Selection of a vendor may be made once the evaluation has been performed. At this point, a vendor contract will be required. This business contract establishes the vendor relationship. The negotiation and creation of a contract often require the assistance of an attorney.
Note: Many different types of vendor contracts are in use. Contracts (or leases) may involve blanket agreements, term contracts, or requirement contracts, while leases may be of a lease-purchase nature. Fixed price, cost reimbursable, time and materials, letter subcontracts, distribution agreement, indefinite delivery, or undefined quantity contracts are examples. It is beyond the scope of this course to discuss the further details of contract types.
Sample items to be included in a vendor contract include:
- Scope
- Timing of payment and delivery
- Price and payment method
- A clause outlining the time frame for the relationship
- Consequences of not fulfilling duties and obligations
