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Mutual Gains Negotiations
Mutual Gains Negotiations is a collaborative approach to negotiating contracts. Rather than the adversarial approach (win-lose) the mutual gains process involves a consensus-building, win-win approach. In order for mutual gains negotiations to be successful, the parties need to have a shared understanding of the project scope and complexity, agree to the goal of a mutually beneficial solution, and the parties must trust one another.
Mutual Gains Negotiations are based upon the following five principles:
1. Identify Interests – each party to the negotiations should identify their own interests and try to understand the other party’s interests. Interests are defined as needs, concerns, motives, goals or objectives.
2. Consider all Options – Be creative and consider all options to finding a mutually acceptable solution that meets the interests of both parties.3. Develop Standards or Criteria – Use of standards and established criteria assist with consensus building by keeping the discussions focused upon fact rather than opinion. One example is the staff hour estimating guide currently under development by the Task Force.
4. Understand Your Alternatives – Each party in the negotiation should determine their Best Alternative to the Negotiated Agreement (BATNA). What is the fall back position if the negotiation fails?
5. Build Relationships – Remove personal problems from the negotiations and focus on the business aspect. One of the goals of mutual gains negotiations is to build and strengthen relationships between PennDOT and consultants. All parties should strive for open and honest communication during negotiations. If the communication is straightforward and based upon fact, not opinion, the relationship will grow even if the negotiation fails.
In order for Mutual Gains Negotiations to be successful, both parties must work together to ensure they have mutual expectations of the scope of services, project complexity, and deliverables before staff hours and a price proposal are generated. To assist with this effort, the Task Force is developing standard procedures for mandatory Scope Clarification Meetings as the first component of this new process.
The second component of the negotiations process is the development of a Staff Hour Estimating Guide. The Guide will establish a range of effort for engineering and environmental tasks. The Task Force is, at this point, focusing their efforts at developing a Staff Hour Estimating Guide for all W.B.S. codes for Preliminary Design.
The following graphic illustrates how the new process is anticipated to work:
