Contract Law

• any agreement that is enforceable in a court of law is a contract.

• Contract Law attempts to adhere to a simple principle: that you
should only be bound when you have given your informed and true
consent to a contract
• Because of its complexity, it’s usually dealt with by qualified
solicitors, specialist lawyers (in every law you can possibly
imagine), or by legal executives.
Areas under Contract Law

The main areas under Contract Law include:

1) Formation of contract (offer, acceptance, consideration,
intention)
2) Capacity to form contract
3) Contents (terms, exclusions)
4) Vitiating factors (misrepresentation, mistake, duress, illegality,
etc.)
5) Discharge (performance agreement, breach, frustration); and
6) Remedies (damages, performance, injunction, etc).
Misrepresentation and Breach of Contract

• How much care and attention must we pay during a contract

negotiation?
• What is at risk if we are naïve during the negotiations and
therefore we are persuaded to spend a lot of money for something
which is not worth it?
• Can we claim for breach of contract?
Misrepresentation and Breach of Contract

• A misrepresentation is an untrue statement of fact made by Party

A to party B which induces Party B to enter the contract causing
Party B a loss.
• Fraudulent misrepresentation
• Negligent misrepresentation
• Innocent misrepresentation
Writing terms and conditions into your
contract

• For many entrepreneurs and business owners, creating the terms

and conditions of their trade is the least of their priorities.
• Instead, they concentrate on marketing products and finding
customers
• Neglecting such a task could have a negative impact on your
cashflow through delayed payments
• Why are terms and conditions important?
• Include T&Cs in your invoice
• Dangers of copying T&Cs from other companies
Writing terms and conditions into your
contract

Steps in writing terms and conditions

1. Clearly specify the products or services that you provide
2. Set the price and payment terms for such products or services -
when you expect payment
3. Agree how and when a sale or service is delivered
4. State any guarantees or warranties you may offer
5. Specify the customer’s obligation
6. Include cancellation options and penalties, eg what either party
should do or expect if there’s no delivery or non payment.