Negotiation Preparation and Planning for Construction Professionals

The 80/20 Rule of Negotiation

Eighty percent of negotiation success comes from preparation; twenty percent from the negotiation itself. Yet most construction professionals spend minimal time preparing, relying instead on experience and improvisation. This article provides a structured preparation framework.

Phase 1: Information Gathering

1. Know Your Position

What exactly do you want? Be specific: "A 15-day EOT plus $75K in delay costs for the design revision delay"
What is your justification? Contract clause, schedule analysis, cost records
What is your BATNA? DAB, arbitration, accept the situation, escalate to senior management
What is your reservation price? The minimum you will accept

2. Know Their Position

What do they likely want? Based on their actions, correspondence, and past behaviour
What are their constraints? Budget limits, schedule pressures, board approvals, public scrutiny
What is their likely BATNA? Replace you, litigate, delay the project, accept the situation
What is their likely reservation price? Based on their budget and alternatives

3. Know the Context

What is the project status? Early, mid, or late stage affects leverage
What is the relationship history? Previous disputes, successful collaborations
What external factors apply? Market conditions, regulatory changes, public attention
What are the time constraints? Upcoming deadlines, financing milestones, handover dates

Phase 2: Stakeholder Analysis

Map all stakeholders:

Primary parties: You, the other party, the decision-makers on both sides
Secondary parties: Consultants, subcontractors, suppliers, authorities, financiers
Influencers: Senior management, board members, end users, public

For each stakeholder, assess:

Interest level: How much do they care about the outcome?
Influence level: How much can they affect the outcome?
Position: Are they supportive, neutral, or opposed?
Needs: What do they need from the negotiation outcome?

Phase 3: Interest Mapping

Create a two-column table:

Your Interests	Their Likely Interests
Fair compensation for additional work	Budget control
Schedule recovery	On-time completion
Maintaining relationship	Quality assurance
Avoiding dispute escalation	Avoiding claims
Cash flow improvement	Cost certainty

Identify:

Shared interests: Both want project completion, safety, quality
Compatible interests: Your schedule recovery = their earlier handover
Conflicting interests: Your higher price = their higher cost

Phase 4: Strategy Development

1. Set Your Objectives

Ideal outcome (target): The best realistic result
Acceptable outcome: A fair result you can live with
Walk-away point: Below this, exercise your BATNA

2. Develop Your Opening

Will you open first or let them? (Opening first allows anchoring)
What will your opening position be? (Ambitious but credible)
What supporting data will you present? (Documentation, analysis, benchmarks)

3. Plan Your Concessions

List all items you can concede and their value to the other party
Order concessions from lowest cost to highest cost
Never concede without getting something in return
Plan the "if...then" structure: "If you accept X, then I will concede Y"

4. Anticipate Their Tactics

What tactics will they likely use? (Anchoring, nibbling, good cop/bad cop, deadline pressure)
How will you respond to each? Prepare specific responses
What questions will they ask? Prepare honest, strategic answers

Phase 5: Team Preparation

Assign roles:

Lead negotiator: Presents the main position, makes opening and closing
Technical expert: Provides technical details, answers specialist questions
Note-taker: Records agreements, tracks concessions, documents the session
Observer: Watches body language, identifies tactics, advises during breaks

Pre-meeting briefing:

Review objectives, strategy, and roles
Agree on signals for requesting a break
Discuss what information can and cannot be shared
Prepare fallback positions for each major issue

Phase 6: Logistics

Venue: Neutral ground is best; if not possible, your office gives slight advantage
Seating: Round table for collaborative; opposite sides for competitive
Timing: Avoid late afternoon (fatigue); morning is optimal for complex issues
Materials: Bring copies of all documents, a printed agenda, and a term sheet template
Refreshments: Provide quality refreshments — it sets a collaborative tone
Technology: Agree on whether phones/laptops are allowed during the session