Contract Procurement : Contract Negotiations : Other Negotiation Considerations

Other Negotiation Considerations

In negotiating the contract, consider more than price. Take into account:

  • consultant's technical approach
  • how the consultant's management approach relates to your authority as the CM
  • how the consultant will be paid
  • consultant's explicit reporting responsibilities
  • all applicable laws
  • final contract language (it should reflect all agreements reached)
  • the detailed Department Cost Estimate

A contract involves rights and responsibilities of both Caltrans and the consultant. Caltrans’ obligations must be specified as clearly as those of the consultant. For example, the contract may obligate Caltrans to:

  • provide information
  • review and approve work products
  • accept and pay for goods and services

When negotiating an A&E contract, also make it clear that:

  • At the negotiation session, the consultant typically submits a proof of insurance.

    No fee or markup is allowed on other direct cost items or subconsultant work.
  • Classifications and rates must be listed in the Contract Cost Proposal.
  • Other direct costs (ODC) not listed in the Contract Cost Proposal cannot be reimbursed to the consultant. ODCs listed on the cost proposal are subject to review and approval by Audits. They should be kept to a minimum and, if allowed by Audits, are subject to review during negotiation.

If the negotiations team cannot reach an agreement with the top-ranked consultant, the team terminates the negotiations. New negotiations begin with the consultant ranked next highest. This process is repeated until a contract is successfully negotiated.