Important Note: While ETAs are essential, it is strongly recommended that you regularly screen the market as new and better quality products emerge and/or new suppliers likely have better prices, terms and conditions that would cause the organization to renegotiate agreements signed with existing suppliers and/or sign them with new suppliers following the issuance of appropriate tenders/requests for proposals. It depends on the item purchased. A long-term agreement is appropriate because it offers you a confirmed order quantity, less fluctuations in price, time and effort of the team. 5. Both parties feel safe as long as they have common interests under an agreement. It eliminates the feeling of insecurity among new buyers every time. 2. We receive the maximum discounted price when concluding a long-term agreement. 3.
Both parties feel safe for a longer guaranteed period of time. Scroll down to select and select the default text of these framework agreements for goods or services. 4. LTA should be carefully checked before being signed 1- Receive a guarantee for ordered quantities agreed supply chain. 2- Ensures a continuous flow without interruption for the products required either as raw materials or as finished products for direct and/or indirect materials and services 8. It allows both parties to search for areas of consolidation for existing products and services, as well as potential new product and service offerings. 5. EtA reduces many other burdens for buyers, such as logistics processes and administrative exercises.
7. The buyer saves time to focus on improving the supplier`s performance and thus increasing efficiency. The petitioner was registered by letter from the CTU dated 23.12.2011 to sign the MAL agreement within 30 days of the letter being issued. – Save costs: Thanks to a long-term agreement with suppliers, you have special rates that can lead to a significant saving in the supply budget – Secure the delivery time: Thanks to LTA, this helps to control and ensure the delivery time of the service, which is usually not possible if you have not assigned suppliers and have not pre-qualified them. The advantages of “Long Term Agreement (LTA)” are: 1. LTA mainly serves to keep a trustworthy supplier under our control, which is one of the most important suppliers for us. The mere fact that the CTU has granted extensions from time to time cannot be claimed as a confiscation against the cancellation of LTAs and the redemption of bank guarantees, since the connectivity rules and the detailed procedure do not allow an extension of the deadline for the signature of the ETA agreement and the necessary consequence in case of non-compliance with the provisions of the Regulation and the procedure. 2. This helps the company secure the hardware for us.
3- Credibility of the customer in terms of availability of this item in a sustainable way. – Pre-qualification: LTA allows you to qualify your suppliers and evaluate their performance · It eliminates annual duplicate procurement inspections and procurement management expenses. 1- Just-in-time purchase to reduce inventory transportation costs The partnership with the United Parcel Services Foundation (UPS) has helped UNICEF provide millions of children with life-saving supplies. 1. Of course, this will help in long-term budget planning 2- Avoid fluctuations in price changes and ensure accordingly the achievement of the agreed margin for this item. In the event that such lines have only been built under LTA and CTU does not operationalize the ETA (partially or entirely in accordance with applicable regulations), the LTA Agreement provides for a reasonable remedy that can be used to resolve the dispute. · With regard to scarcity, the seller ensures a reliable supply to the purchasing organization · The purchasing organization is also protected from arbitrary and unjustified price increases 2- Improving credit conditions for a longer period of time for products with minimal fluctuating prices or for LTA critical items helps the SCM to secure materials in a timely manner. However, it does not apply to all types of purchases.
So it depends on the best judgment of the person responsible, whether they choose LTA or not. 9. It also saves the buyer the costs of storing and handling the material. – Ensure the quality of the service: LTA helps you to define clear terms and conditions and KPIs in your SLAs and allows the company to control and ensure the quality of the services provided by the provider. 6. Provides opportunities to build better relationships through increased interaction over a longer period of time, which also builds trust and good faith, which helps form other future strategic partnerships. Long-term agreements are needed to operate smoothly; Suppliers can have more competitive prices, good inventory, terms and conditions. 2.
It eliminates unpleasant surprises from the increase in purchase prices. Prices are fixed in advance if the supplier runs the risk of increasing its cost price. A long-term agreement helps to freeze the best costs with the supplier and the supplier`s insurance/commitment for the duration of the agreed contract.. .
