PM-105 Negotiating Read Guide

PROGRAM INTRODUCTION
This module is designed to support Parsons Brinckerhoff's Project Management training program. The focus of the training is on personnel who function as PMs, deputy PMs, soon-to-be PMs, and task or discipline leaders. It will help them manage their current work and prepare for additional management roles. This module introduces the basics of negotiation at Parsons Brinckerhoff, but the principles may be applied to many aspects of living. This module is one part of the comprehensive Project Manager training program. The core modules in this program are: PM 100 - Introduction to Project Management PM 101 - Project Scope PM 102 - Project Schedule PM 103 - Project Budget PM 104 - Project Quality PM 105 - Negotiating PM 125 - Cash Management PM 126 - Project Control PM 127 - Overhead PM 128 - Project Contracts PM 129 - Managing Project Performance PM 130 - Project Management Policies and Procedures PM 175 - Project Organization PM 181 - Project Administration PM 182 - PBIS for the Project Manager

OVERVIEW OF THIS MODULE

The primary focus of the module is to cover the broad aspects of negotiation, including: Overview, Benefits, Objectives, Definitions Why Do We Negotiate? Introduction to Negotiation Before You Negotiate Developing a Negotiation Strategy What to Negotiate PARSONS BRINCKERHOFF 1
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Conducting Negotiations Negotiating Techniques Approaches and Solutions After covering the training material, the module will address local approaches and solutions. Here you will have an opportunity to discuss local issues and any variations from the training material with an experienced project manager/negotiator.

MODULE BENEFITS
This module will provide specific overall benefits that can be put to use immediately back on the job. These include helping you to:

Conduct Successful Negotiations

It must be remembered that negotiations are a continuing part of all projects. A project manager is always negotiating internally for resources, with subconsultants and other PB cost centers, and externally with our clients, permitting agencies and others from selection until project completion.

Improve Profitability
Successful negotiation in all phases will increase the potential for successfully completing the project for our client while making a fair profit for PB.

Satisfy the Client

It is often necessary to negotiate with other consultants and contractors on behalf of our clients or to propose negotiating strategies for their use.

Obtain Repeat Business

PB "lives" on projects. Therefore, it is necessary to continually obtain repeat business. The PM is in a primary position to make this happen. A successful PM is always alert for negotiating opportunities in which to position ourselves for contract modifications or new assignments.

MODULE OBJECTIVES
Understand the basics of the negotiation process. Understand the relationship of negotiations to project management. Prepare for client negotiations on the job. Conclude negotiations in a successful contract.

DEFINITIONS OF NEGOTIATION TERMS

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Margin Extra Work Claim Strategy Negotiations/The PB version: the art of achieving a fair and profitable fee for the performance of quality services through understanding and compromise on issues of scope, schedule, and price while maintaining the necessary standards of quality the establishment of the platform for the long term relationship between the client and PB the establishment of the guidelines for the conduct of the project Negotiations/The process version: the process by which opposing sides resolve their differences by bargaining with one another to reach a mutually acceptable agreement. These differences are the issues to be dealt with, so the first step in the negotiation process is to identify the issues. Fee: the total value of the contract, normally the sum of labor and material costs, overhead costs, subconsultant and direct expenses, general and administrative fees, and margin. Margin: the difference between the fee paid and the actual cost of accomplishing a specific scope of services. Extra work: modifications requested by the client to previously completed services or products, or requests for professional services not included in the original negotiated scope/schedule/budget. Claim: a dispute situation involving formal disagreement over conditions of performance brought forward in writing by the construction contractor, owner, or engineer.

WHY NEGOTIATE?
It is important to understand that PB's continuation as a premier firm depends on establishing and maintaining long-term professional relationships with our clients. The process by which we address and resolve the inevitable problems that occur during a project contributes to the success of those relationships. PB's policy dictates a fair, knowledgeable, and equitable approach to negotiations. The art of negotiation is a skill that is used repeatedly throughout a project. A project manager should have both formal and informal negotiating skills to be successful. Informal negotiating skills enter every task, assignment, and schedule discussion within the project team and probably every discussion with the clients representative. Formal negotiating skills are usually called for when the reputation, business needs, and the best interests of the company are at stake. The objective of negotiating may be a contract with a client, but the skills apply equally to negotiation of amendments or supplements, significant subcontracts, joint venture agreements, and significant staffing changes. The reasons for negotiation are many, both in our business and personal relationships, and the people we negotiate with are diverse. During the training module, you will receive a handout with more details on whys and the whos.

