WES Trainings

Contract Negotiation & Purchasing

Course Outline

Day - 1

Introduction to Contract Negotiation and Procurement

  • Overview of the Procurement Process
    • The procurement cycle: Identifying needs, supplier selection, negotiation, contracting, and performance management
    • The role of contract negotiation in procurement and supplier relationships
    • Understanding procurement strategies: Cost leadership, differentiation, and value-based purchasing
  • Types of Contracts
    • Fixed-price contracts, cost-reimbursement contracts, time-and-materials contracts
    • Choosing the right contract for your procurement needs
    • Key elements and clauses in a contract: scope, terms, deliverables, timelines, and penalties
  • The Legal Framework for Contracts
    • Basic contract law principles: Offer, acceptance, consideration, and enforceability
    • Understanding the legal risks in procurement contracts
    • Standard clauses in contracts: force majeure, dispute resolution, confidentiality, warranties, and indemnity
Day - 2

Key Principles of Negotiation

  • Negotiation Fundamentals
    • What is negotiation? The negotiation process and stages
    • Types of negotiation: distributive vs. integrative negotiation
    • Setting clear objectives and defining negotiation goals
  • Preparing for Negotiation
    • Researching your supplier and understanding their position
    • Gathering data: pricing trends, supplier performance, and market conditions
    • Developing a negotiation strategy: BATNA (Best Alternative to a Negotiated Agreement), ZOPA (Zone of Possible Agreement)
  • Negotiation Tactics and Techniques
    • Effective negotiation tactics: anchoring, framing, and bundling
    • Negotiating for value: win-win vs. win-lose negotiations
    • How to handle resistance and difficult suppliers during negotiations
    • Closing the deal: Finalizing the agreement and ensuring long-term collaboration
Day - 3

Analyzing Contract Terms and Conditions

  • Key Terms in Contract Negotiation
    • Understanding pricing clauses: discounts, payment terms, and payment schedules
    • Delivery terms: Incoterms, timelines, and penalties for delays
    • Performance clauses: Service Level Agreements (SLAs) and Key Performance Indicators (KPIs)
    • Risk-sharing clauses: liability, insurance, warranties, and indemnification
  • Identifying and Avoiding Common Pitfalls
    • Ambiguous language and its potential for disputes
    • Risk management strategies to mitigate legal exposure
    • Ensuring the contract reflects the true intent of both parties
  • Negotiating for Favorable Terms
    • How to negotiate payment terms that benefit your organization
    • Structuring contracts for flexibility and scalability
    • Building risk-sharing clauses that benefit both parties
    • Monitoring contract compliance post-signing
Day - 4

Managing Supplier Relationships and Contract Performance

  • Building Strong Supplier Relationships
    • The importance of trust and collaboration in supplier relationships
    • Managing expectations and communication for long-term success
    • Establishing collaborative problem-solving mechanisms with suppliers
  • Contract Management and Compliance
    • Best practices for post-signing contract management: Monitoring and enforcing terms
    • Managing changes to the contract: Amendments, renewals, and extensions
    • How to deal with disputes and breach of contract issues
  • Performance Monitoring and KPIs
    • Setting clear expectations: Key performance indicators (KPIs) and Service Level Agreements (SLAs)
    • Regular performance reviews and feedback mechanisms
    • Corrective actions and conflict resolution strategies
Day - 5

Cost Control, Budgeting, and Risk Management in Contract Negotiation

  • Cost Control and Budgeting in Purchasing
    • Budgeting for procurement and controlling purchasing costs
    • How to negotiate for lower prices without sacrificing quality
    • Effective cost-saving strategies in contract negotiations
  • Risk Management in Contract Negotiation
    • Identifying and assessing risks in procurement contracts
    • Structuring contracts to minimize risk exposure (force majeure, indemnification clauses)
    • How to navigate political, economic, and supply chain risks
  • Ethics and Transparency in Procurement
    • Ensuring ethical standards in negotiations and contract management
    • Avoiding conflicts of interest and maintaining transparency
    • Building a culture of accountability and fairness in procurement processes
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