Procurement Best Practices: Collaborative Negotiation Versus New Procurement
Many local governments renegotiate with current contractor to amend the existing contract if current and projected service quality is high, prices are competitive and the relationship is collaborative and communicative.
If a local government is satisfied with its contractor relationship and if the contractor is willing to provide zero waste services, negotiations may avoid a more costly and time-consuming procurement process. Local government technical and legal staff should work closely with elected officials to determine whether negotiating a contract extension is appropriate. Some areas to consider elected official input on include:
- Whether to negotiate a potential extension or award a new contract or franchise
- Timing of the negotiation period and ending negotiation date.
- Direction on next steps if negotiations are not successful (Request for Proposals, etc.).
Advantages
- Saves time and money on procurement: An average proposal process costs each hauler about $50,000-100,000 and costs local government about $100,000-200,000, most of which can be avoided with a negotiated deal.
Disadvantages
- Loss of competition: The most competitive pricing or state-of-the-art services may not result from a non-competitive negotiated agreement. By not soliciting competitive proposals, the local government can be perceived as not providing a fair, competitive environment.