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It's the Policy

The only approach that will lead to a long-term relationship is one in which both parties to a negotiation feel they have won what they needed for success. A firm cannot continue to exist if clients do not perceive that they receive both good value and fair treatment. The process of negotiation at PB is CONTINUOUS, extending from the selection through to the closeout of each project. The major milestones are: You are selected for the job, and your proposal is an offer. Your client views this as what you will do. You should view this as what you will do if you can negotiate adequate compensation and terms. A fully executed contract and a notice to proceed confirm that you have answered all your questions and have adequate compensation to do the work. As you proceed, you will find that conditions change. This will require negotiations to modify or make significant changes to the contract for extra work not included in the original negotiated scope/schedule/budget. Modifications for Extra Work Promptness is the key. Immediately upon identification notify the client. It is extremely important to get contract modifications because they can preserve or increase your margin. In fact, you must get them. Always negotiate a professional fee (cost recovery and margin) on extras. Documentation of agreed extras includes change order, contract modification, and letter agreement, and these are always executed before providing any services. In the absence of written authorization from the client, the minimum acceptable documentation is a letter to the client from the PM confirming the scope, schedule, and cost of the client-directed work. To establish grounds for extra work, consider: Contract language versus actual scope of work Project manager's commitment to trust Strategies for timing an early request Early written documentation Early notification to client Client approval constraints Client initiated extras Overcoming client reluctance Use of contingency funds Contractor-initiated extras Claim/Dispute Resolution If you cannot negotiate extra work, you either accept the consequences (typically a cost overrun) or enter into a claim/dispute situation. If you can successfully negotiate the claim/dispute, it appears as a contract modification. If you cannot, you must consider other options: Negotiation by Parties (the preferred method) Seek attention to the claim by other parties in authority at the client Explore exchanging the remaining scope for extra scope performed on a cost-equal basis Contract provisions Audit Alternate Dispute Resolution (ADR) Litigation, as a last resort

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Serious claims/disputes usually cannot be resolved as an extra request. Once identification or notification of a claim situation has been made, the alternatives to be considered include to continue work/stop work and to continue invoicing/stop invoicing. If all else fails, you will evaluate other options with contract services and perhaps initiate litigation. Otherwise, you will close out the contract in the most cost-effective way possible.

INTRODUCTION TO NEGOTIATION
Negotiation must be understood as an all-embracing part of life. We are always negotiating in some way, whether at home, work, or play. At PB we will negotiate with both public and private clients as well as the leader of a team and/or with other consultants in a prime or subconsultant relationship. In our personal lives we may negotiate for a house, a car or within our families.

Alternatives to Negotiation
There are several alternatives to negotiation: One party may have the power (right or might) to dictate the terms and conditions: as per the golden rule; whoever has the gold rules! There may be institutional precedent or policy that is difficult or unlikely to change and you are told Thats what we do. Recognize this may be a negotiating position. If the result of such circumstances would be adverse to PB, one should not proceed to contract with such parties.

Negotiation Premises
Negotiation must be addressed as a continuum that starts with being selected and ends only with project completion. The typical negotiation process usually follows predictable steps. First is timely notice and a clear understanding of the objectives by both parties. Next is preparation and any pre-negotiation meetings. Next comes actual negotiation, beginning with initial sessions proceeding through negotiations to closurethe deal. During the process, you will be involved in concessions and revisions as necessary. With agreement comes closure, final documentation, and a contract. There are several premises that form the basis of this continuing process. Negotiation is the bridge between the winning proposal (what you are offering) and the contract (what you end up committing to do). A long-term relationship begins with, and depends upon, successful negotiations. It never hurts to ask. Whatever it is you seek or expect, if you ask with tact and consideration, they can only say yes or no. Either way, document the answer. Everyone has to live with what you negotiate.

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BEFORE YOU NEGOTIATE Prepare, Prepare, Prepare...

