Association of Goods and Services With Contracts

Before you start creating contracts, you should identify and use the contract process options that are most appropriate for the organization's business processes. The contract process option must be the Purchase Order, General Contract, Manufacturer, or Release-to-single PO Only to qualify for use at the requisition or purchase order line level.

The PeopleSoft Procurement Contracts feature gathers essential elements of contract transactions. You can define one or multiple contracts for suppliers. You can optionally set up contracts with an overall maximum amount and an expiration date, along with amount threshold and expiration date notifications.

You can associate goods and services with a contract in several different ways:

• The first is using one contract for all items ordered from the contract's specified supplier by using the Open Item Reference feature on the contract. You can define general or ship-to-percentage-based price adjustments that are applicable to all items for the supplier.

• The second way is by defining specific item categories on the contract along with item exceptions for the category. This means that any item you order from the supplier for the contract categories can reference the contract as long as the item is not listed as an item exception. You can also define general or ship-to-percentage-based price adjustments for each category. You can also specify a maximum order amount for the category.

• The final way for associating goods and services with contracts is by defining specific items or services on the contract. You can enter specific item IDs or order-by-description (ad hoc) commonly used for services. Orders with the supplier and item or service that match the contract can reference the contract. You can define general or ship-to-percentage-based adjustments or unit of measure amount-based or percentage-based adjustments for the items or services.

Note:

If you are using PeopleSoft Services Procurement, you must enable service contracts on the Installation Options page to add service contracts. Service contracts are only applicable to resource-based roles to secure with suppliers for hiring service providers at specific rates.

Note:

PeopleSoft Services Procurement checks for contracts during bid communications with suppliers and also checks for contracts from work orders. The application ensures that it's using the correct contract version based on the status and date. The application also checks for contracts by category in addition to contracts for specific services.