76 Certification Study Guide Series: IBM Maximo Asset Management V7.1 5.1 Contract module applications To meet your company requirements, contracts are used to define a certain relationship between your company and all kinds of vendors, service providers or even internal departments. The Contracts module was designed to meet these requirements and therefore it has been divided into the following applications: Labor Contract A Labor Contract is a way to define the rates that will be paid for craft and skill combinations, as well as rates to be paid to specific laborers. You can set up a labor rate to create invoices for all approved labor transactions within a specified time period, for example every month. Labor Contracts are created in the Labor Rate Contracts application. The Labor Contracts can also cover the Labor records for external or contracted labor identified by the vendor Labor records. Refer to refer to IBM Maximo Asset Management Product Reference Guide at: http:// publib. boulder. ibm. com/ infocenter/ tivihelp/ v3r1/ topic/ com. ibm . mam. doc_ 7.1/ pdf/ mam71_ prod_ ref_ guide. pdf Lease/ Rental Contracts A Lease Contract is an agreement to lease one or more assets from a vendor. Lease Contracts specify lease period, payment schedules, and other conditions of the contract. IBM Maximo Asset Management can generate invoices based on the payment schedule intervals. This type of agreement might involve more than two parties, because one vendor might sell the assets and another might hold the lease. Lease Contracts are created in the Lease/ Rental Contracts application. A Rental Contract is similar to a Lease Contract. Rental Contracts specify the time period for the rental, payment schedules, and other conditions of the contract, such as in percentage of total amount due. Unlike a Lease, a Rental Contract can be terminated at will, and does not include a buy- out option in the terms of the contract. Rental Contracts are created in the Lease/ Rental Contracts application. Note: The Lease/ Rental Contracts application can also be used to define overall terms and conditions of an agreement between vendor and customer regarding one or more rotating assets.

Chapter 5. Contracts 77 Master Contract A Master Contract defines the relationship with a vendor and contains the terms and conditions that apply to the contracts created and listed under it. Master contracts are created in the Master Contracts application. The application is used to associate many contract types for a particular vendor. For example, a master contract might list rental contracts for tools or equipment, purchase contracts for materials, a labor rate contract, and a warranty on parts and labor. Purchase Contract A Purchase Contract specifies the terms and conditions for a purchase. Purchase Contracts are created in the Purchase Application and provide detailed Information about a contract’s contact information or shipping and financial terms. Furthermore, this type of contract can be used for creating price, blanket, or purchase types. Refer to Figure on page 84, and also to Chapter 6, “ Purchasing” on page 89 for more details). Warranty Contract A Warranty Contract is created in conjunction with the purchase of an asset and generally has no cost associated with it. This contract contains the details of what is covered by the warranty. If a Warranty Contract is purchased, it is considered an extended warranty by IBM Maximo Asset Management. Warranty Contracts are created in the Warranty Contracts application. You also use a Warranty Contract to create a Service Contract. A Service Contract indicates that an outside service provider maintains one or more assets. Payment for the service can be made with a single fee or schedule set of payments. Refer to refer to IBM Maximo Asset Management Product Reference Guide at: http:// publib. boulder. ibm. com/ infocenter/ tivihelp/ v3r1/ topic/ com. ibm . mam. doc_ 7.1/ pdf/ mam71_ prod_ ref_ guide. pdf Software Contract Note: The Purchase Contract allows you to specify the maximum amount per contractor or contract. Note: The Software Contract type is only available in IBM Tivoli Asset Management for IT, not in IBM Maximo Asset Management.