Master Agreements

A master agreement is a type of contract, set at the project level, between a general contractor and a supplier to purchase goods or services later. A master agreement lets you set up the terms, conditions and pricing of a contract. You do not commit the value of the agreement until you write an associated contract or purchase order against it. For example, a master agreement could be an agreement to purchase services across multiple years of a contract. Instead of purchasing all the services now, you can write contracts for the services against the agreement as needed over the duration of the project. All transactions of the contract purchase order associated to the master agreement for visibility.

A master agreement is not a standard contract purchase order. Because you receive and pay against all the contracts and purchase orders associated to it, it is not necessary to create a goods receipt or payment term against a master agreement. These are made against the individual associated contracts.

Configuration

You configure a new contract type to be specific for master agreements. A contract type that is configured to be a master agreement can only be used as a master agreement.

Settings in the Contract type setup configuration in the organization settings (Settings > Contract> Configurations > Contract type configuration setup) let you indicate whether a contract type is a master agreement and, if so, whether to publish to the ERP system. For contract types that are not master agreements, you can indicate whether to allow association to the master agreement.

To configure a contract type as a master agreement, set the Is this a Master agreement toggle to Yes, and then indicate whether to publish to the ERP system. After the master agreement has been used, you can no longer change these settings. The master agreement tab is only shown in the register home page if there is one contract type that has the Is this a master agreement setting set to Yes.

When defining the required fields for the master agreement, it is best practice to set the Enable, Require for purchase order, and Lock after purchase order settings to Yes. A vendor is required by the ERP system. If you publish to an ERP system, you must enable the Vendor field and require it for a purchase order or publishing will fail. Other field requirements must match those of your ERP system's requirements, so you can successfully sync the master agreement to the ERP system.

For contract types that are not master agreements, you can indicate whether the contract type can be associated to a master agreement. A contract must be associated to a master agreement to be able to write contracts of that type from the master agreement. Set the Allow association to Master Agreement toggle to Yes to allow associations. Set the toggle to No if you do not want to be able to write contracts against the agreement.

Create a master agreement

You can use Contract to create and manage master agreements. The following steps walk you through the process of creating a master agreement.

Step by Step — Create a master agreement

Master agreement tabs

Master agreements can have the following tabs, based on your master agreement contract configuration:

• Header

• Line items

• Schedule of values

• Vendor change order log

• Back charges

• Supporting documents

• Workflow assignments

• Sync log

• Contract closeout

• Associations

The Associations tab is unique to master agreements. The other tabs work the same as the Contracts tabs.

Contract totals icon

Click the Contract totals icon to display a slide-out panel that has a breakdown of the master agreement's totals.

The slide-out panel is similar to the Contract totals slide-out panel with the following exceptions:

• A section for change orders shows the total amount of change orders, total amount of potential change orders, and the accrued liquidated damages.

• The Received to date, Contract invoices, Submitted to date, Paid to date, Retained to date amounts, and percentages come from the contracts that have been associated to the master agreement and not from the master agreement itself.

See Contract creation for more information about the Contract totals slide-out panel.

Master agreement banner

The master agreement banner shows at the top of all pages in the master agreement to help you track the current value and associations.

The Current value is the amount of the master agreement. The remaining fields come from the contracts associated with the master agreement. For example, as you write associations to the master agreement, the Associations value increases.

The Remaining to buy field on the Associations and Vendor change order tabs is automatically calculated. The remaining to buy is the difference between the master agreement current value and the total associations current value.

Master agreement line items

The Line items tab lets you define the line items of the master agreement. These line items can be used when you add line items to an associated contract. You must have at least one line item to publish the master agreement.

The line items register is similar to the register for contract line items. The first line in the line item register of every master agreement is a default placeholder 0000 line item, where a net price can be manually entered. This line item is used to hold value that is not specifically applied to numbered line item. For example, if you add an associated contract or purchase order that already has a line item, the value of the associated line item will show in the 0000 line item progress viewset.

Contract line items can be reassigned to master agreement line items. All information, other than quantity, from the master agreement line are updated.

See Line items tab for information about line item details.

Publish a master agreement

After you have added one or more line items, you can publish the master agreement.

Step by Step — Publish a master agreement

After the master agreements has been published, you can still update it. To update, enter your changes, and then click Save. The Update master agreement button is enabled. Click the button to update the master agreement.

Associations

The Associations tab lists all contracts that are associated to the master agreement. After a contract is associated with the master agreement, any purchase orders created from the contract go against the master agreement.

The values in the banner do not include tax. You can see tax values in the Total tax column on the Associations register. The tax amount is the sum of the Tax amount field in all line items for associated contracts. To see a break-down of all taxes that make up the total tax, hover over the information icon in the Total tax column.

You can associate a new or existing contract to a master agreement from the Associations tab. Bid package vendor flow to Master agreement vendor upon association.

You can download a purchase order from the Associations tab.

Step by Step — Add a new contract to a master agreement

Step by Step — Add an existing contract to a master agreement

Close out master agreement

When you no longer want contracts to be written against the master agreement, you can close it out. You can either close out the entire master agreement, which closes all line items, or you can close individual line items.

Step by Step — Close out master agreement

Step by Step — Close out a master agreement line item