Steve Arhancet,Director of Consultant Services for MBO Partners, shares the story of a big contract win for an MBO Alumni Associate. It all started with a difficult game of chicken between the Associate and an over-reaching procurement office.
“We were able to provide some really useful guidance both to help win the contract – and also to significantly decrease the risks.”
I recently had the chance to work closely with an MBO alumni associate, who reached out to re-engage us to help him with a new contract he was negotiating with a municipality. The vendor requirements were very strict, and he knew he would not be able to afford to set up the process, and procure the high insurance required to do business with the group without using MBO -- where insurance is a part and parcel of our low fixed-fee service offering.
His was a typical story: he had already won the business – the internal group really thought he was the best fit. But he had become caught in the bureaucracy of procurement.
We were able to provide some really useful guidance both to help him win the contract – but also to significantly decrease risks he wasn’t even aware he was signing up for.
As his CSA (or Consultant Services Advisor), my job once my alumni associate introduced me to the buyer, was to help him negotiate and win the business in a way that made it favorable for him to operate. I helped negotiate back-and-forth – it was NUMEROUS times we exchanged negotiations with the contract procurement office. I can’t imagine how he could have focused on other business, if that negotiation was his primary task. I think I helped to offload some important needs, keeping him in business while working to win a new revenue stream.
Where I think we really did bring value is in shedding light on his hidden contract risks – for example in warranties that had too long of a time span for anyone’s comfort ( indefinite warranty period – meaning if something broke 50 years later, he would have to fix the an issue for free!). We also found issues with intellectual property, indemnification and refunds that were of concern. After many discussions between the client, MBO Partners and the MBO Associate (and subsequent redlined versions of the contract being send back and forth) – we came to a mutually rewarding outcome for all parties. I acted as his partner, negotiating the terms of this agreement and saving him plenty of time.
Contract negotiation with difficult procurement offices is like a game of chicken. Who’s going to turn first? If you are signing up for something that’s too risky, walk away or charge more for the increased risk. In my experience, oftentimes the customer will come back and conciliate, since you are uniquely qualified for helping them. That’s what happened here.
The wonderful outcome of this type of long-haul engagement is that while they may be difficult to enter, once you are in the door, your business grows. This particular MBO alum became an Associate again and even began to use us to manage some complexities of paying partners working with him on the project. We were able to help set up fixed price payments to each partner on the project, based on a pre-set formula, and treat his partners like subcontractors through the MBO Sub program, leaving him in control of the overall business. It’s fun to see an alumni come around again – and grow his contract and vendor footprint!
Steve has years of experience helping independent professionals get big wins and helps many solve difficult problems facing their solo practices. He’s written numerous articles as an expert on billing practices for contract professionals . He serves as the Director of MBO’s Consultant Services Advisory team . In his spare time, Steve enjoys working out and spending time working on his own independent effort – running a successful gaming group that travels around the country and the world to attend tournaments. Contact Steve to schedule a consultation (a complimentary service offering) at: https://my.timedriver.com/C9CPC
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