Implementation and Other Considerations

This chapter covers the following topics:

Overview

This chapter provides specific considerations for implementing Oracle Procurement Contracts, as well as additional considerations for end-users. It also provides an overview of the Oracle Procurement Contracts features that support the key stages of the procurement contract life cycle.

Before you proceed with the implementation of Oracle Procurement Contracts, it is recommended that you address the business considerations outlined in the following table. The table also lists the sections in this guide where you can find relevant information:

Question Related Section
How many organizations will be involved in the implementation? Establish Contract Standards
Global Agreements
Which organizations will administer and control the standard contract terms at the global level? Establish Contract Standards
How does your organization currently create and store contracts? Clauses
Contract Templates
Deliverables
Variables
Do you need to translate your standard terms into multiple languages? Contract Templates
Printed Contract Documents
Does your organization have a formal approval cycle for the standard contract terms? If so, do you need additional approvers to approve business documents with contract terms as compared to business documents without contract terms? Approvals in Oracle Procurement Contracts
What are the processes that you and your suppliers will collaborate on in order to complete and sign off on contractual obligations? Approve and Sign Contracts
Supplier Authored Contracts
What are the standard print formats for your contracts? Printed Contract Documents
Are there standard business rules based on which contract clauses need to be included while authoring a contract? Contract Expert
Is the contract term always the same based on a purchasing document type? Automatic Application of Templates

Process Overview, Implementation Considerations, and Other Considerations

This section provides process overviews and specific considerations for the phases of the contracts life cycle.

Establish Contract Standards

Process Overview

Oracle Procurement Contracts enables you to establish and manage your contract standards in the Contract Terms Library, a feature of Oracle Contracts. You establish your contract standards by defining the standard clauses, contract templates, and contract deliverables that you want to enforce while authoring your contracts.

Organizations that operate globally can use the Contract Terms Library to establish organization-wide standards and enforce them on a global basis. To accommodate local or country specific regulations, an organization may provide local contract library administrators the flexibility of tailoring these global standards.

Create and Approve Standard Clauses

Standard clauses contain the standard business language to be used in contracts.

Contract administrators can create standard clauses in the library, route the clauses for approval, and publish the clauses for use across the organization.

Contract administrators can optionally define alternate or incompatible clauses for a standard clause. Users can insert tokens, called variables, in the clause text. These tokens refer to the structured business terms that are negotiated on a contract. They are replaced with the negotiated values when the contract is printed.

Create and Approve Contract Templates

Companies implement best practices by creating standard contract boilerplates (templates) based on their unique contracting requirements.

Contract templates enable rapid assembly and creation of contracts and minimize the overhead involved in legal review and approval. Contract templates may include a set of pre-defined, pre-approved standard clauses. They may also include deliverables that are tasks or documents required to fulfill a contractual obligation. For instance, organizations may create deliverables to track the submission of a status report on the progress of the contract.

As with standard clauses, contract administrators can route contract templates for approval, after which the contract templates can be used in contracts.

You can create global templates which can be adopted by local organizations and modified based on local organizations' requirements.

Implementation and Other Considerations

This section describes the implementation and other considerations for:

Contract Terms Library

Oracle Procurement Contracts leverages Oracle Contracts' functionality for creating and managing standard clauses and contract templates, including deliverables.

The features provided by Oracle Contracts are:

For detailed description of these features, see Setting Up Contract Terms Library.

Before proceeding with implementation of Oracle Procurement Contracts, you should familiarize yourself with the setup procedures related to establishing contract standards in the Contract Terms Library.

Clauses

Implementation considerations for setting up clauses include:

Other considerations for using clauses include:

Contract Templates

Contract templates are required to author procurement contracts. You can consider managing templates based on your specific needs, such as transaction types, products or services procured, supplier categories, and so on. During contract authoring, users can search for the appropriate contract template by the template name. So make sure the template name reflects the major keywords that users might use during their search.