Preparation for negotiation is absolutely necessary for success. The better prepared the negotiation team is, the less chance there is we will be stuck with a contract that cannot be properly completed. PB's definition of "properly completed" is to fulfill the contract requirements at a profit with a satisfied client. Preparation includes the whys and the whats appropriate to a particular project. Preparation is an iterative process. The team is concurrently establishing an approach, defining the goals, gathering data, and adjusting direction as more information becomes available. Pre-negotiation meetings to collect data and answer basic questions can be invaluable. For more information, consult The PM Manual, Chapter 17, Negotiations and the Preparation and PreNegotiation Meeting Checklists in the Appendix. Knowledge is a powerful tool and it is developed and organized in the preparation phase of the negotiation. Know all sides of all issues and know more than anyone else.

Negotiation Notebook
The negotiation notebook provides a concise organizational framework for records management and ultimate verification of the negotiation process. It is not only a way to organize all the disparate elements that are part of preparation, but an effective prop during the negotiations. If you can easily refer to the background data for the topic being discussed, or to the back-up calculation for a particular item of proposed cost, the impression given is: "They know what it takes to do this job!" Most of the suggested contents of the negotiation notebook are self explanatory. (Refer to Negotiation Notebook Checklist in the Appendix.) However, assumptions, a record of the intent of the parties, and formal minutes are the best protection for the firm as a project proceeds. The formal minutes are best assembled as a Memorandum of Negotiations. The memo should derive directly from the negotiations notebook and the notes generated during the negotiation. No single document is likely to be of help in obtaining consideration of an extra. The Memo of Negotiations is a must, a shall do, in the negotiation process. Assumptions and descriptions of intent are typically not included in contracts although they can sometimes be a part of scope. Assumptions and intent should be included whenever a scope item can be interpreted in more than one way.

Know Your Client and Opposite Negotiator

The desired result of the assembly of this data is to know the client as well as one knows the project. Interview PB peoople who have worked for the client on other projects. If the client is new, find others to interview. To know the client well is to know what the constraints are to achieving your goals and to be able to anticipate their negotiation position. Most of the requirements are self explanatory. (See Know Your Client in the Appendix.) Obviously, the data is obtained in various ways from various sources. It is never complete and seldom confirmed. You should identify and record facts as well as assumptions and best guesses. This is difficult and frustrating for some to accept because there are dangers in proceeding on assumptions. The key is to find the constraints that will hamper our collective success or preclude making a fair profit. With new clients, particularly non-governmental ones, we must know that they can/will pay our invoices.

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One frustration occurs when a client stalls an entire invoice over a single questioned item. We prefer a contract provision that allows clients to defer paying questioned items, but requires them to pay the remainder of the invoice. This is called a "blue line" provision. Although the client is represented by the negotiators, the negotiators must still be assessed as individuals representing their client. It is important in establishing PB's team/strategy approach to know with whom we will be negotiating. A first question must be "Do they have the authority to commit?"

Know Your Team

Once we understand the client and the client's negotiators, we must formulate our team and strategy. PB policy is that all negotiations must be conducted by a minimum of two people, typically the PIC and the PM. The reason for two is that one will listen carefully while the other is talking. One records the intent and progress while the other advances the negotiation. A single negotiator must have prior concurrence from senior management. In a complex negotiation, particularly with a new client on a large project, it may be wise to have a team of three, or more, with one person to take detailed notes and prepare draft minutes against which the other two can cross-check their notes. Often small side negotiations may be conducted within disciplines, such as civil or mechanical, with the result then incorporated into the main negotiation. For more information, refer to Know Your Team and Your Objectives in the Appendix.

Completing Your Preparations

The preparation phase is complete when you have evaluated the issues and established your plan, confirmed the makeup of your negotiating team, and agreed on your approach. Of particular importance is what you must achieve to sign a contract, what you intend to have, and what you would like to have but could do without. This is often referred to as MILs (Must have/Intend to have/Like to have). As a quality assurance test of your completed preparation, you may wish to have a mock negotiation with someone playing the client role. Before negotiations start, you should have seen the negotiation room, know where each person plans to sit, and be aware of any planned interruptions or signals to caucus, etc. The major issues should be framed as questions to which we know definitive answers.

