Contracting – Is Your Agency at Risk?
Head Start agencies rely on countless contractors and subrecipients to help them fulfill grant responsibilities. Many agencies do not realize that contracting is rife with pitfalls for the unsuspecting grantee.
Good contracting starts at the beginning – with effective negotiation of contract terms. Many Head Start agencies view contracts as “take it or leave it.” But Head Start agencies can – and should – carefully scrutinize the terms of a proposed contract and request that terms be modified where appropriate.
To be effective at negotiating strong contracts, keep these tips in mind:
- There is no substitute for preparation. Before approaching potential vendors, decide what your agency wants to get out of the deal. Also identify your bottom line – the points that are non-negotiable for you. Identifying key points in advance will ensure that they aren’t forgotten in the thick of the negotiation.
- Step into the shoes of the vendor. To be an effective negotiator, you must be able to anticipate the key points that are likely important to the vendor. You can use these points for leverage to bargain for provisions that are important to your agency.
- Negotiate, don’t obliterate! Remember that your goal is to agree upon terms that are mutually beneficial to both parties. Negotiating one-sided agreements will lead to frustrating business relationships and a greater risk of conflict.
- Preserve good relationships. You can stick to your guns without getting personal. After all, the end goal of the negotiation is to enter into a productive business relationship. You don’t want to start off on the wrong foot because your negotiation tactics were unfair.
Want to learn more about negotiating, drafting, reviewing and monitoring contracts? Check back for more blog posts coming soon. Also, FTLF is offering a new contracting academy webinar series starting in early October! The series will include a negotiation exercise where participants will receive top-secret non-negotiable terms and will attempt to secure those terms in a negotiation with a fellow participant. Register here!