ExpertHard1 markMultiple Choice
PMP · Question 28 · Task 8: Negotiate project agreements
A project manager is negotiating a contract with a vendor. The vendor proposes a clause that allows them to increase rates by 10% annually. The project budget is fixed. What is the BEST negotiation strategy?
A project manager is negotiating a contract with a vendor. The vendor proposes a clause that allows them to increase rates by 10% annually. The project budget is fixed. What is the BEST negotiation strategy?
Answer options:
A.
Accept the clause to get the deal signed quickly.
B.
Propose a performance-based incentive where rate increases are tied to meeting specific KPIs.
C.
Threaten to cancel the negotiation if they don't remove the clause.
D.
Reduce the project scope to afford the rate increase.
How to approach this question
Negotiation (Task 8) should be collaborative. Look for the trade-off.
Full Answer
B.Propose a performance-based incentive where rate increases are tied to meeting specific KPIs.✓ Correct
B
Principled negotiation focuses on interests. The vendor wants more money; the PM wants budget certainty/value. Tying pay to performance satisfies both.
Common mistakes
Capitulating (A) or being aggressive (C).
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