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Negotiation Do’s and Don’ts and the Negotiation Agreement

CAS Web-site

http://rates.psc.gov/

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CAS Web-site

Contents:» Background and scope

» CAS Mission Statement

» Contact Information and Office Locations

» Submission Requirements

» Applicable Cost Principles, Administrative Requirements and Related Documents

» Negotiation Agreements

» Disclosure Statements (DS-1 and DS-2)

» Frequently Asked Questions

» American Recovery and Reinvestment Act (ARRA) Information

Prior to Negotiations

Things to know:

» Who is your cognizant agency (HHS-CAS / DOD-ONR)?

» What CAS Office do I negotiate with ? (DC, SF, Dallas, NY)

» Not always regional anymore

» ONR is in Arlington, Virginia

» Who are the key people in CAS and ONR?

» What are favorite areas for review?

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How Do I Know These Things?

» Know what has been going on in your region by talking to your peers at other regional institutions

What were the hot buttons, what happened, how did issues get resolved?

» Join appropriate professional organizations (NACUBO, NCURA (FRA) COGR, NACCA (NECA , SECA, WECA)

Prior to Negotiations

Prior to Negotiations

Determine who at your institution will negotiate

Keep this individual informed on the status of the review and timing of negotiations

Understand that the proposal complexity and desired rates may cause additional review

» Use of special studies (library)

» Componentization of buildings

» Interest costs on capital construction

» Variance between calculated rate and desired rate

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Prior to Negotiations

Wrap up loose ends. Complete all documentation and follow-up on weak areas.

Anticipate conflict and be prepared to manage it

Be prepared for additional data requests

Manage expectations at your institution

Successful Negotiation “Do's”

In General:

» Establish a friendly dialogue

» Create a trust relationship

» Respond expeditiously to information requests

» Respond honestly, but carefully-DON’T ASSUME

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Successful Negotiation “Do's”

In General:

» Submit a response that is

Prepared with thought and care

Well formatted and reconcilable

Well documented

Easy to follow

Successful Negotiation “Do’s”

In General:

» Conduct discussions/debates on a professional level

» Take breaks from time to time to assess the opposing points

» Be prepared to defend your position with the best arguments and data

» Recognize your weak points

» Argue your case with conviction,

but listen to your opponent

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Successful Negotiation “Do's”

In General:

» Treat unreasonable demands with diplomacy. Keep an open mind for possible alternatives and options.

» Be prepared to accept impasse.

» Leave negotiations on good personal terms.

Negotiation Don’ts

In General:

» Submit a sloppy or incomplete proposal

» Submit numerous revisions

» Be evasive or deal in half-truths

» Delay in responding to requests for! information

Do Not!!!

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Negotiation Don’ts

In General: » Be overly complicated in making your points

» Go in unprepared

» Go in with a closed mind

» Go in with a chip on your shoulder

» Be afraid to appeal

» Leave enemies behind

» Take it personally Do Not!!!

What makes a good negotiator?

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Traits of a Good Negotiator

Planning skills

Ability to think clearly under stress

General practical intelligence

Verbal ability

Product/subject knowledge

Personal integrity

Ability to perceive and exploit power

GoodNegotiator

The Negotiation Agreement

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The Rate Agreement

Includes a cover letter from the CAS or ONR. Includes important information and sometimes supplements the negotiation agreement

Signed by CAS Director and University CFO or authorizing official

Should include a schedule reflecting the component breakdown of the rate(s)

The Rate Agreement

Section I

» Lists F&A cost rates and fringe benefit rates (The rates represent the maximum rate for federal programs)

» Identifies rate type, effective period, rate %, applicable locations (on/off site, campus), and the function each rate is applicable to. (research, other sponsored activities, instruction)

» Defines MTDC base and fringe benefits base if applicable

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The Rate Agreement

Section II

» Describes the treatment of fringe benefits

» Lists the fringe benefits

» Describes the treatment of paid absences

» Provides definition of equipment

The Rate Agreement

Section III, General» Rate limitations based on statutory or administrative

limitations

» Accounting changes during rate period

» Fixed rate statement

» Use by other federal agencies statement

» Other for special remarks

» Signature blocks

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F&A Rate Agreement

F&A Rate Agreement

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F&A Rate Agreement

F&A Rate Agreement

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Questions & Issues