Contract Procurement : Contract Negotiations

Contract Negotiations

The negotiation date is specified in the RFQ and the DPAC scheduler sends out written notification of the negotiation date and time to the top-ranked firm after the interview. Within Caltrans, contract negotiation occurs only in the A&E RFQ process. Negotiation involves refining the final elements of the proposed contract. The DPAC A&E coordinator, with assistance from the CM, is responsible for negotiating the contract.

Procurement portion of the A&E Process Flowchart
Click Image to Enlarge

When negotiation is complete, a draft contract package acceptable to both parties should be in place. Win-win outcomes are part of a successful negotiation.

Items that are negotiated typically include:

  • direct cost items, annual salary increases, and fee
  • classification and experience level of personnel to be assigned

For FFP cost proposals, the additional negotiable items include:

  • schedule (hours and quantities)
  • products to be delivered under milestones established

The A&E Coordinator is responsible for making sure the cost proposal represents a fair and reasonable deal for the State in accordance with GC 4525 and Department regulations. Other details that are scrutinized include:

  • overhead components
  • prevailing wages
  • salaries
  • exempt/non-exempt status
  • consultant's accounting practices
  • consultant's negotiation history

In addition, the contract term and amount are discussed and may be altered slightly to meet the changing needs of the Department.

Shaking hands
Negotiation = Go for the win-win