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Oracle® Fusion Procurement, Supplier Contracts and Agreements Guide
11g Release 5 (11.1.5)
Part Number E22850-06
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Authoring a Supplier Contract: How It Works

Contract Actions and Status Changes: Explained

Authoring Contracts Using the Contract Wizard: How It Works

Contract Validation: Explained

Importing Contracts: Explained

Frequently Asked Questions for Creating a Supplier Contract

Amending a Contract

Contract Relationships: Explained

Contract Printing and Layout Templates: Explained

Authoring a Supplier Contract: How It Works

This topic explains the process of authoring a supplier contract by selecting the Create Contract task in the Contracts work area.

The following figure outlines the process described in the sections of this topic.

  1. In the Create Contract window, you enter the basic information required to create the supplier contract.

    Selecting the contract type determines what additional information you can enter.

  2. The application creates the enterprise contract and displays it for you to edit.

  3. Enter additional contract details.

  4. Depending on the contract type, you can:

  5. Validate the contract and correct any errors.

  6. Submit contract for approval.

This figure outlines the process for
authoring a supplier contract.

Entering Basic Contract Information

In the Create Contract window, you enter the basic information required by the application to create the contract. This includes:

Depending on the business unit and contract type you selected, you may also be asked to enter:

Restriction

You cannot change the business unit, the legal entity, the contract type, and the contract number after the contract is created.

Adding Contract Information to the Contract Header

On the contract Header tab, add additional information depending on the contract type you selected. This may include:

Adding Contract Lines

If the Lines tab is visible, add contract lines to specify the items you are purchasing. Depending on the contract type, you may be able to enter one or both of the following types of lines:

Authoring Contract Terms

The authoring of contract terms and conditions is enabled on your contract if the Contract Terms tab is visible.

Just what actions you can take during contract terms authoring depends on your implementation, your privileges, and contract type. Some contracts may have their contract terms already populated from a contract terms template and permit you only to add and delete clauses from the Contract Terms Library. Other contracts may allow you to create nonstandard clauses or require you to answer questions to determine if additional clauses are required. For some contracts, you may attach the contract terms in a separate document and not use the authoring capabilities of the application at all.

If you do author contract terms for your contract, select the Review Contract Deviations action on the Contract Terms tab to determine if your contract deviates from your company standards. You can add any explanations for the deviations in the report which can be attached to the notification sent to the contract approvers.

Creating Contract Deliverables

You can create contract deliverables if the Deliverables tab is visible.

Contract deliverables make it possible for you to track goods, services, reports, and other deliverables you are purchasing. Depending on the type of contract you are creating, you can use contract deliverables to initiate the creation purchase orders or purchase agreements within Oracle Fusion Purchasing or in other integrated purchasing applications and monitor their fulfillment from within the contract. The contract must be active before you can initiate the creation of the purchasing documents.

You can create contract deliverables on the Deliverables tab or you can automatically create deliverables prepopulated with the information in the contract by selecting the Autocreate Deliverable action from the Actions menu at the contact level or on the Lines tab. See related topics for more details.

Validating and Submitting the Contract for Approval

The contract must pass validation before it is sent for approval. To validate the contract, select Validate from the Actions menu. Clicking the Submit button to submit the contract for approval also triggers the same validation process. You must fix all errors for the contract to pass validation. Resolving warnings is optional.

Contract Actions and Status Changes: Explained

A contract typically moves through a variety of states throughout its lifecycle, from initial drafting to negotiation to active management and eventually contract closeout. A contract status indicates where a contract is in its lifecycle, and also determines what actions and operations are permitted for the contract.

Note

Contract statuses are predefined and you cannot define new statuses.

The following table describes the available contract statuses and lists the permitted actions for each:


Status

Description

Available Actions and Resulting Statuses

Draft

The initial status of a contract

  • Cancel

    Resulting status: Canceled

  • Submit for approval

    Resulting status: Pending Approval

  • Delete (No resulting status)

Canceled

The status of a contract changes to Canceled when the draft is canceled.

