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How Local Governments Can Negotiate Better Contracts

It is often said that negotiation is an art form and a skill that must be carefully honed with diligent practice. Unfortunately, for government agencies and other public sector organizations with rather tight budget constraints, it may not be entirely realistic to devote the resources and personnel hours to developing this craft. In addition, brief timelines and expectations for immediate action often hinder local governments from bargaining effectively. But, this inability to haggle for the best deal can end up costing the government a lot of taxpayer dollars when they are subjected to overly expensive and/or inefficient contracting arrangements. Here is how local governments can and must negotiate better contracts:

Don’t Procrastinate

These days, everyone in pretty much every office environment likely feels overworked and overwhelmed. Unfortunately, this feeling often causes personnel to avoid doing work altogether, as it can be difficult to know where to even begin. Distractions and procrastination are generally a pretty big problem in the overall workforce, but it seems especially prevalent in the public sphere. This, in turn, causes other issues with the ripple effect eventually slowing down entire segments of a local government’s operations.

One of the only ways to ensure that a government is getting a good contract for the provision of some good or service from a private firm is by proactively seeking the right partnerships. Rather than wait for a company to approach on the basis of a bid or request, the local agencies engaged in frequent or high volume contracting must be savvy enough to assess the pool of prospective firms and target those that will add the most value to the arrangement. Granted, this may seem like a lot of work on the front end, but this kind of diligence from the outset pays off handsomely in the long run.

Don’t Assume

Because the government is not in the business of making money, there are a lot of assumptions as to what does or does not matter and what will or will not be tolerated. Obviously, in the private sector, the number one goal is to generate revenue, so this drives the entire contract management process. In government, on the other hand, the primary goal is to deliver services to the public and to protect the health, safety, and welfare of those taxpaying citizens. However, this does not mean that government agencies cannot or should not focus on efficiency and productivity, or tap into innovative technology, such as CLM software.

In fact, it is crucial that government agencies and workers not succumb to the idea that these things are less important because the ultimate goal is not about dollar generation. One of the biggest benefits of improving operational efficiency is that it saves incalculable time and resources. By ensuring that a solid contract is negotiated, drafted, and administered, there will be more time to spend on matters in which there simply will not be control, such as responding to natural disasters or other catastrophic situations. Contracts should facilitate operations, not hinder them.

Don’t Settle

Sometimes government agencies get too bogged down in dealing with their own rules and regulations that they do not have the time or inclination to change things. Maintaining the status quo may work for some operations, but it is not acceptable in the contracting world when the norm is complete chaos or inefficiency. Unfortunately, some private firms that contract with the government take advantage of the fact that they probably will not lose the business because they know that the government can only provide so much oversight.

The key here is for local government agencies to recognize this potential exploitation and to do whatever it takes to stop it before it becomes too difficult to overcome. Again, this will take some time to address, but proactive corrections are always preferable to reactive clean up. And, just because the local government is somewhat hindered by a tight budget and limited resources does not mean that it should have to settle for mediocrity.

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