Implementation considerations for setting up contract templates include:

Contract Expert Rules

Contract Expert is a rule-based contract creation tool that assists purchasing professionals in authoring complex contracts. Using Contract Expert, organizations can define their business policy rules that govern the contract clauses to be included in a purchasing or sourcing document.

Contract Expert rules are defined in the contract terms library. Rules can be applicable to specific templates or applied globally for all contracts authored in the organization. During authoring, Contract Expert leads you through a contract creation questionnaire and automatically adds needed clauses based on the responses that you provided

In addition to author responses, policy rules can also be based on the business terms and other values contained in the purchasing or sourcing document, such as purchasing category, payment term, and agreed contract amount. For example, buying organizations may require additional clauses in contracts for the purchase of hazardous materials, or contracts for which the supplier is located in a specific foreign country.

When setting up Contract Expert for authoring contracts consider the following:

Profile Options

Value Set Restrictions:

Contract Templates and Contract Expert

Creating Expert Rules

Deliverables

Deliverables are contractual commitments and obligations that can be associated to a contract template. This feature is specific to Oracle Procurement Contracts. Some considerations for using deliverables include:

Variables

Oracle Procurement Contracts supports the following types of variables:

Implementation considerations for setting up contract variables include:

Other considerations for using contract variables include:

Negotiate Contracts

Process Overview

The contract negotiation process includes the stages of creating a sourcing document with contract terms, publishing it, gathering responses, and finally making an award.

Online Negotiation for Oracle Sourcing Documents

To enable online negotiation of procurement contracts, Oracle Sourcing must be implemented.

In addition to the standard negotiation processes in Oracle Sourcing, Oracle Procurement Contracts enables buyers and suppliers to negotiate on the contractual terms during a sourcing event and to capture additional information through supplier-updatable contractual variables.

Using Oracle Procurement Contracts, buyers and suppliers can manage deliverables that represent obligations arising from the negotiation process. They indicate the success or failure of the fulfillment of the deliverable by changing the status of the deliverable for the negotiation.

For example, a buyer may require a sourcing supplier to give a project proposal presentation within a month of bid acknowledgement, and can define this requirement as a negotiation deliverable. The supplier performs the presentation, and updates the deliverable status online.

Note: After buyers award business to a supplier, they can create a purchasing document from a sourcing document. All the contract terms are copied over except those that are specific to the sourcing document.

For more information on general negotiation operations in Oracle Sourcing, see the Oracle Sourcing online Help.

Offline Negotiation for Oracle Purchasing Documents

In an offline business scenario, a buyer creates a draft contract in Oracle Purchasing. The buyer and supplier then conduct negotiations offline. When both parties agree on the contractual details, including the contract terms, the buyer submits the contract for internal approval.

Implementation and Other Considerations

This section covers the implementation and other considerations for:

Authoring Negotiation Documents

Implementation considerations for setting up the process of authoring negotiation with contract terms are:

Other factors to consider when implementing the process of authoring negotiation with contract terms are:

Contract Terms Flow Down

If you create a contract template and associate it with document types used only in Oracle Sourcing, it will still be used on a purchasing document created after awarding a sourcing document. You will not, however, be able to reapply the template to the purchasing document. When you change the contract template, the current template will not be available in the search results. Also, you cannot apply this template to a new purchasing document.

Contract Terms Validation in Oracle Sourcing

When you publish or submit a sourcing document with contract terms for approval, the system validates the contact terms for errors and inconsistencies. The system only displays errors related to contract terms, but not the warning messages. Before publishing a contract or submitting it for approval, you should always validate the contract terms for inconsistencies using the Validate option in the Contract Terms page.

For the seeded errors and warning messages, see List of QA Validations.

Online Contract Negotiation

As an integral part of the Oracle Sourcing process, Oracle Procurement Contracts enables you to leverage many of Oracle Sourcing's capabilities for the purpose of contract terms negotiation.

Supported features include:

Sourcing Template Versus Contract Templates

Oracle Sourcing provides the Sourcing Template feature to ease the process of authoring sourcing documents. These templates include attributes, lines, supplier details, and so forth. With Oracle Procurement Contracts, you can also apply a contract template to a sourcing document. Contract templates are not part of the sourcing template. You can apply a contract template and a sourcing template separately to a sourcing document.

Approval Workflow

Some sourcing documents with contract terms may require special approvals. You can achieve this by using the various seeded workflow functions, such as "STANDARDCONTRACT", which checks for the existence of contract terms in a document. You can customize the workflow to submit the document to different approvers, based on whether the document contains non-standard clauses or other criteria that is appropriate to your business.

For details on seeded workflow functions in sourcing approval workflow, see Approval Workflows.

Author Contracts

Process Overview

Contract authoring is the process of adding contract terms to a purchasing or sourcing document.

In order to add contract terms, users of Oracle Purchasing and Oracle Sourcing must first create their business documents.

If Oracle Procurement Contracts is installed, users can then add or view contract terms in the following business documents:

Document Type Required Application
RFI Oracle Sourcing
RFQ Oracle Sourcing
Auction Oracle Sourcing
Response Oracle Sourcing
Quote Oracle Sourcing
Bid Oracle Sourcing
Standard Purchase Order Oracle Purchasing
Blanket Purchase Agreement Oracle Purchasing
Contract Purchase Agreement Oracle Purchasing

Apply a Contract Template

To add contract terms, you must first apply a pre-approved contract template to the business document.

Execute Contract Expert Rules

Expert enabled contract templates may have rules associated with them. Based on your responses to the questionnaire and the commercial terms of the contract, expert includes relevant clauses automatically in the contract.

Modify and Add Contract Terms

After you have applied the contract template, you can modify the clauses and deliverables that were added from the contract template. You can also add clauses and deliverables specifically for the contract.

Manage Contract Document Attachments

With Oracle Procurement Contracts you can manage all your contract document attachments specific to a contract. These attachments can be contractual agreements, contract images or any supporting documents for the contract.

Validate the Contract

You can validate the contract, to check for inconsistencies and errors.

Preview the Contract

You can preview the contract, by generating and viewing an Adobe PDF version of the complete business document.

For more information on creating business documents, see the Oracle Purchasing or Oracle Sourcing online Help.

Implementation and Other Considerations

This section covers the implementation and other considerations for:

Establish Authoring Roles and Controls

Before using Oracle Procurement Contracts, you must determine the roles and responsibilities of the application users. The responsibility, with the seeded Purchasing Super User menu associated with it, will have full access to Oracle Procurement Contracts features. To restrict any functionality to a certain user, you need to exclude the corresponding security function from the user responsibility.

Available function security options include:

For the functions that are available in Oracle Procurement Contracts for user security, see the Seeded Responsibility section of Appendix D.

The following table displays the differences between a responsibility with full access to Procurement Contracts functionality to another responsibility without any access to Oracle Procurement Contracts features.

Full Access to Procurement Contracts No Access to Procurement Contracts
PO Entry form: The Terms window displays the Contract Terms region. Buttons are enabled, varied by the phase of the Authoring flow. PO Entry form: The Terms window displays the Contract Terms region. Buttons are disabled and, if applicable, users can view the contract template name.
Print capability: The generated purchase order PDF document includes the contract terms along with purchase order details. Print capability: The generated purchase order PDF document only includes the purchase order details.
PO Summary form: The With Contract Terms check box is visible and enabled. PO Summary form: The With Contract Terms check box is visible and enabled. Also, users can obtain a list of the purchase orders, open the purchase order, but not view the contract terms.
Copy Function: Users can view the Contract Terms copy choices, all radio buttons are enabled. Copy Function: Users can view the Contract Terms copy choices, radio buttons are enabled. Also, users can copy the purchase order with contract terms to a new purchase order, but cannot view the contract terms on the new document.
View Contract Terms: Users can view contract terms from the PO Summary form. View Contract Terms: From the PO Summary form, users cannot view contract terms. The menu option is displayed but disabled.
The Contract Terms Library setup navigation and Manage Deliverables page is accessible. The Contract Terms Library setup navigation and Manage Deliverables page is not accessible.

Author Contracts

To create a contract, you can choose one of the following approaches:

Finally, when adding standard clauses to a procurement contract, if you perform a keyword search and encounter the error message "You have encountered an unexpected error. Please contact your System Administrator", it is possible that technical issues exist with the text index for clauses. If the text index has not been created, run the concurrent programs -- as detailed in the Using the Keyword Search Feature section -- to resolve the issue.

Using Contract Expert

The contract template for your business document must be Contract Expert enabled in order to use this feature, except in the following case:

Remember the following when you are answering Contract Expert questions on a business document:

Remember to run Contract Expert if you have made changes to the business document. For instance, if you have changed value of Payment Terms in your business document and the change needs to bring in a different clause, you must run contract expert again to bring in the revised set of clauses into the document.

If contract expert brings in clauses under a default section and you decide to move the clauses under different sections, remember to remove the empty sections from the document. The system will not do this automatically.

Remember, if a clause, brought in by Contract Expert, has been made non-standard or replaced by an alternate, the system will not bring back the original clause the next time Contract Expert is run. However, if you have removed the clause from the document and the clause is still recommended, it will be brought back into the document.

If you have Contract Expert rule with a condition that uses the operator ‘Not In’ for a variable (for example, Payment Terms) and assume the business document does not have any payment terms filled in yet, the system will treat null as a valid value in this condition and execute the rule. Remember this behavior when defining rules with ‘Not In’. So, in this case, if you wanted Clause A to be brought into the document if Payment Terms was Not In ‘Net 30, Net 45 or Net 60’, even though the document has no payment terms defined, Clause A will be brought into the document

Using the Contract Deviations Report

Deviations are changes to contract terms in a business document that make them different from the standards established by the following:

Note: Because deviations are based on contract terms and rules associated with a contract template, the concept of contract term deviations does not apply to business documents whose Contract Source is attached document.

Remember, not every change to the business document is reported as a deviation. For instance, if the section name has been modified or the clauses reordered within the document, these are not deviations.

Remember, the Contract Approval Abstract is a powerful mechanism to report justifications for the contract deviations. If you report contract deviations in a special layout, you have several options:

If you plan on using your document attachment as the contract deviations report, do not select the Generate for Approval check box in the document to avoid potentially attaching duplicate and incorrect reports in the approval notification.

Impact of Contract Expert on Deviation Reports

There are special considerations regarding Contract Expert and the reporting of deviations:

Automatic Application of Contract Templates

If you have enabled the automatic application of contract templates for a Purchasing document, that document can be automatically sourced to the appropriate vendor and issued without any buyer intervention with your default contract. The default contract template is applied to all outgoing standard purchase orders, blanket purchase agreements, or contract purchase agreements.

Setup Steps:

  1. Set the system profile PO: Auto Apply Default Contract Templates to Yes.

    Note: This can be set at the Site, Application, Responsibility, or User level as is appropriate for your organization.

  2. Using the Contract Administrator responsibility create the contract template that you wish to be a default and assign the document type to that contract with Default Template enabled.

Supplier Authored Contracts

At times you may receive contract documents authored by a supplier or an external party. For example, you purchase a software program and sign a software license agreement with a software vendor. The software vendor authors the contract, documenting the service level agreements that both parties have consented to. If you need to track these supplier-authored contracts, perform the following:

  1. · Navigate to the Update Contract Source page.

  2. · Set the Authoring Party as Supplier.

  3. · Upload the contract document provided by the supplier.

Oracle Procurement Contracts supports two types of Contract Source, Attached Document and Structured Terms. In the case of Structured Terms, the contract terms are represented by the sections and clauses included in the contract. Otherwise the contract terms are represented by the primary contract document that is uploaded for the contract. You can utilize the Deliverables feature in either scenario.

