Why the Best Defence Proposition Doesn't Always Win: The Negotiation Behind the Negotiation

In any negotiation, parties naturally prefer the option which best advances their interests relative to the alternatives available to them. This is obvious enough when the negotiation is taking place across the table. It is sometimes less obvious when the more important negotiation is taking place somewhere else. 

That is often the case in significant public-private deal-making. A business may believe it is negotiating with a department, a team or an individual sponsor. In practice, any substantial decision in Government is likely to require support from a much wider range of actors, each with their own interests, constraints and institutional responsibilities. Persuading the person sitting opposite you is necessary, but it is rarely sufficient. You need to ensure that the proposition they take into the internal Government discussion is one which plays to the interests of the other parties involved and compares favourably, from their perspective, with the available alternatives – including delay, retrenchment or doing nothing. 

The latest episode of Negotiating Government, in which David Gauke spoke to former Chair of the Defence Select Committee and former Aviation Minister Robert Courts about the Defence Investment Plan, clearly illustrates this dynamic. Much of the commentary surrounding the Plan has focused on spending levels, procurement priorities and the likely winners and losers. Yet one of the most interesting aspects of the discussion was Robert's central observation – that the Defence Investment Plan should not be viewed as a shopping list of contracts, but as an indication of the direction of travel and of the criteria by which future procurement decisions are likely to be judged.  

Defence makes those criteria unusually visible. Military stakeholders will understandably focus on whether a capability addresses an operational requirement and can keep pace with a rapidly evolving threat environment. Ministers will be concerned with wider strategic, political and industrial objectives, including sovereign capability and resilience. MoD officials will need confidence that a programme can actually be delivered and that its risks are understood. HMT will focus heavily on affordability, value for money and whether the case can withstand scrutiny. The challenge for suppliers is therefore not simply to persuade the people they meet. It is to equip those individuals to win the internal negotiations that follow. An MoD sponsor who is convinced by a proposal must still be able to explain why it supports wider departmental priorities. Ministers must be able to defend it politically. Finance teams must be able to justify it fiscally. Ultimately, someone must persuade the Treasury that it is a better option than the available alternatives. Support from one part of the system is necessary, but rarely on its own sufficient.  

This is also why the familiar complaint that "the best product does not always win" is often misleading. The better question is: “best for whom?” A capability may be operationally superior. But it may also be more expensive, harder to deliver or weaker on industrial benefit. Government is often trying to achieve several objectives simultaneously. The proposition which succeeds is therefore frequently the one which best reconciles those objectives and interests, rather than the one which performs best against a single criterion. That tension runs throughout the discussion between David and Robert – and is particularly visible on the relationship between military requirements, industrial policy and Treasury approval.  

For organisations negotiating with the UK Government, the objective is to understand the internal negotiation and to equip key supporters to succeed in it. In practice, that means understanding what different actors are trying to achieve, what alternatives are available to them and what arguments will resonate with them. A proposal designed solely to persuade a capability sponsor is unlikely to survive intact. The stronger approach is to anticipate the questions that ministers, finance teams and ultimately HMT will ask, and build those answers into the proposition from the outset. 

The Defence Investment Plan is therefore useful not just because it signals future priorities, but because it sheds light on the criteria by which future decisions will be judged. Organisations that understand those criteria, and build propositions around them, will generally be in a stronger position than those which focus solely on the merits of their own solution. 

This article draws on themes discussed by David Gauke and Robert Courts in Negotient's latest Negotiating Government Podcast on the Defence Investment Plan. Listen here.