This series of FAR summaries is meant to take a meaningful portion of the Federal Acquisition Regulations to ensure an easy-to-understand approach to maintain that readers comprehend the approach to doing business with the government and that the government exercises a fair and reasonable approach to doing business with the general public.
FAR 15.405 Price Negotiation
Your Contracting Officer compares what is offered to the government with the commercial marketplace and the federal arena. They have robust technology and subject matter experts at their disposal. Negotiation stances as well as negotiated points are rationalized and documented.
The government’s main goal is the sticker price. Although, they may negotiate components of that price depending on what’s being proposed. Contract type and price work together to come to an agreement. The most popular contract type in the government is a firm fixed-price contract which economic price adjustments can be added. The goal of the CO is to obtain goods and services at a discount from the commercial price. Their goal is not to drive any vendor out of business by negotiating a price where money is lost. Remember, they are the biggest buyer in the world. That benefits you, too.
Profit is the goal of the offeror. It is not the goal of the government. Contract type and price are. That’s because your tax dollars do the spending and that’s why job creation is so important. Uncle Sam needs money and his neices and nephews have basic and even special needs that need be met on a daily basis.
The government has multiple layers of review for the CO’s negotiation stances on everything that is being negotiated. They have present a second set of eyes and ears at least one level above the warranted CO doing the negotiating. Then all rationale is reviewed at least twice. This includes the final proposal revision document that is the vendor’s final chance to back out or the CO’s last chance to fix a typo or misunderstanding on what was agreed to.
This is not supposed to be intimidating for anybody. However those in-house reviews and real time corrections at the negotiation table can be at first. I assure you that!
By the end of my tenure in the government I was recognized as a fine negotiator. I did not start out that way! I recall my first negotiation where I honestly used the phrase, “Let’s spice things up a little bit!” when discussing a quantity discount on a medical supply contract. I really am not sure where I learned that. It wasn’t at the VA Acquisition Academy and it wasn’t even trading baseball cards with the neighborhood Frank Thomas aficionado turned retired Air Force veteran, my twin brother or my neighbor who now works construction but had a strong affinity for Barry Bonds ball cards as a child. The redneckery just popped out of my mouth. Multiple commas have a tendency to do that initially.
I will take the time and effort to make sure you head to contract negotiations comfortable and confident as to what will be discussed. Come December 2023, I can negotiate for you, but I can’t give you a one-hundred percent guarantee you will be awarded. Although, I am most comfortable with VA FSS contracts, I have been approached with straight buys. I can assure you that it is ok to be nervous. I was once or twice, too!
If you think I can help you then email nicholas.s.robertson@outlook.com for your introductory email and free consultation.
RobertsonKX Business Blog 