Best and final offers are typically techniques seen on TV or in a movie. They make for great drama but lousy negotiation techniques.
Best and final offers are high risk. Only use this technique if you really mean it. If you don’t you run the risk of losing credibility. It certainly won’t work next time.
If you have delivered a best and final offer beware any attempts to open the negotiation on specific even if minor issues (as compared to requests for clarifications).
Best and final offers are sometimes used by procurement to put pressure on bidders. This is often referred to as “squeezing the lemon” and can be very effective. But note – it won’t stop buyers from negotiation on terms of a best and final offer if they think they can get even more value.
If a buyer truly doesn’t care who wins then this technique may be appropriate. It is often encountered in public procurement processes when bidders had to pre-qualify and any of these bidders would be acceptable. Typically however best and final offers are used to determine a preferred bidder. The proposal is then subject to further negotiation.
Effective counter techniques if faced with a best and final offer – the salami slice and quivering pen gambits. See High Impact Fee Negotiations and Management for Professionals for more details.