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Negotiating Terms and Conditions, Be Prepared

Sep 23, 2020

Terms and Conditions are the guides to performance and legality of a contract.  This area of negotiations is exceptionally challenging in public procurement.  For the most part, in the public sector, contracts are written to protect the public entity, not the vendor.   This becomes a challenge for some companies attempting to do work in the government space.  The ability to negotiate certain terms and conditions could be the difference between submitting a bid or not bidding or even winning contract.

Throughout my career I have been a part of negotiations, and have reviewed bids, where the entire Terms and Conditions section is crossed out.  You do not want to be arguing internally, or with the government, on terms that will not be negotiated. Instead, you should focus on writing a winning bid.

Here are some helpful guides to success:

    • Do your homework and get a copy of the State’s contract template in advance of doing business with them. You may have to submit a FOIA; however, most states will share that information without a formal request.
    • Find the terms you are struggling with and decide what you can live with.
    • Outline your ceiling and floor for the particular term(s) you want to negotiate, but keep in mind that some items are not negotiable. For example, indemnification and state IT security terms are difficult to navigate and are usually non-negotiable.
    • Remember government contracts are written to protect the government, not the vendor.
    • You are not dealing with just your lawyer, but the state’s attorneys as well.
    • By getting an idea early on what the state requires, and what you can live with, you can respond to RFPs quicker and with more focus on the deliverables and not standard Terms and Conditions.
    • Also, you do not want to respond to a bid by redlining a majority of the Terms and Conditions. When I was reviewing bids in my past job, this would be cause to throw out a bid.
    • Keep lines of communication open with the procurement office; get in early and start to understand how they negotiate.
    • Every contract stands on its own merits. So, if the government has agreed to a term in a previous contract, it does not guarantee that it will be agreed to in a new contract.

Use these guidelines as you review current and future business opportunities.  I believe by following these rules you will write better bid responses by focusing on the business at hand.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.