DEVELOPING A NEGOTIATION STRATEGY

With preparations on the issue completed, the approach must be set. The approach is a combination of what you know, your natural style, and what is appropriate for the situation. When fine tuned, this approach will result in a general idea of the strategy and tactics to be applied. Strategy is "skillful management in getting the better of an adversary or attaining an end." Tactics is "the mode or practice for gaining advantage or success." PARSONS BRINCKERHOFF 7

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So, we may interpret effective strategy as a broad, long-range approach that is implemented by a series of preplanned tactics. In the eyes of the negotiator, tactics are the steps by which his or her strategic plan moves purposefully toward an objective. Prior to getting into the strategy, it is important to quickly review some typical negotiation situations and the preferred PB approach.

Typical Situations to be Avoided:

Lose-Win: You lose and they win. Your client says negotiations are terminated because you are so inflexible. Win-Lose: You win and they lose. You tell the client that they can no longer expect additional services without negotiating a modification. Lose-Lose: You both lose. Your client terminates the firm and fails to complete the designs in time to obtain federal funding. Us vs. Them: Always be aware of the attitudinal change that is signaled by the use of us versus them. Strive for the WE feeling. This is what the buzz word "partnering" means. The Desirable Situation: Win-Win You both win. You and your client negotiate a modification to the contract that pays to accelerate the design, thus meeting a federal funding window. Once issues are known and quantified, you must prioritize your objectives with a recognition of what you can give up and what you cannot. This falls under the MILsMUST have (M), INTEND to have (I), and LIKE to have (L). The most favorable position (MFP) is your opponent's or PB's best beginning position. Try to understand their position so that the client is getting what he/she must have and that mutual exploration of their issues will lead to movement on both sides toward a mutually satisfactory agreement. Recognize that in the process there may be a point where, in spite of your plan, you will be surprised and need to caucus, i.e., discuss things privately. Before you go into negotiations, decide on the point where you must break off or, at least, reconsider the situation before another session. The break point for PB is that combination of terms, conditions, schedule, scope, and budget at which we cannot continue negotiationthe "least acceptable position" where parties prefer to break off the negotiation rather than settle beyond that point. A caucus and proposal to meet again after reconsideration may be in order. The end result of strategy preparation is your agenda for the negotiation meeting, i.e., your plan for how you will lead the negotiations toward the results you seek. The agenda for the negotiating meeting is a key tactic.

Terms to Avoid
The terms to avoid are a repeat of the major NO-NOs. If these appear in a contract that is negotiated for PB, they will not pass the review by the Contract Services Office and in most cases must be renegotiated. For a list of definitions and some terms to avoid, see Terms in the Appendix.

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The concept of linkage is to never give up anything without linking it to getting something in return (at least in your client's eyes). Obviously, the goal should be to get something you must have while giving up something you would like to have, or better yet, had included as a throwaway item, e.g., we include the lease cost of a 4-WD vehicle when the need for one is limited. This is most important in the areas of scope, schedule, and budget where change is inevitable. Most contracts require a change in scope or schedule or we lose credibility. If we don't accept change and compromise, we must confess we are building in a suitable contingency (which of course we need). Negotiations close when both sides agree that they have what they need to proceed. Beyond this point there will be recording, reviewing, and some clarification before a contract is signed.

Style, Strengths, and Strategy

It is important to know your own negotiation style and qualifications and to compare them to what you know of your client's. This allows you to assess your team and finalize their roles. Being prepared, understanding the teams, having defined roles, and knowing your client create the basis for developing a win-win strategy. PB seeks to understand the client and work toward a fair resolution of all issues while keeping our operating goals fully in mind. The point is to synchronize our strategy with our goals and to convince the client that the approach that is best for PB is also best for the client. As often as possible, PB seeks to take the lead and conduct the negotiation on our terms. To do this, we must always keep several key considerations in mind: How do scope, budget, and schedule relate? Is the level of effort, including management responsibilities, clearly defined? Are PB goals equated to client goals? Has a win-win/positive approach been created? Do you understand past, present, and desired relationships with client? Have you assessed the strengths and weaknesses, including the competition, the importance of the resolution of differences to the parties, the likelihood of achieving our objective, and the likelihood of our opponents achieving their objective? How serious are the consequences to either side if agreement is not reached? How much time is available to reach an agreement?

