So, You Negotiate US Government Contracts...

As a US Government contracts manager in the late 1970s at a small but highly visible defense company providing critical counter-jamming radar equipment to the Department of Defense for its state-of-the-art fighter jets, I was thrown into the fire on week one and told to negotiate a contract with the Government of Israel. That day, the US Secretary of Defense and other high-ranking members of the US defense community were roaming the halls of our company. I was intimidated to understate as a mid-20-year-old in my first “real” job.

I walked into the negotiating room, sitting across from military-garbed, middle-aged contract negotiators from Israel and their counterpart technical engineers, note-takers, pricing reps, and others who just looked on. My side consisted of one tech type and me, a first-week employee.

Though I didn’t know it then, most of the details for this sale of encrypted radar equipment were already worked out by people much above my pay grade. But, in my mind, I had to get $10M dollars for this sale from the Israelis as instructed by my boss. Looking back, this may have been a test by my employer.

While sitting at the negotiating table, after I stopped shaking, I learned a valuable lesson about negotiating Government contracts: when outmatched by much more experienced negotiators, rely on your intuition during the negotiations, not your intellect. It worked—got $14M for the deal.

This article provides a few elementary suggestions for negotiating to a successful conclusion when outnumbered during a government contract negotiation.

YOUR DEMEANOR

The best negotiator is not necessarily the smartest person at the negotiating table but the person whose intuition and empathy are best honed. Realize that as the chief negotiator on a Government contract will, for the next few hours, days, or weeks, create a self-image, enhance or confirm the image of the product to be procured, and showcase the image of your company in a confined, sanitized, high-pressure, enveloped environment. If you are outnumbered by much more experienced negotiators, this image is totally controlled and created by you, irrespective of the skills of your opponent. This is one of the few things in this negotiating environment that you totally control as the chief negotiator on your side. Stay positive about the product and your company, no matter how insecure or underwater you feel during the negotiations.

QUICKLY SENSE YOUR OPPONENT

Determine what is important to your opponent, the procuring chief negotiator: price, tech specs, spare parts availability, the financial viability of your employer regarding follow on work, ease in product modification, or something else? Once you understand what is important, initially focus on that specific aspect of the negotiation to simplify the process, i.e., what is important to the buyer?

This initial determination somewhat levels the playing field because now, you can now dismantle any misconception held by the buyer one small part at a time in order of importance.

Focus on what you determined to be the important parts of the deal. It’s OK if you’re wrong about what is important to your opponent because you are still moving the negotiations forward by getting to know the others around the table while at the same time earning their respect for your singular initial focus.

Try to feel what is happening in the negotiating room. Move your opponent slowly using calming, disarming language. Be methodical while addressing this singular part of the deal. One part of the deal at a time will not overwhelm you compared to a shotgun, multifaceted approach that your negotiating opponent might push. Break down or, best yet, initially avoid any part of the negotiation that YOU think might lead to an impasse—save that part for later after establishing some credibility.

YOU’RE OUTNUMBERED

Keep an eye on the prize, which in my case was the $10M directive provided by my boss. Use the technical expertise of your opponent to your advantage. Ask questions! How did the buyer decide that the price for this item should only be $8M, not $10M? Let the lopsided part of the table (your opposition) answer your questions to avoid the inquisition that might be coming your way because you are outnumbered.

Ask questions! Try to use your opponent’s technical expertise about the product to determine why the buyer is interested in your product, speed, performance, or your company’s reputation for on-time delivery. Why is your opponent attracted to your product? Hone down any objections using carefully worded, probing questions. Use your opponent’s expertise to your advantage. Probe, listen, comment.

THE BEST AND FINAL OFFER

The goal is to get your opponent to make an acceptable “best and final offer” based on the positive product and company image you’ve created during this protracted negotiation, as well as your opponent’s desire to have the product (critical or just convenient). Ask yourself repeatedly during the negotiation, “Why is this buyer drawn to our product?” The “best and final” dollar amount many times reflects this need-based spectrum instead of pure negotiating talent.

CONCLUSION

Negotiating when outnumbered can be overwhelming, but following the elements provided in this article will help make the process easier for you. You don’t need to be the most intelligent person in the room or have an army of negotiators to realize an acceptable “best and final” offer. You merely need to understand your opponent, ask probing questions and use your opponent’s expertise to quickly figure out why this product is attractive to your opponent. Is the need for the product critical or merely convenient? If merely convenient, be ready for a long day!