Delete (No resulting status)

Pending Approval

The status of a contract changes to Pending Approval when it is submitted for internal approval.

  • Approve

    Resulting status: Active

    If acceptance is not required, based on the contract type, the status immediately changes to Active.

  • Approve

    Resulting status: Pending Acceptance

  • Approve

    Resulting status: On Hold

    When a contract is approved, if there is an existing Hold on it with Hold date later than the system date, its status changes to On Hold.

  • Reject

    Resulting status: Draft

  • Reject

    Resulting status: Under Amendment

    This status results if the contract has a previous active version.

Pending Acceptance

The status of a contract changes to Pending Acceptance when it is internally approved but is pending customer or supplier approval.

  • Accept Contract

    Resulting status: Active

  • Accept Contract

    Resulting status: On Hold

    When a contract is accepted, if there is an existing Hold on it with Hold date later than system date, its status changes to On Hold.

  • Create New Version

    Resulting status: Draft

    When a contract is pending acceptance, if a new version of it is created, its status changes to Draft.

  • Create New Version

    Resulting status: Under Amendment

    If a contract, version v1, is active, and its next version v2 is pending acceptance, and if a new version of v2 is created, the status of the new version v3 is Under Amendment.

Active

The status of a contract changes to Active when it is fully approved.

  • Amend

    Resulting status: Under Amendment

  • Apply Hold

    Resulting status: On Hold

  • Close (Terminate)

    Resulting status: Closed

On Hold

The status of a contract changes to On Hold when a hold is applied.

Note

You can apply a hold on a contract or a contract line.

  • Amend

    Resulting status: Under Amendment

  • Remove Hold

    Resulting status: Active

  • Close (Terminate)

    Resulting status: Closed

Under Amendment

The status of a contract changes to Under Amendment when it is amended.

  • Submit for Approval

    Resulting status: Pending Approval

  • Revert

    Resulting status: Active

    The status of a contract under amendment changes to Active if the latest changes are canceled by reverting. The contract returns to its pre-amendment state.

Closed

The status of a contract changes to Closed when you close (terminate) it. Closed status implies either a foreclosure or a closeout after expiration.

No resulting status.

Expired

The status of a contract changes to Expired when its end date is reached.

  • Amend

    Resulting status: Under Amendment

  • Apply Hold

    Resulting status: On Hold

Note

When a contract is Active, Pending Acceptance, On Hold, Under Amendment, or Expired, if the contract end date is reached, the application automatically changes the contract status to Expired.

The following figure shows a contract flow from draft to approval to acceptance.

Contract approval and acceptance flow

The following figure shows contract amendment, contract delete, and contract hold flows.

Contract amendment, contract delete,
and contract hold flows

Authoring Contracts Using the Contract Wizard: How It Works

You can select the Create Contract in Wizard and Edit Contract in Wizard tasks to quickly author enterprise contracts using a guided process.

The Contract Wizard guided process is different depending on the origin of the contract terms. If the contract terms originate internally in your organization, then you add the contract terms by applying a contract terms template. If the contract terms originate from an external party such as a supplier, then you upload the file containing the contract terms because the contract terms are authored outside the application.

The following figure outlines how Contract Wizard guides you to create a contract where the contract terms originate with an internal party:

  1. You select Internal as the authoring party and enter basic contract information on the same Create Contract window you use for authoring without the wizard.

  2. The application displays the page of the Contract Wizard where you can select and preview the contract terms template you want to use. Depending on the setup, the application may recommend the template or let you select one of your own.

  3. Depending on the business rules set up for the selected template, you may be required to enter values for contract variables (Step 3) and to answer questions (Step 4). These steps are the equivalent of running the Contract Expert. On this figure they are outlined in dashed lines.

  4. Based on your entries in Steps 3 and 4, the application may insert additional clauses into the contract terms.

  5. You can upload supporting documents.

  6. You preview the contract terms, including any additional clauses inserted by the application.

  7. If you are satisfied, you click Submit on the Review Contract page to trigger the contract validation process. If there are no validation errors, the contract is submitted for approval.

