This post was published to Mentor & Author at 3:57:08 PM 10/4/2015

Saw the raw deal

People tend to increase scope while keeping the payment low. Clients do it with contractors, who in
turn, do it with vendors. People do it in everyday life. Get more and pay less. Or work less and get more
pay.

Empty promises

This happens in the bidding stage. It also happens when a vendor brings a price implication. No one
wants to amend the purchase order and make a dent in the budget. So they convince the vendor to drop
the claim and future orders will follow.

More scope

A colleague of mine was working for a contractor. He issued a purchase order on a vendor. The vendor
accepted the order on a razor thin margin. At the end of the project, my colleague was finishing off the
project. The vendor came back with a claim for price escalation. This is a situation in which no contractor
wants to be in. On one side are Liquidated damages with which the contractor cannot live. On the other
side, you have a technology provider (vendor) whom you cannot live without. The peculiar things about
claims are that they happen at the eleventh hour. And force you to negotiate a deal you do not want to.

Unusual scope

In another instance, another colleague of mine asked a rotary equipment vendor to purchase something
which was not his usual supply. The vendor took the order thinking that small things are easily available.
It did not happen and delayed the entire project.

Hazy scope

If the scope is not defined, the stronger participant forces the weaker one to accept it. There is a
pushing limit. After that people tend to become unresponsive.

On the other hand, I have seen buyers give vendors their rightful dues even when the vendors had made
mistakes. The essence of procurement is that both sides should make profits.