Factors For Negotiating An Agreement And Evaluating Competitive Proposals

Objectives

Strategic decision-making process on an agreement helps in negotiating processes. There are various factors and steps involved during negotiation process including inter-state negotiation be inclusive and exclusive. Agreements involve mechanism of monitoring in the company and aimed at motivating compliance. There are full commitments required during agreements. However, sometimes it causes failures. Some factors that include during negotiating an agreement are as follows:

The objectives of the company and the party needs to be clear and concise before entering into any negotiations. The objectives of the company must be properly circulated between the second party members (Girth, 2014). The clear objectives of the agreement helps in understanding various terms, condition of the agreement, and contract. In the case of F&B Company, the use of clear narration of the objectives might help in negotiating with the client.

Data and information related to the agreements during negotiation helps in maintaining a clear objective pf the session. A clear analysis of the data and information related to the contract and agreement maintains a healthy atmosphere during negotiation (Cullen et al., 2017). A both way communication channel is created between the parties that maximizes the chances of positive negotiation. On the other hand, lack in the information may lead to arguments and quarrelling. An organized discussion can turn into aggressive behavior of participants of negotiations (Wibowo, Tjahjono & Tomiyama, 2016).

Negotiation is a process to bargain during an agreement has reached to two or more parties. It is rarely possible in negotiation for an agreement to reach immediately for each side to have identical objectives (Khan & Khan, 2013). Therefore, agreements are one where there is an availability of concessions and profitability for outcome. During an agreement, a party can explain their objectives and ideas and other parties are fixed to their goals. The concession provided during the negotiation needs to be properly managed and according to the profit of the company in the market.

The strategy planning is a vital factor for the negotiation in an agreement. A proper planning is required before entering into a negotiation. Planning helps in managing the negotiation in any worst case (Rendon, 2016). The strategy is based upon the requirement of the negotiation topic during an agreement between two or more parties. In the case of F&B Company, the company is indulged with the clients into an agreement. The planning is done for understanding the limits of the company during a negotiation in an agreement (Kogut-O’Connell et al., 2017). This helps in maintaining an ethical atmosphere among the participators of the negotiations.

The basic aim of the cost management is to create a link between the price and value and affordability in relation. The cost managers understands that they require to work for the benefits if the clients for the inception of the project and ensure best results out of it. However, it does not mean that cost manager acts as cost cutter of the company (Van Weele, 2014). The cost manager have to understand about the type of investment in the project. The cash-flow analysis helps the cost managers to go beyond the service for activating the concept of concept management. Organizations in both people in general and private divisions are expanding strain to costs and move forward money related and operational execution. In the case pf the MFB Company, the overall contract for renewal pf the natural gas supply has around 5% in profit (Oluka & Basheka, 2014). This amount can be maintain by a proper contract management policy established by the company. The developing acknowledgment of need to robotize and enhance authoritative forms and fulfill expanding consistence and diagnostic needs has moreover prompted an expansion in appropriation of more formal and organized contract administration strategies and an expansion in accessibility of programming applications intended to address these needs.

Information

There are various factors involving in the effectiveness of the contract management. These factors are discussed below:

This step is based on the design of parameters including cost of acquisition and management. It is also explained as cost design that help in designing a project in financial terms by taking in account related to cost and benefit of element.

The cost planning helps in allowing the developer to know about the outcomes of the project in earlier stages of the project. The cost planning include the anticipation of all the cost included in the project including cost of land, legal issues, buildings, professionals, tax and management. In the case of the F&B Company, the net price of the natural gas has been increasing (Zhang, 2015). This has caused alarming situation for the company in the market. The frequent change in the taxation policy have created undefined strategies for mitigating issues in the context. The increase in the price of the products have caused decrement in the interest of the customers in the market. The planning of all the cost of the company helps in maintaining the cash inflow and outflow form the company. The investment in the market becomes saturated (Cullen et al., 2017). This helps in maintaining the profit and loss of the company in the market. The use of the cost planning have maintained the estimating process of the company in the market that includes all benefits and its associated costs.

The cost control refers to the auditing process in the company. The cost control is an activity that focuses on the reactive reporting of decision results. The cost control happens by deployment process by briefing completion stage (Zou, Wang & Orgun, 2016). The benefits of the cost control is deprived in all stages by briefing, approved sketch plan, receipt of tenders and construction stages.

The cost checking is process for ensuring the client is informed with actual performance of company in the market. In this case, the F&B Company has able to inform their clients about the increase in the price of the products. Therefore, there has been successful implementation of the cost checking process in the company (Vyas, Hayllar & Wu, 2017). The actual cost of the natural gas has been increased that are detailed in the balance sheet of the company against the target cost and cost plan.

The cost-benefit analysis focuses on establishment of real benefit of expenditure and savings of the company. The benefit id discussed in terms of use of resources including energy, natural gas and human resources. However, this technique is not accepted by many organizations including F&B Company (Rendon, 2016). It is able to provide support for evaluating aspects having monetary value and intangibles including social benefits are separately decided on various objective terms.