  8. If you need to make changes, you save instead of submitting and can either select the Edit Contract in Wizard action to revise what you entered in the wizard or you can select the Edit Contract action if you need to add contract lines and other contract details or if you need to edit the contract terms.

This figure outlines the contract authoring
process using the Contract Wizard for an internal party.

Here is how Contract Wizard guides you to create a contract with contract terms an external party supplies in a file:

  1. You select External as the authoring party and enter basic contract information on the Create Contract window.

  2. You upload the file containing the contract terms as the primary contract document and any other supporting documents.

  3. You review the contract information.

  4. If you are satisfied, you click Submit on the Review Contract page to trigger the contract validation process. If there are no validation errors, the contract is submitted for approval.

  5. If you need to make changes, then you can save the contract and either select the Edit Contract in Wizard action to revise what you entered in the wizard or you can select the Edit Contract action if you need to add contract lines and other contract details.

This figure outlines the contract authoring
process using the Contract Wizard for an external party.

Entering Basic Contract Information

To create the contract, you select the contract type and enter basic contract information, including the contract party and the contract amount. If you set the Authoring Party field to External, then the contract terms are being authored outside the application in a separate document which you upload in the Upload Documents page.

Selecting and Previewing the Contract Terms Template

If the Authoring Party is Internal, then, depending on the setup, the application recommends a contract terms template or lets you select one of your own. You can preview templates with the click of button. The preview does not provide the same formatting as the final contract and does not include any clauses that may be inserted by the application in later steps.

Entering Variable Values

Depending on the business rules for the selected template, you may be required to enter variable values. The application substitutes the values in the contract and may use them to determine if additional clauses are required. This step is the equivalent to entering variable values using the Editing Variable Values action or running the Contract Expert feature during authoring without the wizard.

Answering Questions

You may also be required to answer questions. The application uses your answers to determine if it needs to insert additional clauses into the contract. This step is equivalent to running Contract Expert during authoring when you do not use the wizard.

Uploading Documents

You can upload files as attachments to the contract. If you selected External as the Authoring Party, then you must upload the file with the contract terms as the primary contract document. If the contract terms come from the template, then the primary contract document is generated by the application automatically at the time you submit the contract for approval.

Reviewing the Contract

You can review the final contract terms, including any additional clauses inserted by the application. The displayed contract terms are formatted for HTML, they do not contain all of the formatting of the final document. If you want to view the entire contract with all the formatting, select the Preview Contract button. The PDF version is the version that is sent to approvers when you submit the contract for approval.

Editing the Contract and the Contract Terms

You can edit basic contract information using the Edit Contract in the Wizard action. Using the Edit Contract action, you can edit both the contract and the contract terms in the contract authoring pages. This permits you to add contract lines and other contract details, if required.

Contract Validation: Explained

Contract validation performs a series of checks that determine if your contract can be submitted for approval. You must correct all errors. Fixing the warnings is optional.

You can validate your contract at any time during contract authoring by selecting the Validate Contract action. The same validation is performed automatically when you submit the contract for approval.

Required Information

The application checks the contract for the following:

Date Validations

Date validations include the following checks:

Validations for Supplier Contracts

Validations for supplier contracts include:

Validations for Customer Contracts

Validations for customer contracts include:

Parties, Accounts, and Sites

These validations include checks such as:

Importing Contracts: Explained

You can import contracts into the application from a source file using file-based import. To initially set up file-based import for importing contract data, select the Manage File Import Objects and Manage File Import Mappings tasks. To schedule your contract imports, select the Manage File Import Activities task. These tasks are available by selecting Setup and Maintenance from the Tools menu and searching on the task name.

File-based import supports the import of data from an external text or xml file to interface tables and then from interface tables to target application tables.

