If you are a business owner in France, chances are you have heard of the preferred supplier agreement (PSA) or “accord-cadre” in French. This is a contractual arrangement between a business and its suppliers that has gained in popularity in recent years. Let`s delve into what a Preferred Supplier Agreement is, what its benefits are, and how it functions.

A PSA is a framework agreement between a buyer and a seller. It sets out the terms and conditions that will govern future orders and establishes a relationship between the parties. This kind of agreement is typically signed between a business and a group of suppliers who are selected to fulfill specific contracts in the future.

The primary advantage of a PSA is that it helps in streamlining the procurement process for businesses. Once the terms and conditions are agreed upon, the purchasing process for the buyer becomes more straightforward. They can simply issue a purchase order and the supplier will deliver the goods or services as per the agreement. For suppliers, a PSA provides them with the assurance of future business with the buyer, which helps in long-term planning and forecasting.

Another benefit of a PSA is that it enables the buyer to negotiate better terms and pricing with suppliers. Since the supplier has the guarantee of future orders, they are more likely to offer better pricing and terms. The buyer, in turn, can leverage this to negotiate volume discounts or other favorable terms.

The structure of a PSA may vary, but it typically contains the following key elements:

1. Description of goods or services: This section outlines the products or services that the supplier will deliver as per the agreement.

2. Purchase volumes: This section establishes the expected volumes of goods or services that the supplier will deliver over the term of the agreement.

3. Pricing and payment terms: This section outlines the pricing and payment terms for the goods or services.

4. Delivery terms: This section specifies the delivery terms, including the delivery location, lead time, and any other relevant conditions.

5. Quality standards: This section outlines the quality standards that the supplier`s products or services must meet.

6. Term and termination: This section outlines the term of the agreement and the conditions for termination.

In conclusion, a Preferred Supplier Agreement is a valuable tool for businesses that rely on a group of selected suppliers. It helps in streamlining the procurement process, negotiating better pricing and terms, and providing a long-term assurance of future business to the suppliers. If you are a business owner in France, it is worth considering a PSA to improve your procurement process and foster long-term relationships with your suppliers.