A template for identifying and addressing risks in the negotiation process, including potential consequences and mitigation strategies
1. General Information
| Field | Details |
|---|---|
| Negotiation Event | SayPro Monthly Bid Negotiation – January SCMR-1 |
| Date of Assessment | [Insert Date of Assessment] |
| Assessment Team | [List of Team Members Conducting the Risk Assessment] |
| Lead Assessor | [Name of Lead Assessor] |
| Prepared By | [Name of Preparer] |
2. Risk Identification
The following table outlines potential risks identified in the negotiation process, categorized by type. For each risk, the likelihood and impact are assessed, and a mitigation strategy is proposed.
| Risk ID | Risk Description | Risk Type | Likelihood | Impact | Risk Rating | Consequences if Unaddressed | Mitigation Strategy |
|---|---|---|---|---|---|---|---|
| R-001 | Supplier fails to meet agreed delivery timelines. | Operational | High | High | Critical | Delayed project timelines, potential client dissatisfaction, financial penalties. | Set clear delivery deadlines with penalties for delays; include a performance clause in the contract. |
| R-002 | Price negotiation not aligned with market trends. | Financial | Medium | High | High | Overpayment for goods/services, financial strain on the project. | Conduct thorough market research; negotiate a price adjustment clause based on market trends. |
| R-003 | Disagreement over contract terms (e.g., payment terms, scope of work). | Legal/Strategic | Medium | Medium | Moderate | Extended negotiation time, legal disputes, project delays. | Ensure all terms are clearly defined and mutually agreed upon; involve legal counsel early in the process. |
| R-004 | Buyer or supplier fails to comply with confidentiality agreements. | Legal | Low | High | High | Breach of sensitive information, legal ramifications, loss of trust. | Enforce strict confidentiality clauses and penalties for non-compliance. |
| R-005 | Unexpected political or economic changes (e.g., changes in tariffs or trade regulations). | External/Environmental | Low | High | Moderate | Disruption of supply chain, increased costs, delays in delivery. | Monitor political/economic trends, include a force majeure clause in the contract. |
| R-006 | Misalignment between internal stakeholders on negotiation objectives and priorities. | Organizational/Strategic | Medium | Medium | Moderate | Inconsistent negotiation strategies, internal conflicts, suboptimal deal terms. | Align internal stakeholders before the negotiation; appoint a negotiation lead. |
| R-007 | Supplier not having adequate resources or capacity to fulfill contract terms (e.g., lack of personnel or production capacity). | Operational | Low | High | High | Delay in fulfilling contract, breach of agreement, financial loss. | Assess supplier’s capabilities before finalizing the agreement; include resource audits in the contract. |
| R-008 | Disputes over intellectual property ownership and rights after the contract is signed. | Legal/Intellectual Property | Medium | High | High | Legal battles, loss of intellectual property rights, financial loss. | Clearly define intellectual property terms in the contract and ensure mutual agreement. |
3. Risk Evaluation and Assessment
In this section, the likelihood and impact of each risk are evaluated to determine its risk rating. The Risk Rating is calculated using the following scale:
- Likelihood:
- High (3)
- Medium (2)
- Low (1)
- Impact:
- High (3)
- Medium (2)
- Low (1)
Risk Rating = Likelihood x Impact (Max: 9)
| Risk ID | Likelihood | Impact | Risk Rating | Risk Level |
|---|---|---|---|---|
| R-001 | High (3) | High (3) | 9 | Critical |
| R-002 | Medium (2) | High (3) | 6 | High |
| R-003 | Medium (2) | Medium (2) | 4 | Moderate |
| R-004 | Low (1) | High (3) | 3 | High |
| R-005 | Low (1) | High (3) | 3 | Moderate |
| R-006 | Medium (2) | Medium (2) | 4 | Moderate |
| R-007 | Low (1) | High (3) | 3 | High |
| R-008 | Medium (2) | High (3) | 6 | High |
4. Mitigation Strategies and Action Plan
For each identified risk, mitigation strategies are proposed, along with specific actions, responsibilities, and timelines for addressing the risk. This section ensures that risk management efforts are tracked and executed.
| Risk ID | Mitigation Strategy | Responsible Party | Action/Timeline | Status |
|---|---|---|---|---|
| R-001 | Set clear delivery deadlines with penalties for delays. | Procurement Team | Draft performance clauses with penalty clauses in the contract. Review progress quarterly. | Pending |
| R-002 | Conduct market research and include a price adjustment clause. | Finance Team | Complete market research by [Insert Date], include clause in contract. | In Progress |
| R-003 | Engage legal counsel early in the process. Define all terms. | Legal Team | Finalize contract terms with legal team before signing. | Completed |
| R-004 | Enforce strict confidentiality clauses and penalties for non-compliance. | Legal Team | Review and ensure confidentiality clauses are added to the contract. | In Progress |
| R-005 | Monitor external political/economic trends. Include force majeure clause. | Risk Management Team | Set up monitoring systems for political/economic trends. | Ongoing |
| R-006 | Align internal stakeholders before negotiation. | Project Manager | Schedule pre-negotiation alignment meeting by [Insert Date]. | Pending |
| R-007 | Assess supplier’s resource capacity. Include resource audits. | Procurement Team | Perform a supplier audit before contract finalization. | In Progress |
| R-008 | Define intellectual property terms clearly in the contract. | Legal Team | Review and ensure IP clauses are comprehensive. | Completed |
5. Risk Monitoring and Review
This section ensures continuous monitoring of identified risks throughout the negotiation process and beyond. A responsible party must regularly review risk status and update mitigation actions.
| Risk ID | Monitoring Actions | Responsible Party | Review Frequency | Status |
|---|---|---|---|---|
| R-001 | Regular updates on delivery progress from supplier. | Project Manager | Monthly | Active |
| R-002 | Periodic price review and market comparison. | Finance Team | Quarterly | Active |
| R-003 | Legal review of contract terms and updates. | Legal Team | Once per negotiation | Complete |
| R-004 | Check compliance with confidentiality clauses. | Legal Team | Ongoing | Active |
| R-005 | Regular assessment of external market conditions. | Risk Management Team | Monthly | Active |
| R-006 | Monitor internal feedback on negotiation goals and strategies. | Project Manager | After each meeting | Pending |
| R-007 | Supplier resource capacity assessment review. | Procurement Team | Once per quarter | Active |
| R-008 | Ensure ongoing IP protection as per agreed terms. | Legal Team | Ongoing | Active |
Conclusion:
The Risk Assessment Template is an essential tool for the SayPro Monthly January SCMR-1 Bid Negotiation process, allowing teams to identify potential risks early, assess their severity, and implement mitigation strategies. By documenting risks, analyzing their impacts, and proactively developing action plans, the team can ensure that the negotiation proceeds smoothly, with minimized disruptions and maximum protection for all parties involved.
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