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Mutual Gains Negotiations

Mutual Gains Negotiations. Training Outline. January 16 2013. What Is Mutual Gains Negotiations?. Mutual Gains Negotiations is a collaborative approach to negotiating contracts, involving a consensus-building team approach to developing scope and associated level of effort. Course Objective.

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Mutual Gains Negotiations

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  1. Mutual Gains Negotiations Training Outline January 16 2013

  2. What Is Mutual Gains Negotiations? Mutual Gains Negotiations is a collaborative approach to negotiating contracts, involving a consensus-building team approach to developing scope and associated level of effort.

  3. Course Objective • Gain a useful and practical understanding of concepts of the Mutual Gains Negotiation process, strategies, techniques, and purpose • Develop the ability to apply Mutual Gains concepts and techniques to Consultant Agreements and everyday negotiations

  4. What Is Negotiation? • Negotiation is a dialogue between parties, intended to reach an understanding, resolve differences and produce an agreed upon course of action • Negotiation protects the interests of all parties • Negotiation is a critical step toward the successful completion of any Project

  5. Negotiation Is NOT…. • A contest or game • A method of determining a winner and loser • A means of carrying out a personal vendetta or grudge • A “one-size fits all” formula

  6. Negotiations Fail When: • Mutual agreement is not achieved • Preconceived arguments or positions enter into the process • Focus on advancing the Project is lost • Relationships are damaged

  7. Why Negotiations Fail • We let “what we have always done” dictate what we do today • Negotiations are viewed as a trade-off process (zero-sum) • Parties give in to the three “E”s: Ego, Emotion, Escalation • Parties never develop a systematic approach to negotiation

  8. Three Areas Of Negotiation • The Process- how we go about our negotiation • The Substance- what we are negotiating for; what we see as the task at hand • The Relationships- often overlooked, and underestimated, and regularly the first thing sacrificed

  9. Traditional Negotiations • Establish extreme positions: always start at one end or the other and work toward the middle • Always be skeptical of the other side • Becomes a contest of wills, strains relationships • If you concede, concede reluctantly

  10. Mutual Gains Negotiations • Focus on and explore all options to achieve set goals • Produce agreements that benefit all parties • Improve and sustain healthy relationships

  11. How To Achieve Goals Of Negotiation • Focus on interests- not positions • Interest: “We have to really watch our budget” • Position: “There’s no way we are going to pay more than…” • Use agreed upon tools to evaluate interests • Recognize your Negotiation Limits (NL)

  12. A New Model Steps To Mutual Gains • Preparation • Create value • Agreement

  13. Step 1: Preparation • Define your team • Estimate your Negotiation Limits • Define your interests • Try to estimate their interests • Prepare options that could benefit both parties and achieve set goals

  14. Define Your Team • What is my role in the negotiation, and who will assist me in the process? • Who will gather what information? • Who will participate in the negotiations? • Who has the authority in the negotiations?

  15. Estimate Your Negotiation Limits • What is your Negotiation Limit? • Your NL is the point at which you walk away • Both parties have an NL • NLs are not negative, no hard feelings if NL is exercised • No party should be forced into a contract with which they cannot live

  16. Focus On Interests What Are Interests? • Interests are the reasons for positions • Interest: “We have to really watch our budget” • Position: “There’s no way we are going to pay more than…” • More than one option can fulfill a particular interest

  17. Focus On Interests • Identify the interests of all the stakeholders • Analyze and prioritize the interests • Identify conflicting and compatible interests to establish common ground

  18. Estimate Interests Ours (Compatible)

  19. Prepare Options For Mutual Gains • Think about negotiations in a different light • Brainstorm, invite outside suggestions, be creative • List all options without passing judgment-using positive statements (recognize the down-side, but emphasize the up-side)

  20. Step 2: Create Value • All parties bring ideas and suggestions that add value to the project • Suspend criticism and judgment • Discuss the interests

  21. Suspend Criticism • Listen • Evaluate without criticism • Remove the person from the idea • Evaluate ideas from the Project’s perspective

  22. Discuss Interests • Communicate the interests in a clear and concise manner • Confirm what you believe compatible interests may be • Take careful notes • Focus on the Project interests, not personal positions

