me31k create outline agreement (aka contract)

ME31K Create Outline Agreement (aka Contract) of 12

ME31K Create Outline Agreement (aka Contract) Purpose

Use this procedure to create an Outline Agreement in SAP.

Trigger

Perform this procedure when you wish to create an outline agreement in SAP for agreement types such as a Price Agreement (PA), a Value Contract (VC), etc. Having an Outline Agreement allows bureaus the flexibility to create distributed purchase orders (DPO) when ready by simply referencing the approved agreement when creating a distributed purchase requisition (DPR).

Prerequisites

The vendor exists in Accounts Receivable (Vendor Master XK01)

You know the contract owner's cost center assignment

You have a contract/agreement (in various stages of completion)

Transaction Code ME31K

Helpful Hints

Here are the outline agreement types and the document numbering conventions: 30XXXXXX = VC (Value Contract) CPA (Community Partner Agreement) IGA (Intergovernmental Agreement) LSA (Lease Agreement (City pays)) 31XXXXXX = PA (Price Agreement) 32XXXXXX = GA (Grant Agreement) 33XXXXXX = NVC (Non-Value Contract)

R/O/C column in tables represents Required, Optional, or Conditional entry.

Use transaction code ME33K to attach scanned contract (signed by Vendor, if routed electronically for City Signatory) and pertinent documents.

If this is a citywide agreement, do not enter a Plant code.

If you have more than a few lines for this contract/agreement, complete the fields under the "Default Data for Items" section on the Create Contract: Initial Screen.

NOTE: The term “Outline Agreement” is used when referencing what is done in SAP. The term “Contract” is used when referencing the legal (paper) document.


Procedure 1. Enter transaction code ME31K in the Command Field (identified below) of the SAP Easy Access

screen and click the Enter button (the green check mark icon). The Create Contract: Initial Screen displays.

SAP Easy Access screen

Create Contract: Initial Screen


2. As required, complete/review the following fields: Field R/O/C Description Vendor

R Enter the Vendor ID number. Example: 1XXXXX (should start with one(1))

Agreement Type

R Select the classification that determines the agreement usage. Example: PA for Price Agreement

Agreement Date

R DO NOT CHANGE. This field defaults to today’s date. This is the date this outline agreement is created in SAP.

Agreement

NA LEAVE BLANK. SAP will generate an outline agreement number when you click the Save button.

Purchasing Organization

R Enter “COP1” as there is only one code for the City of Portland. A Purchasing Organization is an organizational unit that procures materials and services, negotiates conditions of purchase with vendors, and bears responsibility for such transactions. Example: COP1

Purchasing Group

R A buyer or group of buyers who are responsible for certain purchasing activities. Internally responsible for procuring a material or a class of materials. Example: P99 for a PTE contract

NOTE: For fields under the heading Default Data for Items, enter data here only if you have multiple lines in the contract where the information is repeated, such as a Price Agreement where you have various prices for various items to be purchased under this contract. Otherwise, leave these fields blank and enter your data when you get to the Item Overview screen. If you need these fields, these are the common three fields to complete. Field R/O/C Description Acct Assignment Cat O Enter an account assignment category, “U.” This code is

commonly used for outline agreements. An Account Assignment Category identifies specific settlement receiver types such as cost centers, internal orders, work orders, asset accounts, or project WBS elements. Example: U for unknown

Plant O Enter the 4 digit plant code. Example: PK00 for Parks

Material Group

O Enter the 5 digit code for what you’re buying under this contract. A Material Group is a collection of goods or services that share common characteristics. For example, Office Supplies would be used if your contract is for pens, papers, staplers, etc. Example: 61500 for general Office Supplies


3. Click the Enter button (the green check mark icon). The Create Contract: Header Data screen displays. Create Contract: Header Data

4. As required, complete/review the following Administrative Fields: Field R/O/C Description Validity Start

R Enter the contract start date - mmddyy. NOTE: SAP will default to today’s date for this field. This date can be changed, as needed. Example: 010110 for January 1, 2010

Validity End

R Enter the contract expiration date - mmddyy. Example: 123110 for December 31, 2010


As required, complete/review the following Terms of Delivery and Payment fields Field R/O/C Description Payt Terms (Payment Terms)