This topic describes:

What You Can Import

Contracts for import can be in Draft, Active, or Expired status but must not have lines. The import file can use names as well as IDs to identify data, for example, Party ID or Party Name. You can import only one version for each contract, with the following data:

You can import new contracts, but you cannot update or delete existing contracts through imports.

Interface Table

The application uses the following database table for importing contracts:


Table

Description

OKC_IMP_CONTRACT_HEADERS

The interface table used to load contract data from external systems. This table maps to logical contract data: contract header, contract party, contract party contact, contract terms, and contract attachments.

Details about the fields and valid values for import are available from the Oracle Enterprise Repository for Oracle Fusion Applications.

Importing Contracts From a Source File

To import contracts, use the file-based import feature and upload contract data into the interface table. To access this feature, select the Manage File Import Activities task, available by selecting Setup and Maintenance from the Tools menu and searching on the task name. A detailed description of how to import data using file-based import is described in a related topic.

Note

An import mapping, which details the mapping between source file columns and contract attributes, is provided in the Edit Import Activity: Map Fields page for your use, but you can define additional import mappings if required.

Frequently Asked Questions for Creating a Supplier Contract

How can I specify contract risk?

You can specify contract risks by selecting the risk type, probability of such risk occurring, impact of such a risk, and any other relevant comments. You can record the occurrence of any of these contracts risks by entering the date of occurrence for the contract risk, at any point of time.

Recording contract risks helps your organization prepare for potential problems. It does not affect contract processing.

Note

Entering or editing contract risk information does not require you to amend the contract.

How can I set up contract risk?

You can set up the list of contract risks by selecting the Manage Risks task from the Setup and Maintenance work area. Contract authors use this list during contract authoring to record contract risks.

Recording contract risks helps your organization prepare for potential problems. It does not affect contract processing.

Note

Risk names must be unique.

How can I record sales credits for each salesperson?

You can record sales credit for each salesperson by selecting the salesperson name, credit type, and credit percentage on the contract's Parties tab.

The sum of all sales credits must be 100.

What type of documents can I attach to a contract?

You can attach any kind of file, including images, to a contract in the Documents region of the contract Header tab.

Files or URLs added in the Contract Document region can only be updated when the contract is in the Draft or Under Amendment statuses. You can classify the documents you attach in this region as:

The files or URLs you add to the Supporting Document region can be updated at any time.

The files you attach are automatically submitted for indexing so they are available for text searches.

Note

If you create a new version of a contract, the application automatically carries the attachments forward to the new contract version.

When can I create a new contract version?

You can create a new version for a contract when it is in Draft, Under Amendment, or Pending Acceptance status.

Create a new version when a customer or supplier requests changes in a contract that is internally approved and pending acceptance. The new version will be in Under Amendment status enabling updates.

Note

Amending an active contract results in a new version for the contract.

What happens to document attachments when I create a new contract version?

When you create a new version of a contract, the application carries the attached documents forward to the new contract version.

How can I delete draft or canceled contracts?

You can delete draft or canceled contracts by selecting the Delete action. You can delete either all versions or only the current draft.

You can delete a version of a contract only if the contract has more than one version. Selecting the Delete action when there are multiple versions provides two options, Delete Current Version Only, and Delete All Versions. Deleting the current version reverts the contract to its previous version while deleting all versions removes the contract and all its versions.

If there is only one version for a contract, selecting the Delete action asks for a confirmation, and deletes the contract.

How can I set up a contract renewal notification?

You can set up contract renewal notification during contract type set up.

To be notified about the contract end date in advance, you must specify the following in the contract type set up:

Note

Note the following while setting up renewal notifications:

Amending a Contract

Amending and Reverting a Contract: Explained

Update an active contract by selecting the Amend action. Cancel the changes and return to the original active contract by selecting the Revert action.

Amend a Contract

If you amend a contract, its status as well as the status of its contract lines change to Under Amendment, and all processing is put on hold. You can also amend a contract when its status is On Hold or Expired. Processing resumes after the amended contract is approved or rejected.

If the amendments are approved, the contract status changes as follows:

Note

You can create a new version of a contract that is under amendment.

