PlanHub Premier Feature Spotlight: Qualification and Risk Management Over and over, we’ve heard general contractors say that ensuring subs are qualified is one of the
1. Separate people and problemsWhen beginning negotiations, it’s important to recognize that each party to the agreement is a person first. People have emotions and those emotions are legitimate and will affect the negotiation. If you are able to put yourself in the other side’s shoes and see the argument from their side, you’ll be one step ahead of the game. Successful negotiation should be undertaken together, not as adversaries, but as teammates facing a problem. By using a robust general contractor software and physically sitting next to other parties (as opposed to opposite them), you can change the dynamic. The goal is to solve the problem together, while maintaining everyone’s integrity and, as much as possible, looking for a win-win solution. When negotiating or drafting construction contracts, parties should keep the overall goal of the project in mind when discussing agreement terms. Project owners want quality work that meets their budget and schedule. General contractors want fair agreements with the project owner and their subcontractor that meet the budget and schedule. And subcontractors want a fair payment or contract term and a clear definition of their scope of work. Ensuring that the clauses or agreements meet these needs is key to having a successful project.
2. Focus on interests, not positionsThe problem is driven by the interests of the parties. Interests drive each party’s decisions and are the “why” or “why not” of what they do. Often parties have multiple interests in one negotiation. Looking for shared interests allows parties to come together to focus on the overarching goal and can make the drafting or negotiation process smoother and more amicable. Positions are based on decisions that the parties have already made about what they want. They have more to do with the solution than the problem. Negotiating from positions leads to arguing ineffectively and can ruin the business relationship. In addition, when there are multiple parties to an agreement, positional negotiation becomes even more difficult. When the parties are clear on each other’s interests and focus their negotiation on the satisfaction of those interests, solutions to construction challenges and agreements are the natural byproducts.
3. Brainstorm options before agreeingContract parties can use brainstorming to come up with unique solutions to conflicts. The keys to a good brainstorming session include:
- Don’t judge ideas during the session. The key is to come up with as many as possible, whether they are feasible or not. The contract negotiation process depends on using your imagination, not your analytical mind.
- Think “outside the box.” Although it’s a cliché at this point, the best ideas come when participants adhere to these two principles: there is no single answer and no fixed pie.
- Participants need to take ownership of the problem and work together to find a solution. It’s not one party’s responsibility to solve the issue.