contract review

Contract review is the formal evaluation of a proposed contract or order before it is accepted, to confirm that all technical, quality, delivery, regulatory, and commercial requirements are understood, feasible, and aligned with the organization’s capabilities and systems.

Key characteristics

In industrial and regulated manufacturing environments, contract review commonly includes:

• Checking that drawings, specifications, standards, and revisions referenced in the contract are available and controlled
• Verifying that special processes, certifications, or regulatory requirements (for example aerospace, defense, medical) are identified and can be met
• Confirming capacity, lead times, and material availability against requested quantities and delivery dates
• Reviewing quality requirements such as inspection levels, FAI/AS9102, traceability, documentation, and record retention
• Ensuring commercial terms (pricing, penalties, warranty, change control) are understood by relevant internal functions
• Aligning customer requirements with internal routings, BOMs, work instructions, and ERP/MES data
• Documenting clarifications, deviations, or concessions that must be agreed with the customer before acceptance

Contract review can apply to customer contracts, purchase orders (POs), long-term agreements (LTAs), and significant changes to existing contracts.

How it appears in operations and systems

Operationally, contract review is often implemented as a cross-functional process involving sales, program management, engineering, quality, and operations. Evidence of contract review may be found in:

• Signed-off review checklists or forms attached to quotes or sales orders
• ERP or CRM workflows that require approval before an order is released to production
• Engineering reviews to translate contract requirements into controlled drawings, routings, and work instructions
• Quality system records showing how special quality and regulatory requirements were identified and communicated to the shop floor and suppliers

Use in quality management and audits

Quality management standards such as ISO 9001 and AS9100 commonly refer to contract review (often under "review of requirements for products and services" or "contractual requirements"). Auditors frequently look for:

• Defined procedures describing how contracts and orders are reviewed before acceptance
• Objective evidence that reviews were performed for sampled orders, including who reviewed and when
• Records of resolved discrepancies between customer requirements and internal capability
• Linkage between contract requirements and downstream controls, such as inspection plans, FAI, or special-process qualifications

Common confusion

• Contract review vs. legal review: Contract review in a manufacturing QMS focuses on operational and technical feasibility, not only legal risk. Legal review may be a part of contract review for complex agreements but is not the whole process.
• Contract review vs. order entry: Order entry is the administrative act of loading an order into ERP or another system. Contract review is the prior or parallel evaluation step that confirms the order should be accepted and under what conditions.

Relation to the derived context

In the context of AS9100 Rev D, contract review is a key source of audit evidence showing that customer and regulatory requirements are identified, understood, and translated into controlled processes, documents, and records before work is started.