Never used it but in theory

Never used it but in theory you can do that through contact PO.

steps would be like
1. Create a contract PO with a supplier - Contract POs are long term contract for terms & conditions and does not contain any item / prices.

2. Next when you need a supply from that supplier, create a standard PO with reference to the above contract PO

3. Now contract PO doesnt contain any item/price. So you can use advance price with supplier & item attributes to default the PO price.

4. Next processes are similar to standard PO. Approve the PO, Receive the material, Create an invoice & match it to the PO. Make a payment against the invoice

I didnt ask the question but

I didnt ask the question but after reading your steps thought of giving it a try. I follwed all your steps
1. created a contract PO
2. created a new price list for one purchasing item and attached the supplier in attribute
3. I expect the system to default the price while creating a new standard PO
but its not

Please let me know if I am missing any step

You need to create an ASL for

You need to create an ASL for the supplier and attach the contract to that ASL

The complete steps as given

The complete steps as given metalink

STEPS:
1. Set up Profile 'QP: Licensed for Product' at site level
- RESPONSIBILITY = System Administrator
- NAVIGATION = Profile > System
- Query profile 'QP: Licensed for Product' and set Site value = 'Purchasing'
2. Create contract PO for select Supplier/Site
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Purchase Orders > Purchase Orders
- Create and approve an Contract PO with selected supplier/site
3. Setup ASL with Supplier/Site that used in above Contract PO for selected item, also sourcing to above Contract PO in ASL's attribute
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Supply Base > Approved Supplier List
4. Create Source Rule for Supplier/site that used in above contract PO
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Supply Base > Sourcing Rules
5. Assign above Sourcing Rule and item combination to Assignment Set
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Supply Base > Assign Sourcing Rules
6. Setup Profile 'MRP: Default Sourcing Assignment Set' at user level with value of above assignment set
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Personal Profile Values
7. Setup Price List for Advance Pricing
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Advanced Pricing > Price Lists > Price List Setup
- Create Price List header
- At 'List Lines' section, enter Product Context = Item, Product Attribute = Item Number,
Product Value = item number that used to create ASL from above
Value = (Price intent to use for item selected above in this price list)
8. Test the setup in Requisition form
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Requisitions > Requisitions
- Steps
- Enter above item, ASL/Sourcing will then automatically populate the Supplier/site from source contract PO as well as item information from
Item Master into Requisition form
- Click on 'Source Detail' tab, enter 'Document Type' = Contract, Document = above source contract PO
- Item price will automatically pick up from above defined price list
9. Test the setup in Purchase Order form
- RESPONSIBILITY = Purchasing, Vision Operations (USA)
- NAVIGATION = Purchase Orders > Purchase Orders
- Steps
- Enter PO Header with above supplier/site
- Enter item
- Click on 'Reference Documents', enter Contract with above contract PO, the price from PO line will automatically update with price defined in Price
List.