Award and Negotiation

Once the successful bidder is selected, it is still possible to request corrective actions and additional terms through contract negotiation. There are occasionally situations where a contractual term cannot be negotiated with the first selection and the next candidate is offered the toll contract. Chapter 3, Mutual Agreements, Obligations, and Contract Considerations addresses this topic in more detail. 

Once a toller has been selected and any required preliminary confidentiality protection is in place, the client typically shares more detailed information. The toller can then make an informed decision about the economic, technical, and safety aspects involved in bidding the work. If the two parties decide the project will be mutually beneficial, agreements and obligations are negotiated and then formalized in a written contract. Both parties—the client and the toller—have roles in fulfilling the contract and in carrying out their responsibilities to the workers and the public. The purpose of the written contract is to clarify and document those roles and responsibilities to effectively execute, maintain and eventually terminate the project. 

A successful tolling project depends upon defining the project objectives at the outset and clearly communicating those objectives. The objectives take into account the rights and expectations of both the toller and the client. Specifics such as ownership, specifications, timing, regulatory requirements, product quality, and documentation are considered. Each project or process is unique and consequently the agreements reached between the parties and the 

What confidentiality and/or secrecy agreements are needed to protect both parties  

What is the value of supplied materials at any given time under the toller s control  

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Contract review is but one of the tasks in the contract acquisition process. These are marketing, prospect acquisition, tendering, contract negotiation, contract award, and then contract review. However, in a sales situation, you may simply have a catalog of products and services and a sales office taking orders over the telephone or over the counter. The contract review element of this operation takes a few seconds while you determine if you can supply the item requested. In an organization that produces products to specific customer requirements you may in fact carry out all the tasks in the contract acquisition process. Rather than isolate the contract review task and produce a procedure for this, your business may benefit more from a procedure or series of procedures that covers the contract acquisition process as a whole. 

To protect both parties in a contract arrangement it is good practice to make a contract in which the scope of work, completion time and method of reimbursement are agreed. Contracts are normally awarded though a competitive tendering process or after negotiation if there is only one suitable contractor. 

Contract Award - Every contract award, whether competitive or negotiated, must be documented with a thorough justification memo analyzing the reason for the selection and comparing the relative merits of all contractors considered. 

The UK Department of Health negotiates with companies a maximum rate of return on capital employed in their sales to the National Health Service. An overall rate is fixed for the industry as a whole and within this figure an indivi dual firm is awarded a particular rate having regard to the scale and nature of the company s relevant investments and activities and the associated long-term risks . The system may perhaps have to be changed because of EC legislation. 

In crafting the RFP, clearly state your assumptions about volumes of business to be awarded, service levels, etc. explain the selection process and criteria and outline how you intend to measure both your and the supplier s compliance with the terms of the contract. Point out the potential increase in business that winning the contract would mean. Send out the RFP and then make your preliminary decision based on your preestablished criteria and use your best negotiating skills to come up with a final choice. 

Procurement/purchasing—All actions related to acquisition plaiming, solicitation, evaluation, negotiations, contract award, contract administration, and contract management functions. 

Even the phase of the contract awarding, which begins with pre-qualification and ends with the conclusion of the contract, may extend over several years, especially due to lengthy contract negotiations. 

Due to the price level of medium-sized and large-scale projects, both parties will invest considerable time and effort in the price and deadline negotiations. Participants in contract award negotiations are often trained in negotiation techniques /2.40/. In this connection it may occur that so-called facilitating payments are expected. 

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