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Creating a New Pricing Agreement for a Contract

Two types of contracts exist with respect to pricing agreements. The first, and more common, is a contract where both the contract and the pricing agreement have the same effective period. In effect, the contract has one pricing agreement. The pricing agreement (i.e. prices) is in effect for the length of the contract.
With the second type of contract, multiple pricing agreements exist over the life of the contract. For example, you may have a 5-year contract with a supplier. While the general contract runs for the full 5 years, the prices are renewed every year.
Renewing a contract’s pricing agreement is different than renewing the contract. When a contract is renewed, an RFQ is created to manage the bid process. Multiple suppliers are asked to bid on the new contract.
Renewing a contract’s pricing agreement does not involve an RFQ. No other suppliers are asked to bid. Only the contract supplier’s new pricing information is entered. When you renew a pricing agreement you can:
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Update all of the contract’s prices by a set percentage. For example, all prices have increased by 1% or decreased by 2%
•
Change the discount rate for the contract
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Enter the supplier’s new lead time for the resources
If necessary, you can edit individual new prices after they have been created.
This topic explains how to renew a pricing agreement on an existing contract.

To Create a New Pricing Agreement for a Contract

1.
Open the contract that needs the new pricing agreement.
2.
Make sure that editing is enabled.
3.
From the Tools menu select New and then Pricing Agreement. The Renew Pricing Agreement dialog appears.
The current pricing and contract information is displayed in the top part of the dialog. You can make changes in the rest of the dialog.
4.
On the New Pricing Agreement tab, make any of the following changes to create the new pricing agreement:
Setting Name
Description
Pricing agreement starts
Enter the new starting date for the pricing agreement’s effective period.
Pricing agreement ends
Enter the new ending date for the pricing agreement’s effective period.
Prices are
If all of the prices will be changing by the same amount, select whether the prices will be Increasing or Decreasing. If the prices are staying the same, select Not changing. If the prices are changing, enter the percentage increase or decrease in the By box.
Percentage
If prices are increasing or decreasing in the new pricing agreement, enter the percentage change in this box. For example, if the prices are decreasing by 10 percent, enter the number 10 in the box.
Supplier’s reference has changed
Select this option if the new pricing agreement has a different supplier reference number. You can enter the new number in the New supplier reference box.
New supplier reference
If the supplier’s reference number has changed, enter the new number in this box.
5.
On the Details tab, complete the following information:
Setting Name
Description
Discount rate
If the supplier’s discount rate has changed, select the Has changed option and enter the new rate.
Lead time
If the supplier’s lead time has changed, select the Has changed option, and enter the new lead time.
Extra charges
If the contract’s existing supplier resources have different extra charges than those listed on the contract, you can re-set the new prices to use the extra charges listed on the contract:
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To re-set the extra charges for the new prices, select the option Use the contract’s current extra charges.
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To keep the same extra charges as are currently listed on the supplier resources, select the option Copy the extra charges from the existing supplier resource.
6.
To review the new resource prices, click the Continue button. The new prices are created and shown in the New prices list.
7.
If you need to make a change on the dialog, click Restart. The prices are removed and all of your changes are reset.
8.
When you are finished editing and reviewing the prices, click Process. The system adds the new prices to the contract, and closes the dialog.
9.
If necessary, you can now edit individual prices on the Resources tab.