Which contract type fills all actual purchase requirements for specific supplies or services during the contract period from the selected supplier?

Which contract type fills all actual purchase requirements for specific supplies or services during the contract period from the selected supplier?

• A. Open-end contract
• B. Spot purchase
• C. Requirement contract
• D. Term contract

Answer: (C)

This question is about a contract that is designed to cover all real needs for certain goods or services from one supplier over a set period. In a requirements contract, the buyer commits to obtaining all of its actual needs for the defined items from a single supplier during the contract period. The quantities aren’t fixed in advance; they’re driven by the buyer’s actual usage, and the supplier agrees to fill those needs up to any stated maximum under prearranged pricing and terms. This arrangement ensures a steady supply and reduces the administrative effort of issuing new orders each time something is needed. The other options don’t fit this description as closely. An open-end contract doesn’t specify fixed quantities and can lack the binding commitment to cover all actual requirements. A spot purchase is for immediate, one-off buying without a standing long-term arrangement. A term contract has a defined time frame but does not inherently require that all purchases for the specified items come exclusively from one supplier for the entire period.

This question is about a contract that is designed to cover all real needs for certain goods or services from one supplier over a set period. In a requirements contract, the buyer commits to obtaining all of its actual needs for the defined items from a single supplier during the contract period. The quantities aren’t fixed in advance; they’re driven by the buyer’s actual usage, and the supplier agrees to fill those needs up to any stated maximum under prearranged pricing and terms. This arrangement ensures a steady supply and reduces the administrative effort of issuing new orders each time something is needed.

The other options don’t fit this description as closely. An open-end contract doesn’t specify fixed quantities and can lack the binding commitment to cover all actual requirements. A spot purchase is for immediate, one-off buying without a standing long-term arrangement. A term contract has a defined time frame but does not inherently require that all purchases for the specified items come exclusively from one supplier for the entire period.