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What’s the use of open book accounting in supplier negotiation?
The negotiations run in parallel with the works which the contractor is carrying out under the PCSA. You should not ignore them. A common cause of concern is when a tender asks for breakdown of your price s. CIPS Knowledge.
Pitch competitively and in line with the tender requirements! Pricing undertaken during the second stage is more likely to reflect the actual construction costs, and lower probability of claims, otherwise tenedrs may require re-negotiation at second stage. Choose the right tenders and ignore anything else. There must be enough of a design to allow for firm preliminaries and a programme from the contractor!
Open book procurement has its supporters and detractors, with the latter often claiming that contractors are up to no good, or manipulating the process. But if all parties play the game fairly, the experience should only be positive. The scheme started in with a four-year programme.
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The concept of suppliers and customers having such a trusting relationship that they can work together collaboratively and seek ways to reduce the cost of items and that they share information and data on a very open and transparent level was almost unheard of 10 or 15 years ago, but is now becoming much more common place. Some who have been involved in either procurement or supply for some time and remember just how confrontational the process used to be, are still slightly nervous about it. Well in fact, there is no reason to be nervous about this process; it is actually a mutually beneficial and constructive relationship when it is carried out well, so it really is nothing to fear! The Open Book Policy An open book policy is nothing more than an agreement to view data and financial information relating to costs incurred in any one part of the supply chain. So the supplier and customer can work together to ensure that costs are minimised where possible. Sometimes the customer can even help the supplier by suggesting ways that they may be able to source some raw materials from companies that offer better value for money, thereby reducing the costs of the end product further.
The contractor's involvement at pre-construction stage allows for input into buildability, risk, you should be OK? As long as they are reasonably, leading to fewer problems during construction. The contractor will also be seeking to agree a programme and cost plan with the employer. Use open book accounting to test all assumptions as to desi.
Some of the most difficult negotiations with suppliers involve open book accounting. You should show potential pilicy within your quality response. For example, there may be a detailed specification in a cleaning or construction tender plus a chance to survey the premises. DLA Piper?United Kingdom June 2 Then confirm them within the tender pricing schedule as a summary or note. Winner: Sabic's digitisation to streamline processes. The business reason is we want a supplier to remain in business in the long term.
Or the customer may wave contract clauses in front of you as a warning. House of Fraser attacked for selling fur products! Stage 2 concludes with agreement of a lump sum price for completion of the project and the terms of the building contract. But if all parties play the game fairly, the experience should only be positive.