An outline agreement are of two types −

• Contract
  • A contract is a long-term outline agreement between a vendor and an ordering party over a predefined material or service over a certain framework of time. There are two types of contracts −
    • Quantity Contract − In this type of contract, the overall value is specified in terms of the total quantity of material to be supplied by the vendor.
    • Value Contract − In this type of contract, the overall value is specified in terms of the total amount to be paid for that material to the vendor.

• Scheduling Agreement
  • A scheduling agreement is a long-term outline agreement between the vendor and the ordering party over a predefined material or service, which are procured on predetermined dates over a framework of time.
  • A scheduling agreement can be created in the following two ways −
    • Creating scheduling agreement
    • Maintain scheduling lines for the agreement

Centrally Agreed contract

The centrally agreed contract allows a central purchasing organization to create a contract with a vendor that is not specific for just one plant. In this way, the purchasing organization can negotiate with a vendor by leveraging the whole company’s requirements for certain materials or services.

• Contract items can relate all plants covered by a purchasing organization
• All plants of a purchasing organization can order against a centrally agreed contract
• Using the plant conditions function, the centrally agreed contract allows you to stipulate separate prices and conditions for each receiving plant. For example, different transport costs.

Structure of an Outline Agreement

As in the case of other purchasing documents, an outline agreement consists of the following elements:

• Document header: containing information relating to the entire agreement. For example, the vendor information and header conditions are in the document header.

• Items: containing the information specific to the relevant material or service.
  • Statistics on ordering activities for the item
  • Quantity or price of the item
  • Conditions, such as quantity discounts and surcharges

Agreement type

• Contracts

Value contract	WK
Quantity contract	MK

Different ways in which a contracts can be created

1. manually (ME31K )
2. Reference to RFQ
3. Reference to PR
4. Existing contracts

Confriguation

• Define number ranges

T-code	OMY6
Path	SPRO > IMG > Materials management > purchasing > contracts > Define number ranges

• Define document type

T-code	OMEF
Path	SPRO > IMG > Materials management > purchasing > contracts > Define document type

• Define Screen Layout at Document Level

T-code	OMEF
Path	SPRO > IMG > Materials management > purchasing > contracts > Define Screen Layout at Document Level

Path to Create Contract

• Go to the below mentioned t-code or path and enter

T-code	ME31K
Path	Logistics > Materials Management > Purchasing >Outline Agreement > Contract > Create

• Provide the vendor, agreement type , agreement date, purchasing organization, purchasing group and plant .

Note – Contract can also be created with reference to purchase requisition or with a RFQ

• Maintain the header data by entering the required fields such as validity start and end date, target value , payments terms , incoterms and click save .

• Create a purchase order with reference to the value contract created and it can be done y adopting it from the document overview tab

• Go to ME33K ,enter the agreement number ,select the line item ang go to release documentation. It will give us information about the contract ( quantities released , quantities left etc.) .

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Note – Similarly we can create a quantity contract , just while creating the contract maintain agreement as “MK” rest all remains same

T-CODES for contracts

ME31K	Create contract
ME32K	Change contract
ME33K	Display contract
ME35K	Release contract
ME35L	Contracts by vendor
ME35M	Contracts by material
ME35C	Contracts by material group
ME9K	Print
ME80RN	Monitor contracts

Item categories in contracts

• M – The material is unknown
  • This is used where the material number is unknown at time of contract creation.
  • This item category would be used, for example, when the contract is for similar materials that have the same price but different material numbers.
  • The exact kind of material number is maintained in contract release order (PO).
  • Material short text and Material group maintained in contract
• W – Item Category W (Material Group)
  • This is used for to specify a target value for all materials in a group.
  • It can be used for value contracts only.
  • The exact kind of material number and price are maintained in contract release order (PO).
  • Material short text and Material group maintained in contract.
• D – Procuring an external service
  • Item category W is recommended for material belonging to the same material group but with different prices. For example, contract for office supplies.
• K – Consignment material is involved
• L – Subcontracting material is involved