"The vendor tender team will then begin to pressure their internal legal counsel, acting in the interests of the client organisation in an effort to get the tender through their own internal approval processes. Concessions will often be made in this phase, without any effort from the client, that would be difficult - or even impossible - to negotiate down the track following the traditional method."

Standard contracts drawn up by vendors are typically vendor-biased, says Foodland Associated general manager information technology Paul Trent. Rather than accepting the contracts as is, Trent says he seeks to bring them more into balance. Ultimately both parties need to be comfortable and able to sustain their respective businesses going forward. "We avoid situations in our contracts where vendors win and we lose, or we win and they lose, because at the end of the day, if they can't sustain their contractual commitments they'll be out of business and then we lose," he says.

Buying commodity products is one thing, Trent says, particularly where he does not believe the vendor is adding any value. Things are very different when he is seeking to build a relationship with the vendor. In those circumstances, he says, Foodland is much more likely to focus on the relationship than the contract. "The contract obviously underpins the relationship, but if you've got to pull out a contract and push it in the vendor's face to manage a relationship then the best contract in the world is not necessarily going to make for a good business relationship."

SA Water's Johnston says since a contract is no more than two parties agreeing to achieve something, a far more valuable approach is to form a relationship with an organisation that is compatible with their culture and style (with the contract held in the background), than to attempt to manage-by-contract an incompatible organisation. After all, no contract can cover all possible circumstances, he says. "So many issues need to be solved on a day-to-day basis by human beings."

Negotiating in a market of one is ill-advised, Johnston says. "Vendor management are bound to look after their shareholder interests, and the absence of competition is highly unlikely to work in the client's favour - unless there is the threat of competition following an unsuccessful attempt at negotiation. Presenting a current single vendor with a pre-written contract and a relatively short time frame in which to consider it may be advantageous - providing the alternative of a market tender is a realistic one."