TUGAS 3

SISTEM PENGADAAN
Disusun oleh Kelompok 1
ANGGOTA TIM
Abdillah Najhan A - 102032300030
Kayla Hayfa Maharani - 102032330045
Juan Ananta Refayoga - 102032300096
Salma Syakira - 102032300057
Alyssa Fanny Adriani - 102032300004
Rafa Dzaky Hartanto - 102032330099
 1. WHERE DO YOU BELIEVE BUYERS SPEND MOST OF THEIR TIME IN NEGOTIATIONS: ON
THE UPFRONT CLAUSES OR ON THE ATTACHED SCHEDULES?

Buyers spend more time negotiating attached schedules than upfront clauses. This is because
the schedule contains more complex technical, operational, and financial aspects that have a
direct impact on the implementation of the contract. The schedule includes details such as:
Product/service specifications
Price and price adjustments
Delivery schedule
Payment terms
Performance assessment
Schedule is a critical component because the agreements reached in this section determine
long-term business outcomes. While upfront clauses are legally important, many companies
have standard templates or boilerplates, while schedules need to be customized to suit project
needs and supplier relationships.
 2. WHAT ARE SOME EXAMPLES OF PRICE INDICES THAT MIGHT BE USED
TO TRACK COMMODITY PRICES SUCH AS STEEL OR COPPER, AND HOW
SHOULD THEY BE INCLUDED IN THE SCHEDULE TO MINIMIZE RISK TO
BOTH PARTIES?
Examples of price indexes for tracking commodity prices include:
Producer Price Index (PPI) dari U.S. Bureau of Labor Statistics
London Metal Exchange (LME) Index untuk logam seperti baja, tembaga, dan
aluminium
CRB Index (Commodity Research Bureau)
Platts untuk energi dan bahan bakar
This price index can be incorporated into the contract schedule through an
automatic price adjustment mechanism, for example by stating:
If the LME steel price changes by more than ±5% from the base price on the
contract date, the contract price will be adjusted proportionately.
This will reduce the risk of extreme price fluctuations for both buyers (who are
concerned about price increases) and suppliers (who are concerned about losses
due to costs rising beyond the fixed contract price).
 3. WHAT ARE THE RISKS TO BUYERS ASSOCIATED WITH EACH OF THE
DIFFERENT TYPES OF CONTRACTS (FIXED-PRICE, INCENTIVE, AND COST-
BASED CONTRACTS)?

Fixed-Price Contracts:
The main risk for buyers is paying too high a price if the actual cost of production falls. In
addition, suppliers may use cheaper materials or processes to save money, which can reduce
quality.
Incentive Contracts:
The risk lies in improperly designed incentives, which can encourage undesirable behavior
from suppliers. For example, if incentives focus only on speed, quality can be sacrificed.
Cost-Based Contracts:
The greatest risk for buyers is that they bear almost all costs, including supplier overhead or
inefficiencies. The lack of price caps can lead to cost overruns without tight controls.
 4. WHAT ARE THE RISKS TO SUPPLIERS ASSOCIATED WITH EACH
OF THE DIFFERENT TYPES OF CONTRACTS (FIXED-PRICE,
INCENTIVE, AND COST-BASED CONTRACTS)?
Fixed-Price Contracts:
The supplier bears the entire risk of changes in costs. If raw material or labor costs
rise, their profit margin will decrease and they could even suffer losses.
Incentive Contracts:
Supplier risk stems from overly ambitious or unrealistic incentives. If they fail to meet
their targets, they may lose part of their payments or incur penalties.
Cost-Based Contracts:
Low risk because almost all costs are borne by the buyer. However, reputational risks
remain if the buyer perceives the supplier to be inefficient or transparent. Also, there is
a potential conflict in cost verification.
 5. WHICH TYPES OF FIRMS ARE MOST SUITED TO USING TURNKEY
SYSTEMS CONTRACTS FOR THEIR INFORMATION SYSTEM
DEVELOPMENT?
Companies that are best suited to using turnkey system contracts for information
system development are:
Companies that do not have the internal technical expertise to manage large
IT projects (e.g. ERP).
Companies that want an “end-to-end” solution from a single vendor (single
point of responsibility).
Companies that are more focused on the end result than the internal process
of system development.

Turnkey contracts are suitable for manufacturing, logistics, healthcare or public

sector companies that need to implement complex systems (e.g. SAP, Oracle)
without wanting to be involved in every step of the process. The risk is higher on
the vendor, but the buyer must clearly define the needs and outputs so that the
delivered system meets expectations.
6. SUPPOSE YOU ARE A PURCHASE MANAGER WHO IS THE CONTRACT ADMINISTRATOR FOR A
MAJOR CONSULTING FIRM INSTALLING A MAJOR ENTERPRISE RESOURCE PLANNING SYSTEM
SUCH AS SAP OR ORACLE. WHAT ARE SOME OF THE KEY ELEMENTS THAT YOU WOULD WISH TO
INCLUDE IN THE CONTRACT WITH THE CONSULTING COMPANY IMPLEMENTING THIS SYSTEM?
As a purchasing manager who is the contract administrator for an ERP implementation
project, key elements that should be included in the contract include:
A very clear and measurable scope of work, including deliverables and milestones.
System specifications, integration with existing systems, and technical constraints.
Detailed project plan, including schedule, implementation stages, and completion timeline.
Change management clause.
Progress reporting and quality control mechanisms.
Acceptance criteria and testing & commissioning stages.
Warranty and post-implementation system maintenance.
Data ownership and intellectual property provisions.
Payment provisions based on milestones or work results.
Risks and penalties for system delays or failures.
End-user training support and technical documentation.
Dispute resolution and legal jurisdiction clauses
 7. WHY DO CONSULTANTS TYPICALLY WANT TO AVOID INCLUDING DETAILED OUTCOMES IN
THEIR CONTRACTS? IS THIS ETHICAL?