Collaboration using Microsoft Word

Negotiating contract terms is one of the most important activities that contract administrators, library administrators, approvers and users carry out. Editing is needed in the internal phases of the contract lifecycle, when contracts are authored, reviewed and approved, and also in the external phases, when contracts are negotiated and signed. Oracle Procurement Contracts has an in-built word processor to effectively manage authoring and editing. However, to achieve widespread adoption, Oracle Procurement Contracts also supports standard applications and data, especially when collaborating with external parties, who may not always have the ability or the inclination to adopt new technologies proposed by the internal party.

Oracle Procurement Contracts supports import of the Microsoft Word document and the synchronization of the changes with the structured contract stored in the system. Modifications to the original contract can be reviewed before changes are accepted. This two-way integration with Microsoft Word streamlines the contract collaboration process involving the buyer, contract administrator, legal and supplier. It also provides a non-intrusive, easy to use, bidirectional and reliable integration solution.

Note: For full synchronization with Oracle Procurement Contracts, the Microsoft Word document should be in Microsoft Office 2003 XML format (also known as WordprocessingML). It must have been originally exported from Oracle Procurement Contracts using the Word Export Function.

Master-Child Agreements

Your organization may have a master service agreement (master contract) with a group of pre-approved suppliers, and later you create separate contracts (child contract) for specific transactions. For example, your company already has negotiated a master service agreement for general insurance and liability clauses with an advertising firm. Your company now wants to negotiate a separate contract for a specific advertising campaign with the same general insurance and liability clauses. In this case, you can design a campaign-specific child contract that references the master contract for its general liability and insurance clauses.

To achieve this, you can consider one of the following options:

Referencing a master contract in a standard purchase order does not copy the contract terms from the master contract to the standard purchase order. Instead, the document number of the global blanket agreement or the contract purchase agreement is referenced in the standard purchase order.

Furthermore, contract terms cannot be associated with planned purchase orders and blanket releases. Therefore, do not use a regular blanket purchase agreement as the master contract, if a child contract will need to have additional contract terms.

Global Agreements

Contract templates that are applied to a global agreement (for example, blanket purchase agreement or contract purchase agreement) are also effective in the operating unit that references the global agreement.

Consider the following business case for an organization with two operating units, OU1 and OU2:

You can create global agreement in a central procurement organization and apply this contract template. If you enable the global agreement for other organizations, all operating units can utilize the contract terms associated with the global agreement, and you do not need to author them again in these operating units.

Since the contract terms are now referenced in multiple operating units, while creating a contract template ensure the terms are legally applicable to all the operating units in which it is referenced directly or indirectly.

Miscellaneous Contracts

With Contract Repository you can create miscellaneous contracts, such as license agreements, non-disclosure agreements, and merger agreements, which are not specifically related to the purchasing function. You can create purchase agreements for miscellaneous items that are outside the normal purchasing flow, for which full execution capabilities are not required.

Add Contract Terms to Existing Contracts

Your organization may have critical, high value contracts already is place. You can add contract terms to such contracts and start reaping the benefits provided by Oracle Procurement Contracts such as embedding contract clauses on the contract and managing deliverables.

Printed Contract Documents

Implementation considerations for printed contract documents include:

You should review your layout requirements for all these components, evaluate the default print layouts, and decide if changes are needed.

Other considerations for printed contract documents include:

Review Contract Terms

Implementation considerations for printed contract documents include:

Cancel Contracts

Purchasing document with contract terms can only be canceled from the Enter PO form and not from the PO Summary form.

Approve and Sign Contracts

Process Overview

Approve Contracts

A contract must be approved internally by management, and optionally by legal professionals, before it is sent to the supplier for signing. Depending on the complexity of your contracts, you can route them to different or additional approvers. For example, if some contracts contain non-standard clauses that are specially negotiated, you can route those contracts to legal professionals for additional review and approval.

See the Oracle Purchasing online Help for more details.

Sign Contracts

You must identify contract signatories and establish guidelines for the contract signature process and communicate it across the organization. Oracle Procurement Contracts supports two ways to sign a contract, manually or electronically. In both cases, the supplier's acceptance of the contract is recorded.

