Mr Mahimkar 39 s department has entered into a 5 year contract with a major supplier The contract ha...........

Decision making and Interpersonal Skills Decision making

Mr. Mahimkar's department has entered into a 5-year contract with a major supplier. The contract has 2 years remaining on its term but the supplier has now asked Mr. Mahimkar to renegotiate the price of the contract because his labour and fuel costs have risen more than expected. If Mr. Mahimkar agrees to a price increase, it will increase the department's total costs substantially. The CAG (Comptroller and Auditor General) is likely to take a dim view of this during their annual audit.

Which of the following decisions is/are most appropriate?

Mr. Mahimkar should negotiate the price and try to limit the increase to a minimum so that the department's costs are not significantly affected.

Mr. Mahimkar should refuse to negotiate the price and hold the supplier liable to 'breach of contract' if supplies are affected.

Mr. Mahimkar should agree to the price increase, on the condition that no further increase would be granted during the contract period.

Mr. Mahimkar should refuse to negotiate the price, sue the supplier for breach of contract and blacklist the supplier.

Explanation:

according to the given situation the most appropriate decision is that Mr. Mahimkar should refuse to negotiate the price and hold the supplier liable to 'breach of contract' if supplies are affected.