About contract classifications

Contract classifications are required when you add a contract. With contract classifications, you have a way of categorizing and organizing contracts. Examples of contract classifications might include: Corporate, Company/Facility Specific, Local, Departmental, Maintenance or IT. When you add a classification, you make decisions that affect the contracts, addendums, and amendments that are assigned to that classification.

The two primary purposes of the classification are security and the flow of the contract. Classifications determine which process automation flow to use and the flow of the contract. Security is driven from classification to determine who can see which contracts. If a contract subclassification is attached to the classification, the rules that are defined in the contract subclassification will take precedence.

The following explains the type of decisions you make:

• Decide whether a contract, addendum, or amendment requires approval before or after starting negotiations with your supplier, and whether to require negotiations with your supplier.

• Decide whether to receive notification when the text of a term and condition changes.

• Decide whether commodity code, manufacturer code and manufacturer number are required for service and non-service items (item master or special items) on a contract line.

  For information on manufacturing codes, see the Inventory Control User Guide.

• Decide whether to use the item master approval process, which allows for an item not to be created through a vendor agreement, but instead requires the item be set up before you send the contract line to an agreement.

• Decide on a default document template to use with contracts assigned to this classification.

• Decide whether contracts assigned to this classification are eligible for creating events in the Strategic Sourcing application.

After setting up a classification, you can optionally assign a subclassification to it. You make the same decisions as for the classification. In cases where a contract has both a classification and a subclassification, the settings for the subclassification are used.