Cost-Benefit – INPUT VALUES
Hardware	$         20,000.00
Software	$              950.00
Development team salaries	$           8,160.00
Training	$           1,500.00
Total Development Cost	$         30,610.00
Hardware	$         10,000.00
Software	$              209.00
Operational Labor	$         15,000.00
Total Operational Cost	$         25,209.00
Approximate salary savings	$       100,000.00
Reduced operating cost	$         40,000.00
Total Benefit	$       140,000.00
Discount Rate Used	3.00%

Figure 1: Cost benefit Analysis

(Source: Created by author)

The implementation of the project management factors in the MFB has helped in maintaining a proper contract with the clients. In this case, the contract of the natural gas has to be renewed with a company, the fluctuation in the taxation norms have created various challenges for the company in the market (Kogut-O’Connell et al., 2017). The company have to implement all the contract management factors for successful agreement of the contract. The cost design analysis of the company is necessary for amending the total cost of the production sector. The cost planning is required to implement various strategies in the planning cost of the company. GEP’s global energy experts identified the cost structure in NG manufacturing in Australia. Production and processing accounts for roughly 30 to 35 percent of the total cost, transmission and distribution accounts for about 40 to 45 percent, while gas retailing accounts for 15 to 20 percent of the total cost. The team also identified that the increasing use of shale gas and the increase in LNG exports have significantly affected natural gas prices in Australia. The planning is done to maintain the cash inflow and cost outflow of the company due to the contract. The renewal of the contract in the natural gas has been maintained to reorganize the profit of the company (Kravari,  Bassiliades & Governatori, 2016). However, due to the change in the taxation norms in Australia, the issues are reviling in the context. There are various steps involved in a successful contract management.

Concession

Step One: Explaining the contract plan to stakeholders

The contract plan is one of the important point in contract management for a company. It provides a roadmap to the contract for completing within time. The use of various factors used in the project planning are acknowledged to the other party in the agreement. This helps in maintaining a proper communication with the key stakeholders of the company. The stakeholders of the company contacts with the project manager for details about the contract. The contract plan comprises with all the components used in the contract. The amendment in the contract plan can be done by stakeholders based on profit of the company (Greenhalgh, 2016). However, in most of the case, the stakeholders are not affected with the requirements of the contract. The complex part of the contract is for getting into commitment for the agreement. Therefore, the involvement of the stakeholders in the commitment of the contract is necessary for its successful completion.

Step 2: Defining the roles and responsibilities

The roles and responsibilities of different employees in the contract has to be maintained properly. The stakeholders of the company have to be aware of these roles and responsibilities in the company. The natural gas contract in Australia is a major concern for the company. The contract has to be successful by defining the roles and responsibilities of the resources of the contract. A proper specification and requirement of the contract have to be maintained by the stakeholders of the company (Park & Kim, 2017). The preparation process of the specification has been drafting in the evaluation model of the contract that helps in maintaining information security and potential suppliers. Therefore, it is necessary that the communication process among the team is transparent. Thus helps in maintaining a transparency in the contract strategies.

Step 3: Defining Scope Statement

The scope statement of the contract helps in maintaining the foundation of the contract. The processes, terms and conditions of contract are written in scope statement of the contract. The scope statement describes about the outcomes of the contract. It also helps in creating the milestones and deliverables of the project. The F&B industry has been renewing its contract with the natural gas company (Dong, 2017). The use of the scope statement company maintains various aspects of contract.

Step 4: Analyzing risks and threats in contract

The risks involved in the contract are properly analyzed by the manager. There are various types of risks involved in the project. In this case, the natural gas contract has various risks including the natural risks. The storage of the natural gas is major risk for the company. The transport of the natural gas is also a risk (Hidayatullah, Ismail & Jaya, 2017). Therefore, these risks have to be mentioned and analyzed in the contract that helps in initiating the risk assessment process in the company. The probability of risks in the natural gas renewal project is high due to the inflammable product. The international demand and supply of the key drivers of commodity prices around the globe has been continuously fluctuating in the market.

Strategy

The commercial terms and conditions of the contract is an important element for the company. The MFB Company have to maintain the terms and condition of the contract for the signing in agreement. The applicability of the terms and condition is valid on the contract of the natural gas for this company. The renewal contract of the company has been reformed due to risks factors (Waugh, 2017). The purchasing order of the natural gas has been a critical role in maintaining the terms and conditions by the company in the market. There might be conflict between the terms of written agreement signed by both parties. This is maintained and monitored under the legal systems of the country.