Electronic Signature: To enable electronic signature, Oracle E-Records must be installed. During the award process in Oracle Sourcing, you choose "Document And Signature" as the acceptance criteria to require the supplier to electronically sign the purchasing document that is auto-created.

In Oracle Purchasing, to require electronic signature, you set the acceptance criteria to "Document and Signature" while authoring a contract.

After the contract is approved internally, the supplier receives a notification for signature. The supplier signs the contract online. A notification is sent to the buyer, who then signs the contract online. Oracle E-Records keeps the signed contract copies in the evidence store for future reference.

Note: When you create an amendment for a signed document, the acceptance criteria is automatically set to "Document and Signature". You must set acceptance criteria to "None" if you do not require the amendments to be signed by the supplier.

Digital Signature: You can enable Digital Certificate based signatures for your organization whether a contract is signed by supplier or the buyer. Oracle Procurement Contracts utilizes Oracle Workflow technology to enable this feature. Oracle’s digital signature is PKCS7 compliant based on X.509 certificates. You need to obtain the digital certificate from third party certificate provider and upload these certificates to the user’s browser and also the Oracle database.

See the Oracle Workflow User's Guide for details.

Manual Signature: After the contract has been approved internally, the contract document can be e-mailed, or printed and sent to the supplier for manual signature. After the contract has been signed offline, the buyer can record the acceptance of the contract in an Acceptances screen.

For more details on accepting contracts, see the Oracle Purchasing User's Guide.

Implementation and Other Considerations

This section covers the implementation and other considerations for:

Approve Contracts

The following factors are important to the approval process and your contract administrators and buyers should be familiar with them:

Approval Workflow

When a contract has a non-standard clause, you may want to route the contract to additional or different reviewers for special approvals. You can achieve this by using the workflow function seeded in the Purchasing Approval workflows.

For details on seeded workflow function, refer to the Approval Workflows appendix.

Approvals in Oracle Procurement Contracts

You should identify at which point in the business flow you want to customize your approval workflow and you also want to identify the individuals who would be performing the approval at each point. Given the various touch points described below, consider the nature and extent of changes you would require to your various workflow approval programs.

Contract Statuses

With Oracle Procurement Contracts, the existing purchasing document status have additional implications.

The table below lists the event in a contract life cycle and related purchasing document status:

Event Description Status
Buyer has approval authority on the spending amount, but chooses to submit the purchasing document for additional approval. Pre-approved
Internal approver rejects the purchasing document. Rejected
A purchasing document is approved by the internal approver and is waiting for supplier and buyer signatures. Pre-approved
Supplier or buyer rejects the purchasing document during the signature process. Rejected

Execute and Monitor Contracts

Process Overview

A signed document can be executed through the regular shipment and receiving processes supported by Oracle Purchasing. In addition, buyers and suppliers can execute and track additional contractual obligations through the deliverables feature provided by Oracle Procurement Contracts. It is important to note that buyers and suppliers can only manage deliverables that are assigned to them.

This section covers the implementation and other considerations for:

Deliverables

The due date for a deliverable can be set to:

Deliverable due dates that cannot be resolved are not displayed on the Deliverables page until the event that it refers to actually occurs. For example, the system cannot resolve the due date for a deliverable, if it is set to "10 days after the purchase order is closed" until the purchase order is actually closed. The reason is, the system does not know when the contract will be closed. Users will not have visibility to the deliverables until the purchase order is closed.

To avoid the above situation, consider selecting events for which the due dates can be resolved. For example, the "Agreement expires" event for blanket agreement can be resolved based on the expiry date of the agreement. In the case of standard purchase order, you may consider using the event "10 days after purchase order signed" instead of "10 days after purchase order closed."

Supplier Contacts

During contract authoring, users can create one or more deliverables with a supplier contact associated with it. However, in order for the suppliers to follow through and manage these deliverables, they must have registered with Oracle iSupplier Portal as users of the application.

