Central Contracts

A central contract is a legally binding agreement between a purchaser and a supplier. It defines the purchase and supply of goods or services at agreed prices and conditions, such as quantities to be ordered and rebates. A strategic purchaser typically creates a central contract as soon as it becomes clear that the relationship with a supplier will become long-term. The quantity and value of purchase orders (POs), limit confirmations, and invoices are released against the central contract.

Integration

Business Scenarios

Central contracts are used in the following business scenarios:

Operational Contract Management
Strategic Sourcing with RFx

SAP NetWeaver Business Warehouse (SAP NetWeaver BW)

If you integrate SAP NetWeaver BW, you can use the following evaluations for central contracts:

Supplier evaluation

For more information, see Customizing for Integration with Other SAP Components under Data Transfer to the SAP Business Information Warehouse Settings for Application-Specific DataSources (SRM) Define Events for Supplier Evaluation in SRM .
Maverick evaluation

For more information, see Customizing for SAP Supplier Relationship Management (SAP SRM) under SRM Server Cross-Application Basic Settings Define Logical Systems and Template Names for BI Reports .

The system transfers only information about the responsible purchasing organization to SAP NetWeaver BW. The responsible purchasing organization is stored in the central contract together with the purchasing group. The system does not transfer information about the release-authorized purchasing organization.

You can use SAP NetWeaver BW alerts to start workflows, for example, to start a workflow when 90% of the target value or quantity is reached.

Prerequisites

Your system administrator has made all necessary basic settings for contract management, and all necessary settings for the above business scenarios. For more information, see SAP Solution Manager.

To preview contracts, you have installed an application on your PC that can display PDF files.

Features

Structure

A central contract contains a tab strip with different tab pages, such as the Overview, Header, or Distribution tab pages. Some of these tab pages are subdivided into sections. The Overview tab page, for instance, has General Header Data and Items, while the Header tab page includes a Basic and a Partner section.

As an example, the following table explains some of the fields that appear on the Overview tab page.

Overview Tab Page

Field	Description
Target Quantity Target Value Release Value	The target quantity and target value are the quantity or value that you expect to purchase from a supplier within the time period that is specified in the central contract. The release value is the accumulated value of all POs against this central contract.
Basic Contract	If you choose Yes, the contract contains only header data and conditions, but no line items. Basic contracts cannot be distributed to a catalog.
Item Category	You have the following options: Normal A normal item must contain a product category. Product category A product category item refers to a complete product category. For product category items, you must define a target value. You cannot restrict a product category item to a single catalog. The item always refers to all connected catalogs.
Product Category	Note that you cannot change the product category of product category items, or if a contract release order exists.

Tracking

For more information, see Central Contract Management Features .

Statuses

The following table describes the possible statuses of a central contract:

Central Contract Statuses
Status	Description
Awaiting Approval	Depending on how your system is configured, an approval workflow may be started when you choose Release. In this case, the system sets the status Awaiting Approval. For more information, see Process-Controlled Workflows.
Can Be Archived	The system sets this status if a central contract was deleted and if all archiving parameters are fulfilled. The system checks that no follow-on processes exist and that the residence time is met. By maintaining the Residence Time, you can define the period after which a central contract can be archived. A contract that has been archived can be displayed, but it can no longer be changed. Central contracts are archived and deleted using the archiving object `BBP_CTR`. You can use the transaction `Archiving Objects (AOBJ)` to display all archiving objects in SAP SRM and their associated tables. You manage document archiving with the transaction `Document Archiving (SARA)`. For more information, see Customizing for SAP SRM under SRM Server Cross-Application Basic Settings Document Archiving .
Completed	The system sets this status when you choose Close Contract for a central contract in status Expired or in status Released. This status is irreversible. You can search for contracts in status Completed and use them as templates. A central contract in status Completed can be archived if all archiving parameters are fulfilled. The system checks that no follow-on processes exist and that the residence time is met. By maintaining the Residence Time, you can define the period after which a central contract can be archived. A contract that has been archived can be displayed, but it can no longer be changed.
Deleted	You can set this status only if the contract has not yet been released. A central contract in status Deleted can be archived.
Distribution Incorrect	The system sets this status if the distribution of a central contract to the back-end systems failed.
Expired	The system sets this status if the validity period has expired, or if the target value in the header is exceeded. If you want to automatically enable the owner of the contract to receive an inbox message when the contract expires, ask your system administrator to schedule the report Check Central Contract Data (`BBP_CONTRACT_CHECK`). Alternatively, you can specify the default alert thresholds for contract expiry dates. For more information, see Customizing for SAP SRM under SRM Server Cross-Application Basic Settings Enter Alert Threshold Data for Contracts . By choosing Renew, you can create an RFx for an expired contract to improve conditions with existing suppliers or to determine new suppliers. Using the SAP Bidding Engine, you can then either create a new contract or update an existing one.
In Distribution	The system sets this status if a central contract is in the process of being distributed to the back-end systems.
In Negotiation	The system sets this status when you choose Renew for a central contract in status Saved.
In Process	The system sets this status when a central contract has just been created and is in the process of being edited.
In Renewal	The system sets this status when you choose Renew for a central contract in status Released.
Locked	The system sets this status when you choose Lock to make a central contract temporarily unavailable as a source of supply. To unlock a locked central contract, choose Unlock.
Release Rejected	The system sets this status if the central contract was not approved for release.
Released	The system sets this status after you choose Release and after the central contract has been approved. The central contract can now be used for sourcing by the following: Strategic purchasers to find sources of supply to meet POs Employees when ordering from a company catalog For more information, see Uploading of Central Contracts to a Catalog.
Saved	The system sets this status when you save the central contract. The contract is not available for sourcing until you release it and it is approved.

Activities

Creating Central Contracts

For more information, see Creating Central Contracts.

Changing Central Contracts

If you change a released central contract, the central contract may need to be approved again, depending on the type of changes you make, for example, if the target values exceed a certain limit. For more information, see Process-Controlled Workflows.

For information about making similar changes to more than one central contract, see Mass Changes in Central Contracts.

More Information

Central Contract Management

Upload and Download of Purchasing Documents

Changing Suppliers in Central Contracts

Versions of Purchasing Documents