Using the Contract Request Wizard

To manually create a contract request in SAP Ariba Buying, follow the steps below:

1. Log into your SAP Ariba solution.​​
2. On the dashboard, select Create, then choose Contract Request.
3. The system will ask, What would you like to create?. Choose Contract Request.​
4. Use the Contract Request Wizard to create the request step-by-step.

In Step 1 of the Contract Request Wizard, the basic header information for the contract is defined including the contract’s title, description, effective and expiration dates, hierarchy and contract type, and whether to allow accumulation of spend.​

In this step, the release required field is also used to determine if the contract will be a release order contract or no release order contract.

Dates:​

• Effective date - The date on which users can begin to issue release orders. A contract can be created with a future effective date to prevent releases until the set date.​
• Expiration date - The final date on which release orders can be issued against the contract. ​
• Evergreen - Select Yes to create an evergreen contract (a contract that does not expire). Select No to create a contract that does expire. If you select No, you need to set the Expiration Date.

In the definitions step of the Contract Request Wizard, enhanced purchasing unit filtering can be applied to contracts to support selection of the best contract terms during requisitioning or invoicing, and enhanced selection of parent agreements during subagreement creation.​

​Contracts at the purchasing unit level also apply to child purchasing units.​

​For example, you can create a contract at country/region level (parent purchasing unit) that applies to all plants (child purchasing units) in that county/region. But a plant might have negotiated another contract with the same supplier for better terms, in which case that plant’s contract will be used.

In the example chart below, the contracts are applied as follows:

• Plant 1 will have access to all three contracts: C1 (its own contract), and C2 and C3 (contracts specified for the parent purchasing units which applies to all children).
• Plant 2 and UK will have access to contracts C2 and C3.
• Plant 3, Plant 4, France, Germany, and Western Europe will have access to contracts C3.
• Plant 5, Plant 6, Poland, Czech, and Eastern Europe will have access to contracts C4.

In Step 2 of the Contract Request Wizard, contract limits, notification parameters, the preload amount, and forecasted spend are defined.

Contract limits enforce boundaries on the total amounts or quantities that can be charged against a contract at the header level.​

If the contract’s limits are exceeded, SAP Ariba will automatically close either the contract or the line items that have exceeded the maximum commitment plus tolerance. This is called Limit Compliance.

The diagram below illustrates the following compliance rules:

• Overall Limit - Independent of line-item limits, if the overall limit is exceeded by the specified tolerance, the contract is Closed. A contract can go beyond the maximum limit and remain open until the tolerance is reached.
• Line Item Limit - The contract is Closed when all item limits exceed tolerances. The contract remains Open as long as at least one line-item limit is below tolerance. Individual items are made unavailable as they exceed their tolerances.

Notification triggers can be configured to alert involved parties when specific contract conditions are approaching or have been breached.

Release limits control the ordering process within contracts by setting boundaries on the order amounts or quantities for materials and services.​

​Release limits are configured on the Pricing Terms page of the Contract Request Wizard.

• Contract level release limits set overall minimum or maximum order amounts or quantities for all items included in an order.​
• Item level release limits manage limits for each specific line item.​
• Catalog level release limits apply limits to all items included in specified catalogs.​
• Commodity level release limits establish limits for categories of goods or services based on commodity code.

Tolerance percentages can be applied to both hard and soft limits, affecting how strictly limits are enforced during ordering and invoicing processes.

Spend accumulation settings determine how contract quantities and amounts are tracked between contracts in a hierarchy.​

​Spend is tracked within each contract, but can also be accumulated up the hierarchy levels to the parent agreement.​

Using different combinations of these settings, you can determine exactly how spend is accumulated throughout a contract hierarchy.​

The two main settings that control spend accumulation are as follows:

1. In the Definitions (step 1) of the Contract Request Wizard, the Include Subagreement Accumulators setting determines if subagreements can be accumulated in the parent agreement.​
2. Later, in the Pricing Terms (step 3) of the Contract Request Wizard, the Add Accumulators to Parent Agreement controls which subagreements accumulate in the parent agreement.

No Release Order Contracts offer additional pricing term options that are not available in Release Order contracts.​

​In addition to materials and services pricing terms, No Release Order Contracts provide the ability to use additional pricing terms, including:

• Fixed and recurring fee items​
• Costs​
• Expenses

The Preload Amount field is used to indicate prior spend against existing contracts. This is useful for contracts that may already exist with spend, but that is just now being entered into the system.​

​Preload amounts are tracked only at the header level, and only affect spend accumulation and tiered pricing in supplier level contracts.

The Forecasted Spend section is used to track the total amount you anticipate to spend over the life of the contract. This allows organizations to anticipate, analyze, and optimize spend and performance.