You can edit some information in an active contract without amending it. This includes the contract description, name, and party information. For customer contracts related to projects, you can place a hold on the billing and revenue plans.

Revert a Contract

When you revert a contract, changes made in the latest amendment and changes made through Create New Version are canceled. The contract returns to its pre-amendment state.

You can revert contract changes only when it is Under Amendment. You cannot revert after the contract is approved.

Note

Reverting does not affect the contract information that you edit without amending the contract.

Frequently Asked Questions for Amending a Contract

How can I revert a contract to a previous active version?

Revert a contract to its previous active version by selecting Revert action when the contract is under amendment.

You cannot revert a contract after the amendment is approved.

Can I modify a contract without amending the contract?

You can modify certain contract attributes that do not pertain to the actual legal agreement between the parties, without having to place the contract under amendment:


Tab/Page Region

Attributes

Overview

Description, Name

Parties

All fields of Contacts table

Risks

All attributes

Interactions

All attributes

Notes

All attributes

Bill Plan

Manual Hold

Revenue Plan

Manual Hold

How can I change a contract that is pending acceptance?

In cases where a customer requests changes in a contract that is internally approved and pending acceptance, you can create a new version for that contract to make the required changes.

If you create a new version of a contract, the contract status changes to Under Amendment, and the original version is no longer available for approval.

Note

You cannot create a new version after the contract is approved. You can create a new version only for a draft or under amendment contract.

Contract Relationships: Explained

Contract relationships are associations between two or more contracts. Contract relationships provide supporting and referential information for negotiating contracts. For example, a software sales contract can be related to a hardware purchase contract, so that pricing discounts for software support are based on volume of hardware purchases.

You can add, update, and remove contract relationships. Before you define a contract relationship, you must set the Enable Related Documents option in the contract type. You can create relationships only at the header level, not at the line level.

The following rules apply to contract relationships:

Contract Printing and Layout Templates: Explained

Previewing and printing clauses, reports, contracts, and contract terms uses a number of Oracle Business Intelligence (BI) Publisher layout templates which specify what information is displayed in the contract and supply the headers, footers, text style, and pagination. The layout templates are RTF files stored in the BI Presentation Catalog. Samples of all the required layout templates are included with the application. You can copy the sample layout templates described here, and edit the copies to add your own boilerplate text, font styles, and logos.

You can copy and edit layout templates used for:

The sample layout templates are available in different subfolders within the Enterprise Contracts folder in the catalog. You can navigate to the folders in the catalog either from the Reports and Analytics pane or by selecting the Reports and Analytics link in the Navigator. Contact your system administrator to grant you the appropriate BI duty roles if these are not available.

You can download the sample templates, copy them, and edit the copies. When you upload your edited copy to the same directory, it becomes immediately available for use within the application.

Restriction

The catalog includes additional layout templates which are used internally by the application. You can edit only the layout templates listed below.

Printing Enterprise Contracts

The application uses two layout templates for printing enterprise contracts, including partner agreements:

You specify which templates you want to use during contract type setup. This means that you can create different layout templates for each contract type. To set up contract types, select Manage Contract Types action from the Setup and Maintenance work area or Contract Types under the Setup task heading in the Contracts work area.

The following figure outlines how the application uses the layout templates when you print an enterprise contract:

  1. The application uses the contract layout template, specified in the Contract Layout field of the contract type, to create a PDF of the contract. If the contract does not include any contract terms, this is the only layout template used.

  2. If the contract includes structured terms, then the application uses the contract terms layout template specified in the Terms Layout Template field to create the contract terms PDF. To create the contract terms PDF, you must set the terms layout template in contract type.

  3. If the contract terms are attached as a file and the file retains the structured terms format, the application creates the contract terms PDF from the file. Contract terms attached as a file can retain the structured XML format if the file was downloaded from the application using the Download Contract action.

