2-38.2 Prepare for Negotiations

Almost all successful negotiations are the result of preparation. Before entering a negotiation, the CO and purchase/SCM team should:

• Have comprehensive knowledge of the marketplace (generated by market research).
• Have comprehensive knowledge of the supplier.
• Have thorough knowledge of the goods or services to be supplied.
• Have thorough knowledge of the price of goods or services to be supplied (generated through price analysis).
• Understand the Postal Service’s leveraging power.
• Understand the supplier’s leveraging power.
• Analyze involved costs (generated in Section 2-7, Conduct Should-Cost Analysis).
• Understand the supplier’s capabilities (generated in Section 2-35, Conduct Supplier Capability (Technical and Financial) Analysis).
• Understand the TCO.

The next step is to establish the Postal Service’s negotiation strategy incorporating this information. A negotiation strategy is formally planned and requires the generation of all Postal Service objectives, any remaining points of conflict, their importance in determining best value, and the strategies that will be used to address them.