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Need Help - Negotiations

 
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TTBooooda

Jul 28, 08 4:58

Post #1 of 14 (240 views)
Need Help - Negotiations Can't Post
Being an engineer/project manager, I design, build etc and rarely have to fight for what i want with vendors, contractors, etc. I occasionally have to push and shove internally to prove a point, but the work under our group is taken seriously, so most don't argue.

I've got a landlord that i'm 'working' with that is mandating certain work be done on a project. This work is adding hundreds of thousands to my cost. Money i could put to better use else where. We asked nicely time and time again to drop the rdiculous requirements, but they're not budging.

Fight time.

I need to negotiate or talk my way out of these requirements he has leveled on me.

Any good advice on how to get what i want?

Thanks
Scott


slowbern

Jul 28, 08 7:36

Post #2 of 14 (211 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
Any good advice on how to get what i want?

Simply increase the cost of the job. If the guy wants it done a certain way, make it worth your while to do it that way. Eventually, you will hit a price that the customer either doesn't want to pay OR he will alter his requirements.

Contractors will often do this with small jobs that are a bigger pain than they are worth. Big jobs have a bigger profit margin (usually) because you can leave equipment, reduce clean-up costs, etc. Smaller jobs have extra work involved because of the set-up and take-down time that has to be done on every job regardless of how big it is. An example. If you need to have a concrete job (maybe a yard or two poured for a walkway) you might end up paying $250-$300/yard to have it poured and finished. But the same guy might come in and do a 15 yard driveway for $150/yard.

Bernie


_______________

There, Sphere, are you happy?


dreaming~big

Jul 28, 08 8:25

Post #3 of 14 (194 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
you don't have a contract?


David in FL

Jul 28, 08 8:28

Post #4 of 14 (191 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
Bernie's got it.

Assuming there was an agreement/contract for the original project, what the LL is requesting represent a change to that and should be addressed as such. I'd complete a change order outlining the additional work to be done and the cost for that work. Then send it to him for signature/approval. You'll either get reimbursed or he'll decide that the changes aren't all that important. Either way, you win.


"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in a grey twilight that knows not victory nor defeat."

Theodore Roosevelt


TTBooooda

Jul 28, 08 8:51

Post #5 of 14 (180 views)
Re: Need Help - Negotiations [dreaming~big] [In reply to] Can't Post
kate, bern, David,

i'm trying to be vague about this, as you never know who's watching.

We are in the contract stage right now. In order to expedite things along, we do much of the engineering now, and submit for bids. This is job that my company wants to do, but the land lord wants certain construction aspects thrown into the mix, which i'll end up paying for.

I apologize. It's difficult to talk about with out divulging a lot of info. Thanks for the help.


banana

Jul 28, 08 9:09

Post #6 of 14 (174 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
You need to really understand why the are requesting this and what their risk profile is. Are they asking because they had a situation on a similar project? You need to dig a little bit. Crazy requests usually come from somewhere. If you understand their side, then you will be able add language to the contract to deal with this. I know, it's easier said than done. Each side is able to carry a different amount and type of risk. Every word in the contract has a $ value assigned to each by each party. Those $ values could be considerably different for each side.

I have the same job as you (Eng/PM) and I went through something similar earlier in the year.


David in FL

Jul 28, 08 9:16

Post #7 of 14 (168 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
Since you're at the negotiation stage, I assume a final price hasn't been agreed upon, right?

Can you figure out why he wants it done this way? He obviously sees some benefit to doing it that way. One tactic would be to demonstrate to him how that benefit really doesn't exist, or at least doesn't provide enough benefit to him to justify the additional cost. Another might be to offer to give him what he wants at your cost, rather than adding additional margin into the bid, or offering to split the additional cost with him. To do that, he has to understand and agree that there's a real cost associated with what he wants done.....and you'll do it that way for less than anyone else will be able to.

Of course, your negotiating power is really tied to whether there's someone else who's willing to do the work that he wants, in the manner that he wants, for the same price. If that's the case, you're going to have to either suck it up, or be able to convince him that you provide additional value that's worth the extra $'s. Maybe better quality, quicker delivery, better service after the fact, etc.....