  4. The application merges the two generated PDFs into a single PDF.

  5. If the contract terms are attached in a file that is not structured, then the application prints only the contents of the file. It does not print the contract information in the application or use either layout template. If you need help in editing the layout templates, download the sample XML file provided in Enterprise Contracts > Contract Printing > ContractPrintDm.

This figure shows how enterprise contracts
are printed.

Printing of Contract Terms on Purchase Orders and Sourcing Documents

For printing purchasing documents with structured terms, Oracle Fusion Procurement uses two layout templates.

You select both of these templates while setting up business unit properties using the Configure Procurement Business Function task available by navigating to the Setup and Maintenance work area.

If the contract terms are attached rather than authored in the application and the attached file is not structured, then Procurement uses a third layout template which includes a brief sentence explaining that the contract terms are contained in a separate document.


File Name

Description

Location in BI Publisher Catalog Directory

ContractTermsNoMerge

This layout template includes the following text: The contract terms for this (doc type} are listed in a separate document which is either attached to the e-mail you received or sent separately. These contract terms should be read in conjunction with this {doc type}.

The document type name is substituted in the printed contract.

Enterprise Contracts/Contract Terms Printing/Attached Contract Preview

Important

If you edit the ContractTermsNoMerge layout template, then you must save it under the same name in the same directory.

The following figure outlines how the procurement application uses these layout templates for printing

  1. The application uses the document layout template specified in the Document Layout field in the PO or purchase agreement to create the PDF.

  2. If the contract includes structured terms, then the application uses the contact terms layout template to generate the contract terms PDF.

  3. If the contract terms are attached as a file and the file retains the structured terms format, then the application creates the contract terms PDF from the file. Contract terms attached as a file can retain the structured XML format if the file was downloaded from the application using the Download Contract action.

  4. If the contract terms are attached as a file that is not structured, then the application creates a small PDF of the message contained in the layout template ContractTermsNoMerge.

  5. The application merges the two PDFs into a single document PDF.

This figure shows how procurement documents
are printed.

Printing the Contract Deviations Report

The application uses the contract deviations layout template to generate a PDF report of deviations of a contract from company standards. This report can be automatically attached to the notification sent to the contract approvers during contract authoring. You can create different layout templates for each business unit. You specify which layout template you want to use in a specific business unit using either the Specify Customer Contract Business Function Properties or the Specify Supplier Contract Business Function Properties tasks. These tasks are available in the Setup and Maintenance work area.

Separate sample layout files are available for buy-intent and sell-intent contracts. Both are located in the same directory:


File Name

Description

Location in BI Publisher Catalog Directory

SupplierContractDeviations

Layout for printing the contract deviations for all buy-intent contracts.

Enterprise Contracts/Deviations Report/Deviations Report

CustomerContractDeviations

Layout for printing the contract deviations for all sell-intent contracts.

Enterprise Contracts/Deviations Report/Deviations Report

Previewing Contract Terms Templates

Contract Terms Library administrators as well as contract authors can preview the content of a template by selecting the preview icon. For example, a contract author may want to preview a template to verify they are selecting the correct one. The preview lists all the clauses and sections the template contains and any boilerplate included in the layout template. It does not list any additional clauses inserted by Contract Expert rules.

You can create different layout templates for each contract terms template. You specify the layout template to be used for the preview on the General tab while editing the contract terms template. The sample layout template is:


File Name

Description

Location in BI Publisher Catalog Directory

ContractTermsTemplate

This layout template specifies the layout of the contract terms template preview.

Enterprise Contracts/Contract Terms Printing/Contract Terms Download and Preview

Previewing and Importing Clauses

The application uses the clause layout template for:

You can specify which template you want to use in a specific business unit using either the Specify Customer Contract Business Function Properties or the Specify Supplier Contract Business Function Properties tasks. These tasks are available in the Setup and Maintenance work area.

The sample layout template provided is:


File Name

Description

Location in BI Publisher Catalog Directory

ContractTermsLibraryClause

Specifies the layout of clause text in the Contract Terms Library.

Enterprise Contracts/Contract Terms Printing/Clause Export and Preview