Designing Your Negotiation Strategy

Of course, the successful implementation of any strategy depends upon the party's strengths and weaknesses and the pressure to come to an agreement, e.g., the client needs the services fast or PB needs the work load now to occupy the staff. These real world operating goals have a major effect on how we proceed with the negotiation. There are certain basic negotiation tactics that should be followed. The general rule is to let the other person state their position. Then you can react to it. This puts you in control. That's why the car salesman always asks you what you would be willing to pay for the pink Lexus. It establishes a point from which to proceed. Of course, another way is to let the other person ask the question and then give them a very high/low response, e.g., $20K for the $30K automobile.

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Continue to seek the client's statement of a position on which items are fixed, which are negotiable, and what their bottom line is (i.e., the Board has authorized $K). At this time you might also discuss contingency to find out if there are any reserves. These discussions shape how you can collectively arrive at a fair price for a defined scope with adequate time to complete, while maintaining a suitable contingency for unknowns. The PB negotiation strategy summary is our approach to doing business. For a more complete list of things to consider, see Developing a Negotiating Strategy in the Appendix.

WHAT TO NEGOTIATE
The information in this section should be familiar to you from your experience or from other PM training modules. (Also see What to Negotiate, Parts 1, 2, and 3 in the Appendix for more complete lists.) All of these contract elements must be considered and either included or excluded. If excluded, the exclusion must be recorded in the negotiation documentation. The result of every negotiation is a total fee that is appropriate for the scope of the work. It includes an appropriate profit within a contract that shares the risk based on this total fee. Fee considerations are covered in detail in another training module and are only briefly reviewed here to stress the ultimate goal of negotiations at PB.

CONDUCTING THE NEGOTIATION Negotiation Guidelines

Here is where all the preparation will pay off. Conducting the negotiation is where you will find out if your plan will work. You will learn if there are unknowns and surprises requiring you to shift your thinking or caucus to decide the next step. Typically, the process does not go according to plan, but your preparation and "what if" strategy discussions will quickly show you what your response to change should be. In this section we will reinforce the PB approach.

Ethics
Our selection and use of negotiation techniques must be carefully considered and must conform with negotiating ethics. We do not play games. Our negotiators are truthful because it helps develop mutually respectful long-term relationships. We understand the meaning of confidentiality, and it is important that we adhere to this principle. Ruthlessness has no place in the PB negotiation process because it can contribute to a loss of credibility and, more importantly, a loss of future work. PB provides professional services and expects to negotiate a fair and profitable fee before providing such services. The most effective negotiating technique is the Honest Straightforward approach. This technique works more often than all the others combined. At the very least, it must always be kept in mind.

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It is also important that PB negotiators exhibit a professional and honest demeanor. Do not be an actor, and do not use tricks or subterfuge.

