Motivator Tony Gaskins once said, "Communication to a relationship is like oxygen to life. Without it, it dies." That certainly holds true when it comes to conducting successful contract negotiations.
The Water and Wastewater Equipment Manufacturers Assn. on May 13 to 15 hosted its annual Finance & Contract Administration Council in Chicago. This year's event focused heavily on contract terms and conditions, negotiations and enforcement.
Among the many highlights was a panel discussion of 12 of the most frequently disputed water and wastewater equipment purchase terms and conditions. The panel included representation from several sides of the negotiating table:
- Manufacturer: Jim Brown, Corporate Counsel, SUEZ environnement Treatment Solutions, Richmond, Va.
- Contractor: Phil Beck, Partner, Smith, Currie & Hancock, Atlanta, Ga.
- Owner: Robert Lewis, Director of Public Works, Village of Westchester, Ill.
The panelists shared their thoughts and reasoning behind such terms and conditions as indemnification, consequential damages, limitations of liability, warranties, payment terms, and others, giving attendees firsthand accounts of not only what each side was asking for, but why. Panelists also offered suggestions for how each of the other sides of the negotiating table might make compromises to accommodate their needs and create win-win contracts. Sometimes it comes down to a simple matter of putting a price on the request (or demand, as the case may be).
Ultimately, all sides agreed that the goal is to reach a contract that is fair, reasonable and, most importantly, leads to a successful project.
"As an owner, we are looking to build a piece of infrastructure that we’re going to own and operate forever, and we’re looking for value," Lewis said. "It isn't us vs. them, it’s understanding that we can’t build it by ourselves. We all need to look at how to partner better and how to communicate better.”
Beck, who is active in the leadership of the Associated General Contractors of America (AGC) said, "If you were a fly on the wall of an AGC meeting these days, what you would hear is a lot of talk about collaboration, about getting people to the table earlier in the process. I think this bodes well for the industry.”
Brown, speaking on behalf of the manufacturing community, added, "It's about listening and trying to understand. If you can't find that language that will work and satisfy all parties, you've failed."
Indeed, the goal of any contract negotiation is to find language that will allow the project to move forward. And the goal of WWEMA—as the only trade association in the nation specifically representing water and wastewater equipment manufacturers—is both to ensure that our members' needs and interests are heard and to help our members understand and appreciate the needs and interests of their customers and their contractor and engineering firm partners. WWEMA was pleased to initiate this important conversation and looks forward to future collaboration.
Vanessa M. Leiby is executive director of the Water and Wastewater Equipment Manufacturers Assn., a Washington, D.C.-based trade organization that has represented the interests of manufacturers serving the water supply and wastewater treatment industry since 1908. Leiby can be reached at [email protected].