  23. Step 3: Agreement • Develop the relationship and build trust • Utilize agreed upon tools • Solutions

  24. Develop The Relationship • Agree to focus on project interests • Honesty builds trust • Listen to their views and interests • Take a partnering approach

  25. Utilize Agreed Upon Tools • Utilize objective standards for staff hour development • Market value, historical data, indices, averages, etc. • PennDOT/ ACEC/PA Staff Hour Estimating Guide (Guide) • Develop criteria to support the Project’s interests

  26. Staff Hour Estimating Guide What it is What it is not How to use the Guide

  27. The GuideWhat it is Provides guidance for estimating levels of effort Provides a list of WBS Codes, staff hour ranges, and basis for the ranges Should cover 80% of project scenarios encountered Captures agency/consultant institutional memory A starting point in negotiations

  28. The GuideWhat it is NOT Not a magic bullet Not a substitute for mutual determination of project scope, complexity, schedule, or deliverables Not the final answer in negotiations

  29. The GuideHow to Use it Read and Understand the Introduction to the Guide found in Pub 93, Appendix 3G The Guide (the current/official version) can be found in the ECMS References/ File cabinet Agree with your Project partner on scope, complexity, schedule and deliverables

  30. The GuideHow to Use It Refer to the Guide for specific WBS tasks and the starting range of hours Share your hours estimate with your project partner Conduct Negotiations

  31. Example No. 1 The Project is a suburban roadway with major drainage features and utilities Let’s look at Cross Sections

  32. Example No. 1 2.4.5 Preliminary Cross Sections

  33. Example No. 1 2.10.4 Cross Sections This task is a continuation of the Preliminary Cross‐Section Task

  34. Example No. 1 Preliminary Engineering: the starting point for negotiations is 2 hrs/section Final Design: the starting point for negotiations is 2 hrs/section During the Scope Clarification Meeting, the project partners will have agreed to the number of sections, detailing required, etc…

  35. Example No. 2 The Project is a suburban roadway, with 1000 feet (each side) of approach work for a bridge replacement No detours are anticipated, nor temporary signals, but EMS coordination is expected Let’s look at Maintenance and Protection of Traffic

  36. Example No. 2

  37. Example No. 2

  38. Example No. 2 Preliminary Engineering: 15-25 hrs/sheet x 1 ¼ sheets = 19-31 hrs + 8 hrs for EMS coordination 27-39 hrs is the starting point for negotiations Final Design: 25-35 hrs/sheet x 1 ¼ sheets = 31-44 hrs + 8 hrs for EMS coordination 39-52 hrs is the starting point for negotiations

  39. Example No. 3 The Project is a single span 75 ft. long bridge structure, two lanes, tangent section roadway, with approach slabs BRADD is to be utilized in design, there is no skew and the bridge is constant width Let’s look at Bridge Geometry

  40. Example No. 3

  41. Example No. 3

  42. Example No. 3

  43. Example No. 3 Preliminary Engineering: the starting point for negotiations is 10 hrs for Bridge Geometry Final Design: 64-96 hrs (low to high range) + 16 hrs ( 8 hrs/approach slab) + 8 hrs for construction staging 88-120 hrs is the starting point for negotiations

  44. Solutions • Develop solutions that are fair to both parties • Work to improve each suggested solution • Agree upon solutions that achieve the set goals

  45. Strategies For Success • Focus on problem solving • Reveal all parties’ interests • Analyze common interests and conflicting ones • Ask why (why not) to overcome past positions and focus on interests • Suggest options without committing (what if)

  46. Strategies For Success • Foster cooperative atmosphere • Discuss process and logistics before substance • Be creative

  47. Strategies For Success • Ensure your interests have legitimate criteria • Identify and examine all assumptions • Respond to rational discussion, never to pressure

  48. PennsylvaniaDepartmentofTransportationCERTIFICATEOFCOURSE COMPLETION This will certify that I have completed the online Mutual Gains Negotiations training. ORGANIZATION: ________________________________________________ STUDENT’S NAME (PRINT): _________________________________________________ DATE COURSE COMPLETED: _________________________________________________ STUDENT’S SIGNATURE: _________________________________________________ * Please print out this certificate and retain for your records

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