About contract classifications in Contract Management

During general setup of Contract Management, you make some important decisions that affect contracts. These decisions include security access to contracts, as well as the processing and approval of contracts.

An example of securing access to contracts is setting up a contract classification for a specific group of people in the company, such as the legal department. Contract classifications are a way of grouping contracts for reporting and selection.

The following options are set when you create a contract classification.

• Contract Approval Options - indicate if a contract is to be routed to the supplier for negotiation, and whether it is to be routed within the company for approval before (or after) negotiation.

• Contract Addendum Approval Options - indicate if an addendum is to be routed to the supplier for negotiation, and whether it is to be routed within the company for approval before (or after) being sent to the supplier. Contract addendums are significant changes made to contracts that require a new contract document be created (listing the header and new or changed contract information). With addendums, any contract changes are possible.

• Contract Amendment Approval Options - indicate if an amendment is to be routed to the supplier for negotiation, and whether it is to be routed within the company for approval before (or after) being sent to the supplier. Contract amendments are changes made to contracts that do not require a new contract document to be printed. With amendments, contract changes other than to terms and conditions are possible.

• Contract Line Options for Non-Service Items - decide whether contract lines containing itemmast and special items require a commodity code, manufacturer code, and manufacturer number.

• Contract Line Options for Service Items - indicate whether contract lines containing service items require commodity code. Service items are requests for a service to be performed, such as repair or cleaning. For more information on item setup, see the Inventory Control User Guide.

• Item Creation - indicate whether to require item master approval for special items. When this setting is checked, contract line items are not allowed to be turned into agreement lines and create Item Master items until they go through an approval process.

• Default - select a default contract template and contract addendum template for contracts belonging to a specific contract classification and subclassification.