R Enter the payment term stated in the contract. The City’s default payment term is net 30 days. This means that invoices are paid about 30 days from the invoice date of an accurate invoice. Example: Z030 for Net 30 (no discounts)

Targ. Val. (Target Value)

R Enter the contract value. The total value of all materials or services to be released against the outline agreement (contract). The value in this field will change when compensation is increased or decreased with executed amendments/change orders. Example: 150000 for $150,000

Incoterms (International Commerce Terms)

C Depending on your contract language, you may need to specify the freight term in these fields. Example of first field: FOB for freight/free on board Example of second field: Destination to define the transfer of ownership

As required, complete/review the following Reference Data fields Field R/O/C Description Quotation Date O Vendor offer date

Your Reference R Enter the solicitation number in this field.

Also, could be used to enter an Old outline agreement (contract) number if this new outline agreement is created due to a reassignment or the vendor had to have a new City Vendor ID number for any number of reasons.

Our Reference C If City Ordinance exists for this contract, City Ordinance Number must be entered here.

Quotation C Vendor offer number, if any.

Salesperson O Vendor contact person’s name.

Telephone O Vendor contact person’s phone number.

Invoicing Party O The Vendor ID number to whom the City is sending payments.

As required, complete/review the following Information fields: Field R/O/C Description Description

R You must enter the exact title of the contract in this field, as this information appears on the City signature page of the contract. Example: Citywide Office Supplies Contract


Project Manager

R Enter name of the City Project Manager responsible for this contract. Example: Jane Buyer

Sole Source

R Enter “Y” if sole source or “N” if not.

On-Call(PTE)

C Enter “Y” if this is a PTE On-Call Contract, otherwise LEAVE BLANK.

Owner Cost Center

R Enter the cost center of the Project Manager (PM). NOTE: No charges or encumbrances will result from this. Example: MFPU000001 for a PM within Procurement Services

Bureau

O Leave this field blank. It will auto-populate according to whatever Owner Cost Center is entered.

Original Contract Amount

R Enter the original contract amount. The value in this field is the same as the value in the Target Value when this is a new contract. NOTE: The value in this field will never change. Example: 150000 for $150,000

Bureau Project No.

C Enter the bureau specific project number, if applicable.

Auto Renewal

R Enter “Y” only if there is a clause in the contract that states the contract automatically renews itself unless there is a written amendment to terminate the contract. Otherwise, enter “N”.

No. of Renewals

C Enter the number of renewals allowed, based on the renewal interval stated below.

Renewal Interval

C Enter the renewal interval per the No. of Renewals above.

Workers Comp. Insurance Expiration

C If required in contract, enter the expiration date – mmddyy.

General Liability Insurance Expiration


Auto Insurance Expiration


Professional Liability Insurance Expiration



City Signatory

R Select the appropriate City Signatory numeric code for your outline agreement.

NOTE: The City Attorney’s Office and the Auditor’s Office are not listed, as the routing to these two offices is automatic. Example: 08 for None. Use this City Signatory code when you have collected all needed signatures via hard copy. Be sure to release this outline agreement via ME35K as a Contract Administrator, so it can be electronically routed to the Auditor’s Office for recording.

5. Click the Enter button (the green check mark icon) on your keyboard. The Create Contract: Item Overview screen displays. Create Contract: Item Overview (shown using the default fields for the Account Assignment)


6. As required, complete/review the following fields: Field R/O/C Description I (Item Category)

R LEAVE BLANK. This field defines how the procurement of a material or service item is controlled. Blank equals Standard.

A (Account Assignment Category)

R Enter an account assignment category, “U.” This code is commonly used for outline agreements. An Account Assignment Category identifies specific settlement receiver types such as cost centers, internal orders, work orders, asset accounts, or project WBS elements. Example: U for unknown. All outline agreements should use this code.

Material

C If applicable, enter the uniquely identified material number assigned to the item for which you will purchase under this contract.

Short Text

R Enter the description of what to be purchased under this contract. Example: A&E services for the Directors Park

Targ. Qty (Target Quantity)

R LEAVE BLANK, as the value in the contract is derived from the Target Value in the Header Data screen.

OUn (Order Unit of Measure)

R Specifies the unit of measure in which the material is ordered. For Price Agreement, enter the unit of measure to be purchased. Example: EA for each or BX for box or USD for U.S. Dollar For Value Contract, enter only “USD” for U.S. Dollar.

