Eskom Procurement Book 2015

NEGOTIATION

response from the supplier that “give us 25% upfront and we’ll do the job for R2.56 million”. Not surprisingly, this was agreed upon. Once the above package had been sealed, the issues of retention, performance bond and final payments were settled without argument at the levels suggested by Company A. Company A obtained the right supplier at a price well within budget. The negotiating team had to work with finance to free up funds for the upfront payment, but this was considered a minor issue owing to the short-term nature of the project. Supplier X solved its cash flow issues and secured the job at an acceptable price. More importantly, the supplier positioned itself as the first-choice supplier for similar work with Company A, and continues to reap the rewards of the on- going relationship to this day. This negotiation could have ended quite differently if the parties approached it as win-lose. Company A would have contracted a potentially lower-standard supplier and would have had to start a new search process for the next project, and Supplier X may have faced foreclosure and receivership. The success in this case was based on excellent planning on both sides and a win-win strategy on the part of Company A that Supplier X endorsed.

A7.1.6 NET RESULT

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