Ideally, the bulk of issues should be sorted out during the bid process. However, negotiations present the last opportunity to work through contractual issues and both sides may have saved issues to be dealt with at this last stage. The government side is often the less experienced of the parties at the negotiation table and it is vital that it be supported by appropriate advisory expertise, a clear negotiating strategy, and a fallback plan (which may be the second-place bidder).
Only critical personnel should attend negotiations and minutes of the issues covered must be kept. Negotiations have to be scheduled with sufficient time for preparation, and conducting negotiations in several rounds may be necessary.
Negotiations should not reopen items previously dealt with or should not undermine the integrity of the bidding process by deviating from the original proposal.
Part of the negotiations will focus on conditions precedent, i.e., the conditions to be met by both sides to declare the contract operational. The timetable and process for transition should also be discussed. These discussions will cover:
• Registration actions such as the legal incorporation or registration of any joint ventures or project specific companies,
• Payment of bonds and guarantees, and
• Worker transitions
- terminal benefits
- collective bargaining agreements
- transfer of terms of service
- redundancies.