Negotiating Techniques You May Encounter

Higher Authority: The appeal to a higher authority is often used for contract items. Negotiators use such authorities as the contract committee or risk assessment committee, individuals in the contract services office, the insurance carrier, subconsultants, or upper management. The countermove is to remove the "Higher Authority's strength with such closing questions as: "If the proposal meets all your needs, will you be able to accept it today?" "They usually follow your recommendations, don't they?" "If you accept the proposal, you will take it to them with your recommendation, won't you?" The idea is to get the client to buy into the approval process by playing to their ego. Higher authority is often used to caucus. If the client does it to you, side-step by saying, "I have the authority on some points, but on others, I may have to seek higher authority for approval." Nibble: Often referred to as "Add-Ons and Take-Aways, this technique is often used to get just a little more, in other words, to nibble away at what you have agreed upon. For example, you have just reached agreement, but the opposite team says, But we need to add the 404 permit applications. Or they ask for maintenance agreements for appliances and cars. The countermove is to make them feel cheap or say, "Well, I forgot this so we need to reopen negotiations." Good Guy/Bad Guy a.k.a. White Hat/Black Hat: Popularized by television cop shows, this technique uses two negotiators and plays one off against the other. Here the important thing to remember is that the good guy isn't on your side and the bad guy really isnt your enemy; both of them are only playing a role. The best countermove is to identify the tactic, remain objective, and proceed from a position of strength. Aim High: With this technique a negotiator literally aims for the stars or asks for much more than he or she wants or is prepared to accept. Then concessions are given and there is room for the other side to win. Flinch: This technique is self-explanatory. When it is used, the negotiator visually reacts to a proposal as if he were going to be hit in the face and it is more than he can accept. If you don't react, they might take it as acceptance. After the flinch, you begin the negotiation process once again. Shotgun: This technique is usually used to surprise. When clients says "Unless you agree immediately to a 110% overhead cap, we will have to begin negotiations with XYZ," remember that they are under the gun to negotiate a contract. The best countermove is the Set Aside. Recognize their position and say, "Let's set it aside for now." If they won't let you, then test for validity right away. Perhaps you can remove overhead items and make them direct cost reimbursables. Informal Go-Betweens: Use these arbitrators to break deadlocks. The person should be seen as a neutral party who listens to both sides. Then the arbitrator concedes on some point. Salami: This technique is used to add or remove little pieces at a time as when you slice a salami. Printed Words: Offer a standard schedule of charges for CADD, insurance, CJCC, labor rates, etc. Withdrawn Offer: Linkage allows a negotiator to withdraw an offer. It is often used in combination with Higher Authority. This technique can be used if the Nibble technique continues. PARSONS BRINCKERHOFF 11
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"Fait Accompli": This technique arises when the client took scope and price, the agreement seems to be complete, and it is sent for your signature with no negotiation. Stop! Don't respond to the written document. Negotiate scope, schedule, and price. Vice Technique: This technique tries to put you in a squeeze. It is seen in remarks such as "I'm sorry. You'll have to do better than that." One countermove is "How much better?" Red Herring: With this technique a negotiator creates an issue that isn't really an issue, then trades off for it later. Puppy Dog Technique: Using this technique, the negotiator wants to get you emotionally involved. A promoter wants to evoke a sense of ownership before the fact and then use your emotions against you. The salesman poses questions as "Wouldn't you like to drive it?" or "Wouldn't you like to try it on?" Dumb is Smart/ Smart is Dumb: This technique is often a good way to gather information. People often want to help the underdog and teach the ignorant.

Eight Key Steps

The negotiation process comprises eight key steps that should be understood by all. It is extremely important that you recognize the following basics: 1. Prepare before conducting negotiations or failure is quite likely. 2. Arguing does not mean being argumentative. It means presenting our reasons for what we are proposing calmly, coolly, and logically. 3. Signaling means using some visual method for communicating; for example, a hand on the arm means, "Let me take over." 4. When seeking agreement, we like to resolve issues by proposing. 5. Packaging is the way we propose the resolution of the issue, e.g., the sizzle of the steak. 6. Bargaining is the linked give-and-take of negotiation, i.e., "We can reduce this if we do not have to do that." 7. Closing occurs when you have obtained what you need to execute the assignment successfully and agree to proceed with documentation and approvals. A clear statement of closure helps both parties feel that they have won. 8. The documentation, which is usually in a contract with scope, schedule, and budget attached, should be written immediately and accompanied by any final negotiation notes that could be useful in the future when change (as it will) occurs. Negotiation is a skill that falls under "life-long learning." The more you observe or do, the better you can become at it. So keep at it. The remainder of this section expands on the iterative eight-step process with general guidelines to keep in mind.

