Fresh off the heels of NASPO’s 11th Annual Law Institute, we’re diving into a topic that can spark both passion and frustration: contract negotiations. But hold on tight! Our recent Supplier Attorney Roundtable, which brought together supplier and procurement attorneys, has sparked a game-changing approach that’s about to transform your experience. The powerful mantra— “redline for a reason”— will help get you the agreement you want in a little less time and a little less stress.
For many procurement officials and suppliers, the process of “redlining,” which refers to the process of marking up a contract with comments and revisions to adjust or remove terms or conditions, is arduous and far too often leads to delays or even dead ends in the contracting process. That’s where the mantra redline for a reason comes into play. When you redline for a reason and justify your contract position, parties ensure that every change made to a contract is purposeful and contributes positively to the agreement.
Redline for a Reason Explained
Redlining for a reason is the practice of encouraging both parties to provide an explanation for their proposed contract amendments. For instance, if your state law prohibits third-party indemnity, include that specific statutory language in a comment attached to your contract redline. By clearly indicating which terms are non-negotiable, you eliminate confusion and allow everyone to focus their negotiating efforts on other clauses that can bring you closer to an agreement.
For procurement officials, this practice not only justifies their changes but also helps suppliers understand the reasons behind adjustments or removals of certain terms. Suppliers, in turn, gain insight into these changes, allowing them to respond thoughtfully instead of simply accepting or rejecting amendments.
By providing an explanation to your revision request, each party anchors their positions in fact and eliminates any actions that could be misinterpreted as mischievous intent. It may be surprising but adding a sentence or two reduces unnecessary back-and-forth communication. In the end, it promotes negotiation rather than confrontation, fosters a better understanding of each side’s constraints, and builds trust.
Getting Started
For redline for a reason to work, procurement officials should know which common terms and conditions are non-negotiable and WHY they are truly non-negotiable. Start by drafting a list of terms, either by yourself or with co-workers, that you have previously considered “non-negotiable.” Ask questions like:
- Is this in statute, case law, or policy?
- What part of the clause is the problem?
- What does the “other side” need to know about the clause?
Once you have identified those terms/conditions and articulated the WHY for each problematic clause, work to create a repository (even if that is just a shared Google doc) with the list of the terms and the explanations. Don’t forget to include a link to the statute or policy in your explanation, this goes a long way in defending your position!
Now, you have thought through your positions and can quickly pull that template language from your repository to add to your future redlines.
By sharing your non-negotiables in a systematic and supported way—right there on the page with your redline–you’ve eliminated weeks (and sadly, sometimes months) of back-and-forth. This type of upfront and candid approach has now set the standard for the process. Not only will this streamline the negotiation process for this specific contract, but you’ve demonstrated that you and your team are knowledgeable, fair, and efficient. This can go a long way in the niche of public procurement!
Part of a Bigger Strategy
Contract negotiations are no easy task—the process is complex, and each contract often has idiosyncrasies. But, redline for a reason and a few simple practices can be used together to help eliminate unneeded roadblocks along the way. Streamlining State Procurement: Insights from the NASPO State and Supplier Attorney Roundtable, the report from the previously mentioned Roundtable, helps to share some of those learned strategies, such as:
- Using Statements of Work to properly and clearly define roles and responsibilities to help better allocate risk and to allocate it fairly
- Identifying the decision-maker process can make negotiations more efficient
- Taking time to educate both sides on their contracting process is key
In the end, redlining for a reason is not just about making contract revisions; it is about improving communication, fostering understanding, and promoting efficiency in the negotiation process. It’s about making every change count and ensuring that both parties are on the same page throughout the contracting process. Remember, redline for a reason, and you are likely to make your contracting process a little more efficient and a lot less stressful!
Additionally, NASPO offers the following contracting and negotiating resources:
- Procurement Toolbox: The Value of Negotiations
- Procurement U Course:
