A computer services company was negotiating a very large order with a major corporation.

Question: A computer services company was negotiating a very large order with a major corporation. They had a very good track record with this client. Five different departments in the corporation had pooled their requirements and budgets and a committee that had representation from all the departments was formed. The corporation wanted the necessary equipment on aA computer services company was negotiating a very large order with a major corporation. They had a very good track record with this client. Five different departments in the corporation had pooled their requirements and budgets and a committee that had representation from all the departments was formed. The corporation wanted the necessary equipment on a long lease and did not want to make an outright purchase. Further, they wanted all the hardware and software from one supplier. This meant that their supplier would need bought-out items from other suppliers, since no one supplier could meet all the requirements from its range of products. The corporation provided an exhaustive list of complex terms and conditions and pressured the vendors to accept their terms. The computer company that was finally awarded the contract had agreed to the overall terms as far as their own products were concerned, but had also accepted the same terms for the bought out items. In this case, the bought out items were to be imported through a letter of credit. The percentage of bought out items vis-à-vis the company’s own products was also very high. One of the terms accepted was that the ‘system’ would be accepted over a period of 10 days after all the hardware had been linked up and the software loaded. The computer company started encountering supply troubles immediately. There were over a hundred computers connected with one another through software. For the acceptance tests, it had been agreed that the computer company would demonstrate, as a prerequisite, the features they have promised during technical discussions. Now, when a Hero Honda motorcycle claims 80km to a litre of petrol, it is under ideal test conditions, and if a motorcycle from the showroom were to be tested for this mileage before being accepted, it would never pass the test. In the corporation’s case, due to internal politics, the representatives from one department-who insisted on going exactly by the contract-did not sign their acceptance since the system could not meet the ideal test conditions. Further, in a classic case of “for want of a horseshoe, payment for the horse was help up”, when the computer company tried to get the system accepted and payment released, they could not. The system was so large that at some point over a period of 10 days, something or the other always had problems. But the corporation took the stand that as far as they were concerned, the contract clearly mentioned that the system had to be tested as a whole and not module by module. Questions: 1. Comment on the terms and conditions put forth by the corporation. 5M 2. What factors influenced the computer company’s decision to accept the contract? 5M 3. Was it a win-win agreement? Discuss. 2M 4. As a committee leader, how will ensure proper execution of the contract? 3M
Let the corporation be ABC Corporation and Let the computer company be QST Computer Company Q1) Terms and Conditions were completely in the favour of ABC corporation and designed to suit its requirement completely. while computer company was not able…View the full answer