Eligible Contract Application

After the system locates an eligible contract on which to base a requisition or purchase order, it:

1. Updates the requisition or purchase order line with contract information when the information exists on the contract, including:

   • Contract ID.

   • Contract line number when a contract line number is referenced.

   • Category line number when a contract category is referenced.

   • Group ID for purchase order lines only.

   • Release number.

   • Milestone line for purchase order lines only.

2. Determines the base price when the contract line item is referenced.

   The system uses the contract base price if it is specified on the contract. Otherwise, it uses the item/supplier price. For requisitions, the system calculates the contract price.

3. Calculates price adjustments:

   • For item IDs, you can establish price adjustments at the contract level, item/supplier level, or both. You can also establish whether the system calculates item/supplier price adjustments before or after the contract price adjustments.

   • You can establish ad hoc line price-adjustments only at the contract level.

   • You can establish price adjustments on the contract at the category level and open-item reference level. When referencing a contract at the category level or open-item reference level, the corresponding price adjustments along with whether the system calculates item/supplier price adjustments before or after the contract price adjustments will apply.

4. Updates the contract released amounts and quantities for contract releases on purchase orders.

   The contract reference on a requisition does not update the contract release amounts and quantities. However, after the contract is built into a purchase order, the system updates the released amounts and quantities.

5. Creates contract events.

   Events (releases) are the association of contracts referenced on purchase orders. You can inquire about the events using the Review Contract Information menu.