Ultimately, you're gonna have to decide if the job is worth the margin.


"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in a grey twilight that knows not victory nor defeat."

Theodore Roosevelt


Tridiot

Jul 28, 08 9:37

Post #8 of 14 (154 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
WHY is the customer asking for these things? Do they have a reason that to them is valid and worthwhile? Why do you see it differently?


If you make a clear and concise argument to the customer about why your use of the budget is better serving to their business needs, and they say no, then you're stuck because ultimately it is their money.


I've been on both sides of this situation before. I've had to talk clients out of decisions/restrictions/requirements that weren't in their best interests, and I've been a customer/client who listened to the advice of a service provider and ultimately said "No, do it my way".


If you can't develop an argument that would convince you if you were in the client's shoes, then give it up. But if you can talk to them in terms of saving them money, or providing them with something they and especially their own clients/customers will benefit from, it could work.

And ultimately, if you think their position is THAT bad, walk away from the deal.


dreaming~big

Jul 28, 08 10:16

Post #9 of 14 (139 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
are there other guys submitting bids, too? are you being held hostage for freebies as part of the bidding process? man, it would be difficult to be strong-armed like that, if that's what's happening. just part of the free market economy, i guess?


slowbern

Jul 28, 08 19:41

Post #10 of 14 (102 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
We are in the contract stage right now. In order to expedite things along, we do much of the engineering now, and submit for bids. This is job that my company wants to do, but the land lord wants certain construction aspects thrown into the mix, which i'll end up paying for.

If it were me (and remember, I really don't know what the f--- I'm talking about) I would try to submit a cafeteria-style bid where there are options so that the client knows exaclty what he is paying for.

For instance:

Base Job=$100,000

Extra stuff that would be good to have done my way=+$30,000

Nonsense that you, the client, want but don't really need and will really make the job much more difficult and expensive=+$175,000

Bernie


_______________

There, Sphere, are you happy?


TTBooooda

Jul 29, 08 4:50

Post #11 of 14 (80 views)
Re: Need Help - Negotiations [slowbern] [In reply to] Can't Post
I wear many hats. In this case, i am - A tenant, who is starting a construction project for our suite, I'm the engineering rep, the project manager, and the general contractor.

This is a project my company started, needs to get done. The landlord as well wants it done. The landlord has made a request that we install X. X will cost a couple hundred grand. This is out of my budget. I hire the contractors, and will pay them. The problem here is, if the LL says he wants X, and will not approve the work in his building until he gets X, i'm stuck.

But, using tid bits of info from yesterday, i did some more homework. We had a call yesterday with LL, and he's agreed to revisit his request. We explain the extreme cost of his request and how it will affect the project.

It's confusing and in the process of trying to be vague, it becomes more confusing.



Scott


David in FL

Jul 29, 08 4:55

Post #12 of 14 (79 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
The key here seems to be that "the LL wants it done too"...... That bodes well for you. Sounds like he's hoping to get some additional goodies just for asking in the hope that you'll dig into your deep pockets just to make it happen. I'll bet that if you lay it out and push back a little, the nonsense will go away. Good luck......


"Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure than to rank with those poor spirits who neither enjoy much nor suffer much, because they live in a grey twilight that knows not victory nor defeat."

Theodore Roosevelt


TTBooooda

Jul 29, 08 4:59

Post #13 of 14 (76 views)
Re: Need Help - Negotiations [David in FL] [In reply to] Can't Post
Right. The final out come after completion next year will be a big help for the LL. But the trade off and final outcome is what he is having an issue with.

The basic problem here is, i am very specific type of tenant that he hasn't had much experience with. He'll come around, it might cost me a few bucks, but not a couple hundred grand.


Thansk
Scott


72cuda

Jul 29, 08 10:52

Post #14 of 14 (55 views)
Re: Need Help - Negotiations [TTBooooda] [In reply to] Can't Post
As an aside, the best negotiators that I know ask a LOT of questions. They often make their point through the questions they ask, and not by making arguments. By asking questions, you learn what the other side is really interested in and why. Then you are in a better position to offer alternatives.