Sally:'So Geoff, how's everything with your current negotiations?'
Geoff:'Well, some are going well and some are going not so well.'
Sally:'OK, well tell me first about the negotiations with Beaver.'
Geoff:'It's not going well at all. In fact I don't think we're going to win the contract. We've reached a deadlock on the price of the project. As you know we made them a very reasonable offer, it was very competitive. They came back with a counteroffer on Monday where they not only wanted a 20% reduction in price, but also wanted to have 24 hour customer support instead of the 18 hours that we offered them. I told them that we could not do it for that price, because we would make a large loss. But it made no difference, they won't budge.'
Sally:'They were just seeing how you would react. You did the right thing by not reducing our offer. The worst thing you can do now is to panic and back down and give them a much lower price. I would advise you to give them time, they will know it's an unreasonable counteroffer. The negotiation is still in its early stages. There's a long way to go yet.
Maybe it's not as bad as you think, at least the negotiations haven't broken down and they are still continuing. It's common for negotiations to stall over issues like this. I would think that it'll start again when they've had time to think about it. I negotiated with them 3 years ago and their chief negotiator tried to bluff me, by saying 'This is the price we'll pay. Take it or leave it!'. I told him we would have to leave it, and they changed their mind two days later. It was like a game of poker.'
Geoff:'I hope so. Anyway, I have some good news about Clayton Logistics. It's progressing very well with them. We've reached a compromise on the price and scope of the project. They are very happy with the terms and conditions that we are offering them. In my opinion, I think they are ready to sign. I'm meeting them next week. So, I'll be hopefully bringing back a 4 year deal then.'
Sally:'Excellent. It's a big company and it should be good for a lot of follow on business. Oh, by the way, it looks likely that we'll have to renegotiate the Pemberton Contract. They're currently having a lot of problems because of the crisis and they contacted me about reducing the cost on their existing support contract. So, if you're not busy, I would appreciate if you could take care of it.'