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CHAPTER 7
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.
A7.1.6 NET RESULT
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.