Perceptions and Behaviors

When you start negotiations, you are trying to identify each unclear issue that must be addressed and the positions of both parties on these issues. If there were no issues to resolve, you could sign a contract, receive a notice to proceed, and start the assignment. This just does not happen in our complex business. PARSONS BRINCKERHOFF 12
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The beginning of the negotiations is the first opportunity to set the "tone" of the project relationship, which is a relationship where two or more parties are working together, not apart. This is the time to raise and define uncertainties. It is the time to ask questions such as "What does the contract really mean?" It is not a time for ego. As you expand upon your knowledge of the issues that must be resolved, let your client understand that you are flexible, not rigid. However, keep in mind that every change in contract terms (scope, schedule, budget, or boilerplate) has an effect that must be quantified. Never open with stated position or demands that create rigid positions and may result in lost opportunities. Instead, explore mutual interests and work towards a joint position. The goal is Win-Win, and being flexible should allow you to carry out your plan as opportunities arise. Surprises are always a part of negotiation. Just as you prepared and formed a strategy, our clients have (or should have) done the same. Neither party can fully anticipate what will come up. Expect to be surprised, and handle it as an expected occurrence. Never negotiate when surprised. Buy time for the team to consider this new development by going to a new issue or topic. If necessary, adjourn and reschedule for another time. Do not reveal your surprise when it is used as tactic against you. Surprises are also an excellent time to listen rather than speak. Try to meet the needs of the other side. This is what the process is all about. Spend as much time on their needs as on your own. Look for hidden needs. Find ways to help them! Ask if their needs are being met. If you can discover the hidden needs and wants of the client that you can easily and/or cheaply grant, you are on your way to a win-win situation. The negotiation process in professional services is one of exploration, understanding, careful consideration, and mutual resolution. It is not a quick process. If an agreement is pushed too quickly, it is quite likely that one side has missed some key issue. These missed issues will emerge during the course of the assignment and need to be resolved then. That type of mid-project resolution quite often leads to a project cost overrun for PB, an unexpected change order for the client, and disappointment for everyone. So, take your time and do it correctly the first time. Be patient and go slowly; quick agreements are usually one-sided. Time is on your side (probably the only time). Do not stall, but be deliberate. Use PB's full resources. Continuing with self-enforced deliberations, we must also be aware of the pitfalls of being tired, upset, or emotionally stressed. They are all sufficient reason to break off negotiations temporarily. The dangers of overreacting in time of stress or of accepting a bad deal because you are just too tired to care should be obvious to everyone. Emotional reactions are the enemy of a good negotiator. Never lose emotional control. Remember the three Cs and stay cool, calm, and collected. If you dont, you endanger the long-term relationship we are trying to develop. Refer to the Negotiation Skills Checklist in the Appendix for a quick review.

Documentation and Evaluation

Documentation is an important way to share information with management and team members, to evaluate the next step, and to have a record of what transpired, just in case. Documentation should include summaries in writing, with any rough notes attached. Document informal meetings, pre-negotiating meetings, telephone conversations, and written correspondence. PARSONS BRINCKERHOFF 13
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Written minutes (We said/They said) should always document any formal negotiation session. The originator should request that the other parties approve by initialing the minutes. Areas of disagreement should be noted and also initialed. Following the negotiations, all agreements must be included in a contract. Negotiation minutes are not always attached or incorporated by reference, but they are invaluable after the contract is signed to remind two parties of their mutual agreement, particularly scope items that have been omitted and levels of effort that were modified. When negotiations end, it is also necessary to: Revise the Negotiations Notebook to reflect the result of the negotiations and retain this record in the project file. Prepare a Negotiations Memorandum for each session that records all details of understandings and interpretations reached with the client that are not explicitly stated in the contract. If possible, give the clients representative the opportunity to review and initial the memo. Evaluate the success of the negotiations, compile a list of lessons learned, and share this information with others. Refer to Documenting the Negotiation and Post Negotiations in the Appendix for more specifics on documentation and follow-up. In addition to lessons learned after the negotiation, there is even more to consider after the project is completed. This is part of the completion reports required by PB and covered in another training module.

Approaches and Solutions

While formal text material is an important part of an overall training program, there is no substitute for the practical experience of others. In addition to this "experience factor," there are always local situations that can have a modifying effect on many aspects of a project. The local issues, situations, approaches, and solutions need to be discussed with personnel who have been involved in the issues and situations. These issues should also be discussed with personnel who have experience in project scope and have had prior work exposure in the area.

The Checklists in the Appendix

Negotiation by its nature can become hectic when it should be deliberate, fragmented when it should be cohesive. One never feels fully prepared. The checklists in the Appendix are a quick reference to help determine if you are prepared and all your bases are covered. Do you know what you will try to accomplish at each session? Have you reviewed the basics? The checklists generally repeat or enhance the major items in the text of this module.

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