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TSE003-P5 Project Negotiations, Procurement and Vendor Management

Practical Approach to Negotiations & Procurement

Course Description

One of the toughest jobs project managers and leaders face is negotiating project issues in order to reach successful project completion, while still maintaining good relationships.  A project manager is called on to negotiate when, among other tasks, the project requires: Hiring contract personnel; Procuring services, materials and equipment; Arranging for support group commitments; Dealing with internal and external project team conflicts; and Incorporating required scope changes.  While some negotiations involve a one-time acquisition or event, others require careful protection of new or ongoing working relationships.  Project negotiations are much different than buying a used car!

Participants learn basic and advanced negotiating strategies and tactics that can be used to ensure satisfactory agreements, without compromising project success.  This module picks up where PP&C, The Foundations of Project Management leaves off by expanding upon the methods of negotiating with your team, support groups, sponsor, management, outside vendors and interfacing projects. It reinforces and introduces additional techniques for interacting with the Stakeholders needed for project success.

Participants involved with PMI® and the Project Management Institute’s Project Management Professional – PMP program, are awarded 8 PDUs or “Contact hours”.  Our Global R.E.P. number is 1270. The workshop is also compliant with the IIBA® BABOK® (Business Analysis Body of Knowledge). 

Upon completion of this workshop, each participant will be able to:
  • Confidently and Successfully engage in Project (and even non-project) Negotiations.
  • Apply valuable verbal and non-verbal Communications techniques to all Project Communications, including Negotiations.
  • Understand, Develop and Apply applicable negotiation tools and strategies, including BATNA, to meet project goals.  
  • Negotiate with Support Groups, Cross Functional Resource Managers and Team Members, for assistance and commitments (SLAs), to create project deliverables.
  • Negotiate with Vendors and Subcontractors to ensure that required work is contracted to ensure it is completed on Schedule and meets Quality standards.
  • Understand many of the Legal, Ethical, and Organizational issues that need to be considered before, during, and after Negotiating.
  • Identify the Procurement Management process and the role the project manager plays in dealing with vendors and support groups.
  • Understand the different type of contracts, purpose, benefits and potential pitfalls.

Instructional methods for this one-day module are lecture, discussion, exercises, simulations, role plays and workshops. References and inclusion of the PMI® PMBOK Fifth Edition are included and applied. Session also includes participant discussion and feedback of on-going project situations.

Course Outline

  1. Introduction and Course Objectives
    1. Project Management Maturity
    2. Project Phases PMI®
    3. The “Manageables” (Time, Money, People, Methodology, Objectives) and of course, Risk!
  2. Negotiations “101”
    1. What is a Negotiation?
    2. The Process of Negotiation
      1. Research
      2. Set-up
      3. The Actual Negotiation
      4. Tactics
      5. The Close
  3. Planning for Upcoming Negotiations (Research our arena!)
    1. “Your project will lose if you do not have a plan!” – PERIOD.
    2. Aspects of the Negotiations that you can plan
    3. How to Plan for a Negotiation
    4. Why Negotiate?
    5. Who do you represent?
    6. What are your strengths? Weaknesses?
    7. Who are your (personal values, corporate values)
    8. What are the Objectives?
    9. Research the Details
    10. Why would “they” want to negotiate with you?
      1. Strengths of your position
      2. Weaknesses of your position
  4. Planning for Upcoming Negotiations (Research their arena!)
    1. Aspects of the Negotiations that you can plan
    2. Who do they represent?
    3. What are their strengths? Weaknesses?
    4. Who are they? (personal values, corporate values)
    5. What are their Objectives?
    6. Research the Details
    7. Why would they want to negotiate with you?
      1. Strengths of their position
      2. Weaknesses of their position
    8. How do they “see” you?
    9. BATNA (Best Alternative to A Negotiated Agreement)
      1. Determining their minimums might be
      2. Understanding their best option
  5. The Set-up
    1. Agenda!!!
    2. Choosing the Meeting Site
    3. Configuration and Seating
    4. Meeting Format
      1. Face to Face
      2. Advantages and Disadvantages of Holding Negotiations
        1. by telephone
        2. by video conference
        3. by email
    5. Who Should and Should Not Be Present (Preparing for the “wrong people”)
    6.  Timing of Meetings
  6. During the Negotiations
    1. Two way Communication
      1. Non-verbal Communication
      2. Verbal Communications
    2. Tactics
      1. Control
      2. Thing NOT to say
      3. Good Cop, Bad Cop
      4. Re-opening Issues
      5. Imaginary Partner
      6. Positional Bargaining
      7. Controlled Outbreaks
    3. Stalled Discussions
  7. The “End Game”
    1. Getting to Close
      1. Judge each proposal against your BATNA
    2. Not Giving Up Lesser Issues After Achieving Your Primary Goals
    3. Knowing When To Walk Away Without A Deal - Remember your BATNA?
    4. Documenting the Agreement
      1. Contracts
      2. Service Level Agreements (SLA's)
      3. Project Logs
    5. Leaving the Door Open for Next time
    6. Lessons Learned
    7. Follow up as agreed upon
    8. Report to Stakeholders
  8. Project Procurement Management
    1. Contract definition
    2. Six Processes to Procurement Management
  9. Plan Purchases and Acquisitions
    1. Definition and Objectives
    2. Factors to consider
    3. Metrics to Evaluate Seller Selection
    4. Standardized Procurement Documents
    5. Coordinating procurement with other project management aspects
    6. Establishing form and format of Statement of Work (SOW)
    7. Lead Times
    8. Schedule Dates
  10. Plan Contracting
    1. Definition and Objectives
    2. Procurement Documents to seek Proposals from Sellers
      1. Description of desired response
        1. Consistent for comparison from Sellers
        2. Flexible to look at alternatives from Sellers
    3. Evaluation Criteria
  11. Request Seller Responses
    1. Definition and Objectives
    2. Process to get proposals
  12. Select Sellers
    1. Definition and Objectives
    2. Selection Criteria
  13. Contract Administration
    1. Definition and Objectives
    2. Contract Contents
    3. The Process
    4. Contract change control systems
    5. Buyer conducted performance reviews
    6. Inspections and Audits
    7. Performance reporting
    8. Management of the Contract Relationship
    9. Review and document Seller Performance
    10. Establish and Manage Corrective actions
    11. Payment System
    12. Claims administration process
    13. Records management system
  14. Contract Closure
    1. Definition and Objectives
    2. Contract file
    3. Closed contract
    4. History
    5. Deliverable acceptance
    6. Lessons learned
  15. Follow-up Issues
    1. Monitoring Agreement Compliance
    2. Setting up the Process
    3. Effective Tools
    4. Needed Personnel
    5. Project Documentation
  16. Conclusion
    1. Review Major Topics/Issues
    2. The Role of PMI in “Real-world” Projects
    3. Participants Critique Class



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