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.Some people like to show others howsmart they are, how large a role they may have played in preparation of theRFP.Others may simply like to "grandstand." Any of these actions canundermine the objectives of the negotiation.This point is particularlytroublesome for vice presidents who may be present and feel compelled tosay something important even if their remarks may weaken the negotiation.The overall negotiating strategy for the team is an important issue tosettle before starting.Such strategies may incorporate a "win-win" approach,to allow both sides to benefit from the agreement.The other extreme of thisapproach is one in which we "take no prisoners", we want to extract everyconcession from the other side.Fortunately, most companies recognize thatboth the buyer and seller are likely to be doing business for a long-term, thusboth sides should benefit from the final arrangement.Long-term company tocompany relationships should prevail over short-term negotiating objectives.Many issues should be settled before the two sides depart for home.Among the more obvious would be an agreement on the final statement ofwork, terms and conditions, the schedule of performance, perhaps specificmilestones to meet, management oversight and reporting, interim or progresspayments, and of course the final 200 Project Procurement Managementcosts or price.There should be a prior understanding that the major pointsof the final settlement will be reduced to writing and initialed by the keyparticipants prior to departure.Best and Final Offer (BAFOJSometimes at the conclusion of negotiations, die buyer will dien askall remaining and responsive sellers to submit what is called their best andfinal offer (BAFO) of a price for the effort.Typically the BAFO is cen-tered on price only, but other factors could come into play such as sched-ule, warranty, options, anything that was discussed in the negotiations.Forming a Procurement Team toManage Complex BuysIf you are buying nuts, bolts, and paints, or even expensive com-modities, but commodities built to the seller's product specifications, youprobably would not need to form a special team to manage these buys.They are fairly straightforward and the only issue is that the parts arrivewhen needed by the project, and that they work.Most companies have inplace some type of procurement process in the form of an MRP, MRP II,or ERP system which handles the procurement of such items to supportthe project schedule.Typically these automated purchasing systems workquite well.However, if the project is buying a major complex new item,something which has never been done before, or is procuring something inaccordance with a corporate teaming arrangement, it is stronglyrecommended that the project consider forming a multifunctional team tomanage such procurements.Why: because no one individual processes allthe skills needed to adequately manage all of the issues which are certainto arise.The management of major complex procurements and teamingagreements requires the collective skills of multiple functions workingtogether as a team.To be sure, one individual needs to be placed in charge of each pro-curement team.But the team itself will be assembled from multiple Source Selection leading to a Contract Award 201functions, crossing organizational lines, intruding on fiefdom territories.Great interpersonal skills will be needed by anyone called the team leader.The traditional roles of the project manager, the functionalmanager versus project teamsThere are some traditional roles typically expected from anyone who hasbeen given the title of project manager, versus others who are calledfunctional line managers.The project manager is normally expected to: 1)define and authorize the work to be done on the project (provide a projectstatement of work); 2) define the timeframe for all authorized work (issue aschedule); and 3) provide the necessary funds to do the work (release abudget).By contrast, the role of the functional manager is to review, takeexception, and finally accept the project manager's definition of what is to bedone, and then: 1) provide the needed staff to support the project; and 2)oversee and supervise the work being done
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