The Place Order is an offer by Buyer to buy Goods and additionally Services from Supplier as per and subject to terms thus and in that. The Place Order is not official on Buyer until the point that it is acknowledged by Supplier (Pate & Scullion, 2017). Provider will be esteemed to have acknowledged Place Order when it (I) sends Buyer notice of acknowledgment in composing, (ii) begins to play out Services as per the terms of Place Order, as well as (iii) conveys any or the greater part of Goods secured by Place Order, whichever happens first. Placer may pull back Place Order whenever before it is acknowledged by Supplier. No agreement will exist aside from in this gave.

Supplier’s acknowledgment is explicitly restricted to Terms. Any proposition, statement of work, cite, receipt, affirmation or other correspondence issued by Supplier regarding, or generally consolidated by reference into, Place Order will be for motivations behind depicting in more noteworthy detail Goods as well as Services  to be given (Ismail, 2017). Additionally for record and bookkeeping purposes just, and any terms or conditions put forward in such correspondence would not have any significant bearing to Place Order and would not be thought to be Supplier’s special cases to these Terms. Any extra or distinctive terms proposed by Supplier  are questioned and dismissed and will be considered a material change in this regard, unless explicitly consented to in composing by Buyer (Clarke & Scurry, 2017). Moreover, Buyer would not be bound by, any “disclaimers” or “click to endorse” terms or conditions now or in the future contained in any site utilized by Buyer regarding the Goods and additionally Services or the Place Order.

Confidential Information incorporates is  not restricted to any data or material that is exclusive or monetarily important to Buyer, including, without confinement, know-how, specialized data, information, exchange privileged insights, creations (Hidayatullah, Ismail & Jaya, 2017). Regardless of whether protected or unpatented, advances, tests and materials, research or strategies for success, items, administrations, client and provider records, operations, fabricating forms, programming, equipment, hardware, databases, disclosures, recipes, outlines, illustrations, diagrams, plans, particulars, lab books, records, plans, examinations, test materials, mixes.

 PC programs in human or machine-lucid code (counting notes, spread-sheets and stream graphs), promoting, monetary, producing and different business information and projections (counting, without impediment, operation costs, net revenues, crude materials, deals data, generation and innovation costs), unpublished reports, and the substance and presence of the Place Order. Secret Information will incorporate the classified data of any outsider who has given Buyer the privilege to utilize such private data subject to a non-divulgence assertion amongst Buyer and such outsider (Pate & Scullion, 2017). Private Information require not be marked accordingly to appreciate the assurances managed the same yet require just be of the kind largely comprehended to be classified, restrictive or monetarily significant.

Contract Management

Standard merchandise fabricated by Supplier and sold to Buyer without having been composed, altered or adjusted for Buyer do not constitute Work Product and, as between the gatherings, all rights with deference thereto will remain the sole and select property of Supplier (Dong, 2017). The prior in any case, Supplier therefore gives to Buyer a non-selective, eminence free overall permit to utilize such of Supplier’s protected innovation, assuming any, as is required to give Buyer full advantage of any Goods that fuse such Supplier licensed innovation.

The uniform Commercial Code mainly functions in the U.S., which is used for harmonizing law of sales and various commercial transactions all over the nations through its adoption in various states. The Uniform Commercial code is not applicable in Australia. However, Article 3 and 9 has been modified for the implementation in Australia. The code has able to provide secure transaction in trade (Greenhalgh, 2016). The MFB Company has able to maintain a secure transaction of natural gas in Australia. The GEP global energy experts have helped in maintaining a roadmap to the contract for suitable supply of natural gas. This approach have helped in conducting in-depth targeted research on the contract.

According to Corporation Act 2001 Sec 5E(1), the legislature indeed in the corporate sector is not intended for excluding the limit of the concurrency operation of any law of a state. Therefore, the MFB Company have to follow the act in Australia for the trade of natural gas. The contract have to be signed under this act and violation of this act might led to legal consequences as mentioned in the contract (Clarke & Scurry, 2017). The main concern of the Article 9 is to prioritized disputes between the security holders of the company. The legislation is not in the form for applying jurisdiction to another trade in the country. Therefore, it helps in providing stability to the trade of the natural gas.

As recommended by GEP, the client agreed to have a short-term contract with natural gas retailers. The retailer have able to match the requirement of the client for the trade and signing on a short-term contract. The contract has been extended for one-year validity. The government norms has been applied on this contract for smooth purpose of the contract (Dong, 2017). Where an agreement has lapsed without an affirmed variety to expand however the supply of merchandise as well as administrations under the lapsed contract is required to proceed for a brief timeframe after the lapse, another break contract should be executed. In such circumstances, where the provider will proceed with supply under similar terms and conditions, acquisition endorsement for the expanded courses of action might be acquired by means of a similar procedure utilized for varieties (Greenhalgh, 2016). In spite of the fact that a procurement design is not required, the general population expert still needs to consider hazard and incentive for cash by surveying any negative effect of the broadened courses of action on the agreement expectations, value, time periods and objects of the Act.

Factors of Effective Contract Management

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