Consultants tend to avoid including very detailed outcomes in contracts because:

Outcomes can be affected by factors outside their control, such as client commitments,
infrastructure readiness, or organizational conditions.
Reducing the risk of legal liability if results are not achieved as expected.
Wanting to maintain flexibility in approach and working methods.

Ethically, this practice is debatable. If the consultant is not transparent or tries to avoid
accountability, then it can be considered unethical. However, if it is explained honestly from
the start and mutually agreed upon, then this practice is acceptable, especially on complex
or multi-variable projects.
8. UNDER WHAT CONDITIONS ARE SHORT-TERM CONTRACTS PREFERABLE TO LONG-TERM
CONTRACTS?

Short-term contracts are preferred under the following conditions:

High uncertainty in market prices or product demand.
New suppliers are in the performance testing phase.
The product or technology being purchased is still in development or has a short life
cycle.
Buyers want the flexibility to switch to another supplier if performance is not
satisfactory.
Buyers do not want to be tied into long-term contracts until market conditions are more
stable.
9. CERTAIN INDUSTRIES, SUCH AS THE COMPUTER INDUSTRY, ARE FACED WITH CONSTANTLY
CHANGING TECHNOLOGIES, SHORT PRODUCT LIFE CYCLES, MANY SMALL-COMPONENT
SUPPLIERS, AND DEMANDING CUSTOMERS. UNDER THESE CONDITIONS, WHAT TYPE OF
CONTRACT WOULD YOU RECOMMEND FOR A CRITICAL COMPONENT SUPPLIER? WHAT OTHER
MEASURES WOULD YOU INCLUDE IN THIS CONTRACT?
Recommended contract types:
Cost-based contract or incentive-based contract. Because technology changes rapidly
and costs are difficult to predict, cost-based contracts provide flexibility.
A short-term contract with an automatic renewal option if the supplier performs well can
also be considered.
Additional steps:
Intellectual property protection clauses.
Flexible delivery schedules but strict on quality and reliability.
Periodic performance assessments.
Penalty and incentive mechanisms for performance.
 10. WHAT ARE THE IMPLICATIONS FOR CONTRACT WRITING AS A RESULT OF ELECTRONIC
SIGNATURES NOW BEING ENFORCEABLE BY LAW?

The consequences of implementing electronic signatures include:

Contracts can be created and approved more quickly, especially in the global sourcing
process.
There must be a system for validating the authenticity of the signature (e.g. digital
certificate or multi-factor authentication).
Data security and encryption are very important.
Electronic contracts must have the same legal structure and clauses as printed contracts.
It is important to agree on the governing legal jurisdiction in the event of a dispute.
 11. WHAT ARE THE DANGERS ASSOCIATED WITH TAKING AN OLD CONTRACT AND MERELY
CHANGING THE NAME OF THE SUPPLIER FOR USE IN A NEW, THREE-YEAR CONTRACT WITH A
DIFFERENT SUPPLIER?

The dangers of this practice include:

The contract may not match the capabilities and resources of the new supplier.
Needs, technology, and market conditions may have changed, making the old contract
irrelevant.
Potential legal loopholes if the old contract does not address current conditions or does
not cover new risks.
The old contract may not have performance metrics that match current needs.
Can cause conflict due to unrealistic expectations.
12. WHY DO MANY FIRMS ATTEMPT TO AVOID LITIGATION IN SETTLING CONTRACT DISPUTES?

The main reasons companies avoid litigation:

High cost and time consuming.
The litigation process is public, which can damage reputations.
Uncertainty of the outcome in court.
Permanent damage to business relationships.
Alternatives such as arbitration or mediation are faster, cheaper, and more flexible.
 13. WHAT ARE THE DIFFERENT VENUES AVAILABLE FOR ARBITRATION SETTLEMENTS?

Some venue options for arbitration:

National arbitration institutions (e.g. BANI – Indonesia).
International Chamber of Commerce (ICC).
American Arbitration Association (AAA).
Ad hoc arbitration with a mediator agreed upon by both parties.
Online dispute resolution (ODR) for e-commerce contracts.

The parties to a contract usually agree on the venue of the arbitration at the outset and
include it in a clause of the contract.
14. WHAT ARE THE IMPLICATIONS OF E-COMMERCE ON ENFORCING CONTRACTS? WHERE DO
YOU THINK THE VENUE FOR RESOLUTION SHOULD BE IF A CONFLICT ARISES?
Implications of e-commerce for contracts:
Cross-border transactions are increasing, making legal jurisdictions complex.
Challenges to the validity of digital contracts, especially when there is no physical
signature.
The need for a digital security system to prevent forgery and manipulation.
Potential conflicts related to the place of law (governing law and dispute venue)

Venue selection:
Must be agreed upon in advance and stated in the contract.
A neutral venue (such as international arbitration) may be a wise choice.
In some cases, the law of the country where the buyer or seller is located applies,
depending on the agreement.
 TERIMA KASIH
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