Search Contract Based On Clause Usage

To improve future contract negotiations, or to comply with regulatory requirements, contract administrators or legal may need to periodically review and revise their contract standards. Analyzing the contract language used in existing contracts is a critical step in effectively updating existing standards. Oracle Procurement Contracts enables users to search for all contracts where certain clauses are used, or have been modified. The search can be filtered by various criteria like contracts with a specific supplier, contracts above a certain amount, contracts for one or all Operating Units, or contracts authored using a specific template. Information on the number of times a certain clause has been used or modified is also provided as part of the results.

Using Oracle Procurement Contracts you can perform the following kinds of search:

Administer Contract Changes

Process Overview

You can amend a contract, including contract terms, at any time after the contract is signed. An amendment increments the version of the Sourcing or Purchasing document.

A contract amendment may be initiated by the buyer or the supplier. Buyers need to review and approve change requests submitted by suppliers. To incorporate changes, buyers need to manually update the contract terms after approving the change request.

For details on general amendments in purchasing and sourcing documents, see the Oracle Purchasing and Oracle Sourcing online Help.

Implementation and Other Considerations

This section covers the implementation and other considerations for setting up:

Amendment Cover Pages

With Oracle Procurement Contracts you can create custom layout for the cover page for an amendment document. For detailed instruction on customizing your contract document lay, refer to Setting Up Contract Terms Library.

Supporting Documents

If you have supporting documents for a contract that are critical, then changes to these documents may need to be governed by formal revision process. A formal revision process may require users to submit the changes for internal approval and supplier signature before the changes become effective. For your reference, changes are displayed in the PO Revision History page. To require a formal revision process, you should categorize the supporting document as a "Contract"' in the contract document attachment.

Change Requests

After the contract is signed and accepted by both parties, it can be executed. The supplier can request changes to contract terms using Oracle iSupplier Portal. After the buyer has reviewed and accepted the changes requested, the system does not automatically reflect the changes to the contract terms. The buyer need to revise the purchase order and amend the relevant contract terms.

Printing Amendments

You can make changes to a contract after it is accepted and signed by the supplier and the buyer and it is ready to be executed. Any modification would appear in the Amendment section of the contract PDF file, if the PO: Generate Amendment Documents profile option is set to Yes.

Other considerations include:

Amendment Workflow Functions

Any changes made to a signed contract would require approval. Oracle Procurement Contract provides you with additional workflow functions that you can use for routing the contract for special approvals, in case contract terms are amended. For the seeded workflow functions in the sourcing and purchasing approval workflows, see the Approval Workflows appendix.

Renegotiate and Close Out Contracts

Process Overview

When a contract nears expiration, you may renegotiate or close out the contract. Using Oracle Purchasing and Oracle Sourcing, you can renegotiate the business elements of an existing contract.

If Oracle Procurement Contracts is enabled, you can additionally include contract terms during your renegotiation process.

During the closeout process, you may require one or more tasks to be performed, such as submitting a contract performance report, or creating a budget versus actual cost analysis. With Oracle Procurement Contracts enabled, you can model these tasks as internal deliverables and track them as part of the contract.

For more information on renegotiating and closing out contracts, see the Oracle Purchasing and Oracle Sourcing online Help.

Implementation and Other Considerations

Monitor Expirations

You can specify start and end dates on a blanket or a contract purchase agreement. To track the expiration of the contract, you can create an internal deliverable with a due date such as "one month before agreement expires." The person responsible for the deliverable would be notified and can take necessary actions before the contract expires.

Note that standard purchase orders do not support start and end effective dates. To support closeout and renewal, you can use the Purchase Order Signed event or a fixed due date event when setting up the deliverables.

Contract Renegotiation

Contracts that are currently executed may have to be renegotiated after they expire. You can create a sourcing RFQ or a Reverse Auction from a purchasing document, like a blanket purchase agreement. The relevant attributes pertaining to the purchasing document are copied over to the newly created sourcing document. With Oracle Procurement Contracts, the contract terms associated with the purchasing document are copied over to the sourcing document as well.