Negotiation Lines Grouped into Purchase Orders

After you have made your award decision (and it's approved if necessary), you can complete the award by creating the necessary purchasing documents such as purchase orders or purchase agreements.

When creating purchasing documents, the application groups any backing requisitions according to the logic discussed in this topic.

For purchase orders, the application can combine multiple negotiation lines into a single purchase order whenever the following parameters have the same value:

• Response number

• Requisitioning BU

• Sold-to Legal Entity

Additionally, the awarded lines allocated to requisition lines that have same taxation attributes are combined into a single purchase order.

• Taxation Country

• Document Fiscal Classification

Note: If a negotiation line has no backing requisition, there are no values available for Taxation Country and Document Fiscal Classification.

How Lines are Grouped

When creating purchase order lines, the application combines all awarded negotiation lines with and without backing requisitions into the same PO based on the following:

• The lines have same values for Requisitioning BU, Sold-to Legal Entity, and Response number.

• The lines with backing requisition have same values for the header tax attributes (Taxation Country and Document Fiscal Classification).

If there are lines with backing requisitions which differ in header tax attributes, then the application creates a separate purchase order for lines without backing requisitions and a separate purchase order for each unique combination of header tax attributes.

When a negotiation is processed from a requisition, attachments from the requisition header are copied to the negotiation header instead of each negotiation line. When purchase orders are generated after award, the negotiation header attachments are copied to the PO header.

Attachments with categories: To Buyer, To Supplier, and Miscellaneous are copied from Requisitions to Negotiations. If your negotiation is awarded to multiple suppliers, then the attachments of the category - To Supplier that are specific to suppliers will be copied over to all the purchasing documents. This would result in suppliers receiving attachments that aren't applicable to them. In such cases, the buyer must remove - To Supplier attachments from the negotiation header before creating the purchasing documents.

If there are different Sold-to Legal Entities, then the value for the Multiple Legal Entities on Order controls how purchase order lines are created. The value for Multiple Legal Entities on Order is defined on the Configure Requisition Business Function page in Setup and Maintenance.

If there are different Sold-to Legal Entities, then the value for the Multiple Legal Entities on Order controls how purchase order lines are created. The value for Multiple Legal Entities on Order is defined in the Configure Requisitioning Business Function task which is in the Setup and Maintenance work area, in the Procurement Foundation functional area.

Examples

The following tables provide examples that demonstrate the grouping logic.

Example 1

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification	Purchase Order
1	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
2	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
3	52345	Vision Operations	Vision Operations	none	none	PO1

Outcome Example 1: The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. Since all the three negotiation lines contain same values for Response number, Requisition BU, and Sold-to Legal Entity, a single purchase order is created.

Example 2

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification	Purchase Order
1	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
2	52345	Vision City Operations	Vision Operations	United States	Accounting	PO2
3	52345	Vision Operations	Vision Operations	none	none	PO1

Outcome Example 2: The negotiation line 2 contains a different value for Requisition BU. The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. Due to these conditions, two purchase orders are created, where the first purchase order contains the negotiation lines 1 and 3, and the second purchase order contains the negotiation line 2.

Example 3

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification	Purchase Order
1	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
2	52345	Vision Operations	Vision Operations	United Kingdom	Accounting	PO2
3	52345	Vision Operations	Vision Operations	none	none	PO3

Outcome Example 3: The negotiation line 1 and 2 contain different values for Taxation Country. The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. Due to these conditions, three purchase orders are created with each purchase order corresponding to a negotiation line.

Example 4

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification	Purchase Order
1	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
2	52345	Vision Operations	Vision Operations	United States	Deduction Tax Rule	PO2
3	52345	Vision Operations	Vision Operations	none	none	PO3

Outcome Example 4: The negotiation line 1 and 2 contain different values for Document Fiscal Classification. The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. Due to these conditions, three purchase orders are created with each purchase order corresponding to a negotiation line.

Example 5

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification	Purchase Order
1	52345	Vision Operations	Vision Operations	United States	Accounting	PO1
2	52345	Vision Operations	Vision Operations	United Kingdom	Deduction Tax Rule	PO2
3	52345	Vision Operations	Vision Operations	none	none	PO3

Outcome Example 5: The negotiation line 1 and 2 contain different values for Taxation Country and Document Fiscal Classification. The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. Due to these conditions, three purchase orders are created with each purchase order corresponding to a negotiation line.

Example 6

Negotiation Line	Response	Requisitioning BU	Sold-to Legal Entity	Taxation Country	Fiscal Classification
1	52345	Vision Operations	Vision Operations	United States	Accounting
2	52345	Vision Operations	Vision City Operations	United States	Accounting
3	52345	Vision Operations	Vision Operations	none	none

Outcome Example 6:

The negotiation line 2 contains a different value for Sold-to Legal Entity. The negotiation line 3 isn't backed with a requisition and it doesn't contain values for Taxation Country and Document Fiscal Classification. With these conditions, purchase orders are created based on the setting for Multiple Legal Entities on Order:

• If set to Error, then two purchase orders are created where the first purchase order PO1 includes negotiation lines 1 and 3, and the second purchase order PO2 includes negotiation line 2.

• If set to Allow, then a single purchase order is created with all the negotiation lines.

• If set to Warning, you can determine the grouping of negotiation lines into a single purchase order or multiple purchase orders.

Example 7

Negotiation Line	Requisition BU	Sold-to Legal Entity	Tax Country	Fiscal Classification	Requested Quantity	Award Quantity - Response 1	Award Quantity - Response 2	Allocated Quantity - Response 1	Allocated Quantity - Response 2	Expected Result - Response 1	Expected Result - Response 2	Requisition Status
1	Vision Operations	Vision Operations	United States	Accounting	10	10	10	5	5	PO1 with line 1 (10)	PO2 with line 1 (10)	Line 1 is split and processed
2	Vision Operations	Vision Operations	United States	Deduction Tax Rule	10	10	10	0	0	PO1 with line 2 (10)	PO2 with line 2 (10)	Line 2 is returned to the requisition pool.
3	Vision Operations	Vision Operations	none	none	10	10	0	none	none	PO1 with line 3 (10)	none	none
4	Vision Operations	Vision Operations	none	none	10	0	10	none	none	none	PO2 with line 4 (10)	none

Outcome Example 7:

The negotiation lines 1 and 2 contain different values for Document Fiscal Classification. The negotiation lines 3 and 4 aren't backed with requisitions and don't contain values for Taxation. If a negotiation line backed with a requisition doesn't participate in allocation, it's treated as a sourcing line and is combined with existing purchase order where other sourcing lines are present. If sourcing lines aren't present in this negotiation, then that negotiation line is combined with the existing order only if there is a single purchase for a Requisition BU, Sold-to Legal Entity, and Response number. If there are multiple purchase orders for this combination because of the difference in tax attributes, then this requisition line will form a different purchase order.

The awarded quantity for line 1 is 10 but allocated quantity is 5 for both Response 1 and Response 2. The additional allocated quantity of 5 is treated as sourcing line. The allocated quantity for negotiation line 2 is 0 and therefore it's treated as a sourcing line similar to lines 3 and 4. Since only the negotiation line 1 is considered requisition based line having taxation attributes, for Response 1, lines 2 and 3 are combined with line 1 into PO1 and for Response 2, lines 2 and 4 are combined with line 1 into PO2.