A Contract Cost record is very similar to a Special Cost record. A Contract Cost is created and maintained in the Special file just like a Special Cost, and it is also assigned a unique price record number by the system when it is saved.
The major difference between a special and a contract cost has to do with how it is selected during processing. A contract cost is selected by entering the appropriate contract number into the purchase order line during PO entry. When a contract number is specified in the PO line, the system calculates the default cost for the line using ONLY the special price records for the vendor, currency, and item being processed on the PO, AND the contract number specified in the PO line. If an active special cost record with the specified contract does not exist (or is not valid due to the status or dates in the record), the system will not return a valid cost, and the cost for the PO needs to be specified manually.
A contract price is a special price that has been set up for a particular contract #/item # /vendor combination in the Special Pricing System. A contract price record stores the item number that the price applies to, the valid dates for the special price, the quantity that must be ordered in order to qualify for the special price and a status and type field. Each contract price also stores a contract number. The contract number must be entered into a purchase order or requisition line in order for the system to apply the special price to the line. Contract numbers can be entered into purchase orders or requisitions manually in the PO Entry program. If the purchasing system is creating requisition lines automatically from sales orders (such as when special order or vendor shipments are processed in Sales Order Entry), the system will move the contract numbers from the sales order into the requisition lines as they are created. The line must also qualify based on the other information stored in the special pricing record. If the purchase order or requisition line qualifies for the contract price, the price is moved back into the record and the price source field of the purchase order or requisition is changed to CVP to indicate that the price was obtained from the special pricing system.
Note: Contract prices are not used when requisitions for stocking items are created using the PO Recommendations report. The PO Recommendations report creates requisitions for each item based on the total quantity needed to fill open orders and meet minimum stocking requirements. The PO Recommendations report creates requisition based on the current status of each inventory item and the information from the individual orders for the items being processed is not used