Abstract
The role of contracts in validating specifications has been neglected in research, as they are thought of as commercial and legal documents with little value as far as validation is concerned. The term "validate" does not mean preapproval before production, but acceptance of performance of the supplier (through validation parameters contained in a contract) to deliver to specification during the development/production of the final product. This paper demonstrates the role of contracts in validating specifications by proposing the elements of a contract that can aid validation. Two in-depth case studies were conducted in one auto and one aircraft original-equipment manufacturing located in Europe. Data were collected through participant observation, interviews and analysis of archival sources. A strategic contract structure encompassing two categories of elements, the validation criteria for entry and the validation criteria for remaining in the business, is proposed. The strategic contract structure can aid managers involved in the specification process to structure development projects with suppliers. This will help attain planned goals.
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