workflow to Change field value in Active Contracts

Hi,

We have created an option set "Contract Type' in Contracts form.  We want to change the contract type value for some of the contracts with Active status.

I created an on-demand workflow to replace the old contract types values with new ones. However, it did not change the value.

For example: to change contract type from A to B, the workflow is:

If Contract:Contract Type equals [A], then

Update: Contract   Set Properties >> Contract Type equals [B]

Please advise that at which point I am making mistake. And, what would be the right way of updating field(s) in an active Contract?

Thanks in advance.

Saima