This paper considers a two-component assembly system that makes different types of purchasing contracts by component type and studies the issue of coordinating those contracts. Acquisition of type 1 component is based on the long-term contract. In contrast, type 2 component is intermittently purchased under the sort-term contract. We identify the structural properties of the optimal short-term contract and investigate how the changes in system parameters affect the optimal performance. To provide managerial insights, we compare the short-term and long-term contracts for type 2 component and discuss the conditions that make the short-term contract preferable to the long-term contract. We also present a result which shows that coordinating the contracts of type 1 and type 2 components can be significantly profitable over uncoordinating them.