What is Fixed Price with Prospective Price Redetermination in SAP PSM-GPR - Procurement for Public Sector?

SAP Term: Fixed Price with Prospective Price Redetermination

• Component: PSM-GPR

• Component Name: Procurement for Public Sector

• Description: A pricing arrangement where an organization agrees to pay a price for an initial period of performance, or delivery of goods or services. In addition, an agreement is made to reevaluate the pricing for subsequent performance or delivery at a specified time after that initial period.

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• Key Concepts: 
  Fixed Price with Prospective Price Redetermination is a procurement method used in the Public Sector Module of SAP (PSM-GPR). This method allows for the price of an item to be determined at the time of purchase, but also allows for the price to be adjusted in the future based on market conditions. This type of procurement is often used when purchasing items that may fluctuate in price over time, such as commodities or raw materials.
  
  How to Use It: 
  When using Fixed Price with Prospective Price Redetermination, the buyer and seller agree on a fixed price at the time of purchase. This fixed price is then used for all subsequent transactions until a predetermined date. At this predetermined date, the buyer and seller can renegotiate the price based on current market conditions. This allows for both parties to benefit from any changes in market prices.
  
  Tips & Tricks: 
  When using Fixed Price with Prospective Price Redetermination, it is important to ensure that both parties are aware of the terms of the agreement. This includes the fixed price, the date when the price can be renegotiated, and any other conditions that may affect the agreement. It is also important to keep track of market prices so that both parties can make informed decisions when renegotiating the price.
  
  Related Information: 
  For more information about Fixed Price with Prospective Price Redetermination, please refer to SAP's documentation on PSM-GPR Procurement for Public Sector. Additionally, there are many online resources available that provide more detailed information about this type of procurement.