UMC and UVB Contract Negotiation and Risk Analysis Project

This project analyzes a collaborative research agreement between Universal Mining Company (UMC) and UVB, focusing on the development of a pilot plant. The assignment covers the contract draft, outlining key clauses and potential legal issues such as breach of contract and loss mitigation. It ident...Read More

Task 1
Contract Draft: Collaborative Research Agreement
This is an agreement between UVB and UMC under contractual agreement between UVB
and UMC. This agreement is important in the development of a pilot plant. They agree on which
actions should be undertaken during the contract agreement (Flammer, 2018). The plan and the
engineering function should be scheduled to be completed within the stipulated 14 months within
which are the date the contract has been stated to start for the contract. In the contract, there is
also the transfer of materials in which in the collaborations includes stating the materials.
The process of collaborative research agreement is lengthy due to drafting, reviewing and
negotiations taken by the collaborating organizations. The agreement binds together the seller
and the buyer where no one can go away from the collaborative agreement (Ha & Tang, 2017)..
UVB and UMC have agreed to sign a contract since there can be some legal issues between the
buyer and the seller. Legal issues that may arise from the contractual agreement between UBV
and UMC include;
1. Breach of contract- incase one of the parties in the contract has not done what was agreed
leading to a loss.
2. Loss mitigation- mitigating loss is making the damage not to increase (Merzifonluoglu,
2017).
UMC faces risks of both commercial and otherwise risks related to procurement. The financial
risks include;
Financial risks

The hidden risks in financial processes in UMC include procurement methods or transfer of
procurement materials from UVB. Costs may not meet of the material resulting to high risks
incurred by UMC. Hidden costs associated with materials procurement may be risky due to lack
of cost and price analysis not carried properly by UMC effectively.
Budgetary controls
The controls in budget of UMC facing the risks of not following the policies of the budget
effectively. Planned budget may not meet actual budget of the company. There should be a
controlled techniques where the planned budget is compared to the actual budget.
Strategic risks analysis
The company may face strategic risks as the existing ones may not work. The associated risks
may result in purchasing procurement failure.
Operational risks
This is a result of failure of conducting the operating contract properly. Business operations
agreed by the two companies may not work together leading to task failure. In order to mitigate
the risks, the complying factors must be identified (Patrucco, Luzzini, & Ronchi, 2016). The process
of procurement must follow the following factors to mitigate risks that have been highlighted;
1. Contract performance- checking on quality of materials for vacuum ice development
should have a proper budgetary control and management of costs.
2. Change management- changing and monitoring materials should be done for faulty
materials

3. Acceptance sign off processes
4. Distribution procedure
5. Grievance procedure
Clauses in the contractual agreement are the following;
1. Time performance clause
2. Forum law
3. Merger clause
4. Non-waiver clause
5. Severability clause
Task 4
The formal plan for negotiation with UBV is includes issues in bargaining and issue mix
Issue and bargaining mix.
The issue lies with the UMC firm has selected the UBV firm's materials for auditing. The
UBV is preparing a negotiation plan for approval in order to get the best deal. Getting the best
deal requires achieving the desired target at the right amount of time without fail (Turner, 2017).
Bargaining Mix
The cost and quality of the materials are the bargaining point of the two parties. The
issues are discussed and a conclusion is drawn.

Bargaining Zone
The approval of the material is spread between the two parties. The two parties must be
aware of the approval to be effectively able to control the tasks. The UBV is willing to sell their
materials at a high cost which is beneficial for them delivering the standard material at the right
time. The main objective is to seek the approval of the UVB organization for the purchase of the
material.
Constituents (Stakeholders)
The stakeholders are responsible for carrying out the agreed tasks effectively so that they
are able to meet the target with efficiency. Proper planning of the tasks before the conduction of
the agreement should be carried out in order to meet the target point (Whitaker, 2016).
Selecting a strategy
The UBV organization should select the competitive pricing strategy so that they are able
to understand the demands of the materials effectively.
References
Flammer, C. (2018). Competing for government procurement contracts: The role of corporate social
responsibility. Strategic Management Journal, 39(5), 1299-1324.
Ha, A. Y., & Tang, C. S. (Eds.). (2017). Handbook of information exchange in supply chain management.
Springer International Publishing.
Merzifonluoglu, Y. (2017). Integrated demand and procurement portfolio management with spot market
volatility and option contracts. European Journal of Operational Research, 258(1), 181-192.
Patrucco, A. S., Luzzini, D., & Ronchi, S. (2016). Evaluating the effectiveness of public procurement
performance management systems in local governments. Local Government Studies, 42(5), 739-761.

Turner, J. R. (2017). Contracting for project management. Routledge.
Whitaker, S. (2016). Procurement Management. In Pass the PMP® Exam (pp. 405-444). Apress,
Berkeley, CA.