Defining Contract Compliance ​

Compliance Contracts are agreements for procurement that outline definitions, payment terms, limits, and other key transaction details.​

​Within SAP Ariba Procurement, Contract Compliance is a set of features that ensure these agreements are honored, automating adherence and providing insights into performance and savings.

Compliance is enforced by:​

• Automatic line item matching of requisitions​
• Contract related requisition approval rules​
• Receiving against contracts​
• Contract related Invoice Exception Types
• Subscription of contract items into the catalog hierarchy​

This is achieved through the building blocks in the system: ​

• Configuration settings contain the standard rules set by your company​
• Creation of the Contract Request or Contract Terms document which includes all pricing terms

​Controls can be configured for:​

• Contract maintenance - Who has permission to edit the contract?​
• Contract releases - Who has permission to create release orders against the contract?​

Users must be added to specific user groups in order to have permissions to work with contracts. The following groups offer important contract permissions:​

​Contract Release User: They manage the selection of contracts in procurement actions, ensuring alignment with existing agreements.​

Contract Agent: Initiators of contract requests, they lay the groundwork for contract compliance and participate in initial approval stages.​

Contract Manager: Overseers in the contract lifecycle, they refine contract requests and oversee compliance across procurement activities.​

Contract Administrator: Custodians of the contract system settings, they configure and maintain the approval and operational workflows.​

Contract Approver: Gatekeepers of contract progression, they authorize the advancement of contract requests into actionable agreements.​

Contract Terms Bulk Import Admin: Handlers of mass contract data, they ensure efficient data integration into SAP Ariba from various sources.

Contract Requests are the starting point for contracts in SAP Ariba Procurement.​

​There are 3 ways to create contract requests:

• Create manually: Users may be granted access to create contract compliance requests directly in SAP Ariba Buying. A step-by-step Contract Request Wizard guides you through the configuration one step at a time.​
• ​Import from a Microsoft Excel template: Contract requests can be imported via an Excel file formatted with contract terms and pricing. Begin by exporting an existing contract to Excel to use as a template.​
• Create from a Contract Workspace (as the Contract Terms document): When contract compliance is suite-integrated with SAP Ariba Contracts, users can create contract compliance requests as part of a Contract Workspace. Contracts and contract compliance requests can be created, changed, or submitted from the workspace. In this scenario, the Contract Terms document serves as the contract compliance request. Typically, the approval flow is automatic and approval is handled by tasks directly in the Contract Workspace.

Contract Compliance Lifecycle​.

The contract compliance lifecycle for a customer typically starts with the creation of a contract. Once the contract is created, an effective date is set, and it becomes open for use.​

​During the open phase, the contract is actively monitored to ensure compliance with its terms and conditions. This includes tracking expiration dates, limits, and tolerances. ​

If the contract reaches its expiration date or if it is manually closed, it moves into the closed phase. However, if the contract was closed manually, it can be re-opened as long as the expiration date has not passed, and the limits or tolerances have not been exceeded. ​

​In cases where the contract is closed automatically, it can be re-opened by modifying the corresponding contract request. This may involve extending the expiration date or increasing the limits or tolerances to accommodate the customer's needs. ​

Throughout the contract compliance lifecycle, the customer may also initiate contract requests for new agreements or modifications to existing contracts. These requests go through a separate process that includes creating a new contract or modifying an existing one based on the customer's requirements.

Within Contract Compliance, there are two main process types for contracts. During the contract request process, the Release Order Required field determines which process the contract will use.​

Release Required.​

The Release Required field determines the contract type:​

• If set to Yes: The contract will be a Release Order Contract, requiring release orders.​
• If set to No: The contract will be a No Release Order Contract, not requiring orders.

No-release order contracts are typically used for services or when there is a need to handle the following ​aspects of service procurement:​​

• Complexity: When the needs do not fit the standard PO-based procurement process.​
• ​Deliverable and milestones: When there is a requirement to track milestone completion for payment.​
• Recurring and fixed costs: When there is a need for direct invoicing against the contract, sometimes on a recurring schedule.
• Difficulty in forecasting costs: When the details of what was provided may not be available until work is completed​.​
• When there is a need for more detailed monitoring:
  • ​Quality of work, completion of deliverables
  • Services delivered / charged
  • Ongoing payments

To generate or modify contract requests, you have the option to import data from Microsoft Excel spreadsheets. These spreadsheets are widely used for presenting contracts and pricing details.​

​If you have a contract defined in the format of an Excel spreadsheet, you can upload it to Contract Compliance. ​

​To upload an Excel version of a contract: ​

1. In the Common Actions area panel, chooseCreate → Contract Request.
2. Under What would you like to create?, choose Upload Contract Request.​
3. Choose Browse to locate the file. Once you have identified the path to the file, choose OK. The imported contract is displayed on the Summary page of the contract wizard.
4. Make any necessary modifications using the contract wizard, then return to the Summary page.
5. Choose Submit.

   Consider the following important points when importing Excel spreadsheets for contract management:

   • Formula pricing terms for non-catalog items cannot be imported.
   • Two-dimensional formula pricing definitions cannot be imported.
   • If the imported spreadsheet does not include a Buyer Contract ID in the Contract Header worksheet, a new contract request (CR) is created.
   • Spreadsheets can only be imported to create new contracts or modify existing contracts in the Composing state.
   • The maximum number of line items that can be imported is 1,000.
   • If the imported spreadsheet contains a Buyer Contract ID and there is no new version for the contract request, the spreadsheet completely replaces the existing CR.
6. When a new version of the CR exists (in Composing state) and the original CR has been modified, a spreadsheet import does not allow changes to certain fields, including Supplier, Contract Type, Release Required, Allow invoicing against contract, Allow receiving against contract, and Currency on the Contract Header tab, as well as Full Description, Supplier, Supplier Part Number, Supplier Auxiliary Part ID, Unit of Measure, and Unit Price (for customer catalog items) on the Contract Item Information tab.
7. When importing a contract request, the visibility of customer catalog items is not restricted based on purchasing unit filtering or customer catalog view constraints. This means that items included in the contract Excel spreadsheet that users are not allowed to add will still be processed successfully​.
8. When exporting a contract request, the Effective Date and Expiration Date in the export file might be adjusted to the client's time zone. During export, these dates are set to the start of the day (for example, Aug 30 00:00) and then recalculated to the server's time zone (Pacific Standard Time). When the file is imported, the Effective Date and Expiration Date are recalculated from the server's time stamp to the client's time zone.

For information about how to export and import Excel spreadsheets, see About Creating and Managing Contracts