TU The Sole Source Procurement Situation for Both Parties Essay

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Business Finance

Temple University

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CASE

1

Negotiation Planning Case Study
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CASE

2

1. Prepare separate written analysis of the procurement situation for both parties.
Mr. Pilgrim (Buyer)
Based on the case, Gilbert William Pilgrim is the buyer, faced with a sole source
procurement. Given the situation, Mr. Pilgrim is in a weaker position in terms of
negotiations due to a lack of alternative suppliers. The high estimates of the procurement
prompted him to assign two analysts with the task of evaluating the cost breakdown
furnished by Gilbert Instrument. Mr. Pilgrim clearly understands his position in the
contract, where a lack of alternative suppliers placed him in a comparatively weaker
bargaining position. Most importantly, he understood that the seller was aware of his
position and would therefore consider these facts during the negotiation. One of the
advantages that Pilgrim was considering was the existing relationship between Tappan
Missile Company and Gilbert Instrument and that the current procurement was of a
smaller dollar amount.
Gilbert Instrument (Seller)
From the seller's perspective, Gilbert Instrument, the situation is in their favor,
owing to the lack of competition in the sector. From the case, it is evident that Gilbert
Instrument has had a close working relationship with Tappan Missile Company. Gilbert
gained a good reputation for having the special tooling necessary for the modification of
optical instruments, a service that Pilgrim desperately needs. According to the facts from
the case, Gilbert Instrument recognizes Tappan as one of its biggest customers for optical
instruments. It is a known fact that sellers strive to maintain their customers for long-term
business relationships. As such, it is in Gilbert Instrument's interest to maintain a good
working relationship with Tappan Missiles Company, which is also the main seller for
Pilg...


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