26.1 Contract negotiation steps
26.1.3 Develop the negotiation strategy
Bring the completed risk analysis into the negotiation strategy. Document the final negotiation strategy using the Appendix A spreadsheet, Tab 1, Negotiation Strategy Worksheet. Documentation should include requirements in business, legal, technical/functional and price. Establish positions on each issue: best, likely and least acceptable. Below is a list of negotiation strategy areas to review:
- Determine final scope/functionality from RFP and selected proposal(s) and/or any "now vs. later" or phased elements.
- Resolve any internal or VITA-required platform/architecture standards or legacy dependency issues.
- Confirm maximum budget.
- Identify those elements of the RFP and selected proposal(s) on which you can afford some degree of negotiation flexibility and those on which you cannot.
- Define non-negotiable, primary "key," (proposed vs. target), secondary (proposed vs. target) and "walk-away" negotiation factors. Determine how granular you want to go. These factors should include but are not limited to:
- Price
- Scope
- Schedule
- Milestones/deliverables
- Performance measurement/service level agreements/remedies or incentives
- Software license
- Source code/escrow
- Business/functional
- Technical
- Functional/performance testing
- Final acceptance criteria
- Warranty period
- Warranty
- Training/documentation
- Maintenance and support
- Transition services
- Change process/administration
- Project management
- Key personnel, if any
- Reporting requirements
- Security/information technology resource management (VITA ITRM) policy requirements
- Invoicing/payment
- Payment withhold schedule, if any
- Terms and conditions