Post-tender negotiation

07 September, 2000

Latest articles on resources

More news

07 September 2000

Q: At what stage in a tendering process is it acceptable to commence post-tender negotiation?

A: Charles Mossman, senior sourcing specialist at Conoco (UK), writes: I do not generally advocate post-tender negotiation. Conoco's policy, which I support, is that bidders get one chance and one chance only to tender their very best offer. If suppliers know this is your policy, then you will get their best price. Athough they may lose business at first because they did not bid their best price, through the tender debrief process they will get to understand your policy better.

If suppliers know that your policy is to allow post-tender negotiation, then you will not get their best offer first. They will build into their price some margin for negotiation. When the bids are evaluated, you will not really know which is the commercially keenest offer. Then, at the negotiation stage, time is spent reaching the optimum position with that bidder. You still may have a niggling doubt about whether you have got the right bidder and the right deal.

Overall, the bid with post-tender negotiation will take longer and may not get you a better deal.

Having said that, in my experience there is sometimes a place for post-tender negotiation. In some more complex procurement - for example, major services - once the preferred bidder is chosen there will be the potential to optimise the bid and come to some win-win solutions that result in a better deal all round.

SMsep2000

resources q&a 2000




Add comment