The Terms and Conditions application will be found in both the Purchasing and Contracts modules. It is used to create a library of terms that are used in purchasing documents; Purchase Requisitions, Purchase Orders, Requests for Quotations, Contracts and Invoices. Terms and Conditions are also used if you have Maximo for Service Providers installed, in the Customer Agreements (SP), Work Order Tracking (SP) and Sales Orders (SP) applications.

Terms and Conditions application

The library of terms and conditions are entered at the Organization level in Maximo. In some companies the term identifier might be a numeric. The text of the term is held in the long description. When making a change to the description or long description it is not propagated to other application records that reference it.

The intended use of the Type field was to indicate the type of document where this term will be used, Contract or Purchasing, but there is no ALN domain and during implementation one would normally be created. The Type field will appear as a column in the lookups used for selecting terms in the various applications.

There are two check boxes:

• Editable – when checked, allows the long description of the term to be edited in the contract or purchasing record. It defaults to unchecked on new term records which means that the term will be read-only in the other applications.
• Default on PO – when checked, will add the term to all new purchase orders*. Maximo does not default these terms on new PRs or RFQs. This attribute defaults to unchecked on new term records.

* The terms are added to release type (REL) purchase orders created from a purchase contract of type BLANKET but they are read-only and cannot be modified. Releases always get a copy of the terms that are on its associated blanket contract.

A term can be deleted at any time without validation on whether it exists elsewhere on a contract or purchasing document.

When you associate a term to a purchasing document it will be carried throughout the life of the purchase, from PR to RFQ to PO to Invoice. Terms are also copied when you use the actions to Create Contract from a Purchase Requisition or a Purchase Order. 

There is a sequence field on a Purchase Requisition, Purchase Order and Contract for placing the terms in a logical order which you would normally need to verify before including them in a print-out that goes to a vendor.

On a Purchase Requisition and Purchase Order there is a check box to indicate whether the term should be copied to the vendor, this determines whether it appears on the last page of a PRPRINT or POPRINT in those applications. A similar field will be found on the Contract applications. 

While there is a sequence field which may be used for ordering, it is not the numbering you would expect to see in a contract. When new terms are created on contract or purchasing documents the sequence is 10,20,30, etc. During implementation it might be an idea to add the number associated with the contract term at the front of the description field and to think how this term will be presented on the printed form of a purchase order. For example,

In the applications that use the terms, for example PR, PO, when you create a new term you do not have to select a term from the library, you can enter the long description text, as a free-form term.

If you are going to have many terms and conditions you might want to consider adding a Category field or using the Type field for this. In the Service Provider applications there is already a Category field supported with a synonym domain (PLUSPTERMCATEGORY).

Some of the above points I will demonstrate in the following pages using a Purchasing Contract of type BLANKET as an example. But first there is another place where you set-up terms and conditions, in the OrganizationsA structural element of a Maximo database which is used for data sharing and is often aligned to a legal entity of an organisation. More application.

Organizations – Contract Options

In the Organizations application the Contract Options dialog will be found in the Purchasing Options submenu under More Actions. The purpose of this dialog is to allow clients to create their own contract types based on one of the internal contract types. For each contract type you can associate a set of terms and conditions using the Associate Terms button, or you can control the behaviour of the contract by modifying one or more of its properties using the Associate Properties button.

Currently we are only focused on the terms and conditions.

When you use the Associate Terms button a further dialog opens for the active contract type which is referenced at the top of the dialog. This is where you associate the terms that will be copied to new contract records that are based on that contract type. 

The Select Terms button will show you the same set of terms that will be found in the Terms and Conditions application, it is a multi-select dialog allowing you to select multiple terms in one action, it will not create duplicate terms, even if you select one that has already been entered. If you use the New Row button you can enter a free-form term without selecting an existing term, by just entering a description and long description. As part of the implementation you might want to consider making the TERMID attribute on CONTRACTTYPETERM object a mandatory attribute.

The ability to edit the term is copied from the Editable field in the Terms and Conditions application and the setting that you have for the contract type is then copied to the contract records that reference that contract type.

Purchase Contracts – Terms and Conditions tab

In the Purchase Contracts application, I have created a new contract of type BLANKET for company DELL and saved the record. As you can see from the picture the terms which were defined for the Contract Type have been copied to the new purchase contract including the free-form test record I entered (no TERMID attribute). You won’t be able to determine this from the screen shot but the only two terms that are modifiable are the top two and not the terms for INDEMNITY, PRICETAXES, AND WARRANTIES which have a read-only description and long description. This is down to the Can Edit field on the associated Contract Type.

The Send to Vendor check box always seems to be set, and I do not know where it is set from.

You can add new terms to the Purchase Contract, and you can also delete rows including those that have been copied from the contract type.

A few other points to note with regard to the terms and conditions on a Purchase Contract:

• They are copied during the duplicate action.
• The terms and conditions from the contract will be copied to the vendor terms on the Request for Quotation application (RFQ) if the vendor has been referenced as a vendor on that RFQ, otherwise the terms are copied to the RFQ terms.
• The terms are copied down onto the purchase request or purchase order as we shall soon see.
• When using the PR or PO action “Create Contract” the terms will be copied to the purchase contract.
• They cannot be modified when the contract is at an Approved, Revised, Closed, Suspended or Cancelled state.

Continuing from our test I’ve set the start date of purchase contract, 1051, to the beginning of the month, added a contract line for a quantity of 10 Dell Laptops, removed the test term, reordered the remaining terms and added two new terms one for INSPECTION with Send to Vendor unchecked, and another for INVOICING. 

You have to use the action Authorize Sites before you can approve the purchase contract with the action Change Status. I’ve now performed both actions with the contract valid for the BEDFORD site. 

The Create Release PO action is used to create a release from the blanket contract. In this dialog, it is easiest to use auto-numbered POs. I have selected the contract line on which I wish to copy to the release, the only contract line in this case.

The View Release Costs action is useful for Blanket contracts. Purchase Order 1099 was created, we’ll navigate there and go to the Terms and Conditions tab to see the result.

I am guessing that 10 terms was a little more than you expected. The Purchase Contract has six terms. Five terms, CANCELLATIONS, CHANGES, COMPLIANCEWLAWS, PRICETAXES and WAIVER have come from the Terms and Conditions application, they are the records where “Default on PO” was set. But 6+5 = 11 and 10 records are shown. That is because PRICETAXES is both a Terms and Conditions record where “Default on PO” is set, and it is a term that was added to the Purchase Contract 1051. During the merge of terms we don’t get duplicates, the one that wins is the one that came from the Terms and Conditions library and not the one from the Purchase Contract’s terms.

Incidentally:

• On testing this last point, if you have a term where Can Edit is set and you change the description of the term on the Purchase Contract then the TERMID field is made null, it becomes a free-form term. 
• If you change the long description it retains the TERMID value, hence how I could tell that the purchase contract term was not the one that was copied.
• When you revise a Purchase Contract and there is an open purchase order (the Release PO) then you will get the message “BMXAA6146W – This contract revision is currently referenced on one or more open purchasing documents. Documents PO 1099 currently reference this contract revision. Do you want to proceed?”
• During implementation you will need to consider how you will handle the sequencing of the terms, particularly if you have designed this to merge records from two places.