Net Price

R Identifies the per unit price. For Price Agreement, enter the price per unit specified in the previous field. Example: Net Price Per EACH or BOX. For Value Contract, enter only “1”.

Per

R Indentifies the number of units of the Order Price Unit for which the Net Price is valid. Typically, enter “1” here. NOTE: For certain orders where a conversion factor is used, the data entered in this field will not be “1.” This is rare.

OPU (Order Price per Unit)

R Indicates the unit of measure for the order unit price. This data must match the data entered in the Order Unit of Measure field. For Price Agreement, enter the unit of measure used in the Order Unit of Measure field. Example: EA for each or BX for box For Value Contract, enter “USD” for U.S. Dollar only.


Mat. Grp (Material Group)

R Enter the five-digit code for what you’re buying under this contract. A Material Group is a collection of goods or services that share common characteristics. For example, Office Supplies would be used if your contract is for pens, papers, staplers, etc. Example: 61500 for general Office Supplies

Plnt (Plant)

R Enter your Plant (bureau or office organization unit number) if the contract is Plant specific. LEAVE BLANK if you intend to allow other bureaus to use this contract, such as a citywide contract. Example: PK00 for Parks

SLoc (Storage Location)

C Not Common. LEAVE BLANK unless you have a unique number to identify the specific storage location at which the material is stored. A plant may contain one or more storage locations.

D (Deletion Flag)

O This should be blank. If you wish to delete a particular line item, you will need to highlight the entire line, and then follow this menu path: Edit Delete (or click the trashcan icon). If you haven’t saved this outline agreement, that line item disappears. If you see a Delete (trashcan) icon, you are viewing this outline agreement in display or change mode.

Texts O This is normally blank. If you would like to add text to this line item, you will need to highlight the entire line, and then follow this menu path: Item Texts Text Overview (or click the paper and pencil icon). Once a text has been added, you will see a Display text icon in this field.

7. Click the Enter button (green check mark icon) to validate the data entered. Correct issues, if any.

8. In rare cases, you may have to set up a “partnering” function in your outline agreement. For

example, Watson Furniture is the named Contractor, but Harris Works Systems is the vendor from whom we place our orders and to whom we pay their invoices (referencing the Outline Agreement with Watson Furniture).

NOTE: Skip to STEP #14 if you don’t need to set up partnering. Create Contract: Item Overview


9. Click the Partner button (identified above as the two people icon). The Data Retention Levels Partner screen displays. Data Retention Levels Partner

10. Click the box to the far left of the first row (circled above) to highlight the line. Click the Display level button (the eyeglasses icon). The Maintain Partner screen displays. Maintain Partner (this screen displays the contractor as the ordering address and the vendor)


11. As required, complete/review the following fields: Field R/O/C Description F (Function)

R Enter the function code (two characters) for this partner. Example: PI for Invoicing Party (invoice goes to someone other than the named contractor)

Partner Function

R LEAVE BLANK as the system will self-complete based on the function code entered in the previous field.

Number

R Enter the vendor number for this partner. Example: 100340 for Garrett Marketing Solutions

Name

R LEAVE BLANK as the system will self-complete based on the function code entered in the previous field.

12. Click the Enter button (green check mark icon) to validate your entry. The Partner Function and Name field will populate (indicated by arrows below).


13. Click the Back button (green arrow icon) two times to go back to your contract overview screen.

14. Click the Save button (disk icon). 15. SAP system will return the message, “[Outline Agreement Type] created under the number

3XXXXXXX.” Write down this number for reference.

Result

You have created a type of outline agreement in SAP.

Next Steps

You may need to come back to this outline agreement and complete the skipped fields (e.g. insurance info) using the Transaction Code ME32K (Change Contract). When all fields are completed and attachments uploaded, you will need to use Transaction Code ME35K to release this outline agreement as a Contract Administrator (CA). Once the contract is fully executed, be sure to pull a copy of the contract, along with pertinent attachments, from TRIM and send it to the Contractor (be sure to keep copies for your procurement file and contract file).

me31k create outline agreement (aka contract)

Documents

approved agreement

agreement usage

citywide agreement

outline agreement types

outline agreement number

term outline agreement

price agreement pa

pa price agreement