A Procurement contract is a business contract between two parties. Which must cover vital areas of the relationship between the parties. It will then be used as a governance that examines the performance of the supplier and the buyers on sections of the contract. Hence, the contract covers a list of KPIs that are aligned with the company's goals and objectives. It starts with an introduction to both companies, then it specifies the business relationship and what is being exchanged. It will then cover areas of the relationship, including and not limted to; quality, quantity, prices, promotions, transport, remunerations, returns, refunds, insurance, payment, termination conditions, disputes and settlement conditions, etc. Before the contract is awarded, there are sections that are more important than the contract and that is demand level, product life cycle and finance along with legal compliance and standards compliance. These areas are covered in the supplier score card assessment. This assessment is done after an RFT is populated and suppliers applied to it or responded with an offer. It can take.many stages until the contract is awarded and usually it is the buyer that populates the RFT. Many sections can be covered, however, the above mentioned sections are fundamental.
