Working with Federal Reimbursable Agreements

This chapter provides an overview of federal reimbursable agreements and discusses how to:

Set up federal reimbursable agreements.
Inquire on federal reimbursable agreements.

Note. This chapter discusses features designed to meet federal reimbursable agreement requirements. However, these features are available for use by any customers. If you select the federal reimbursable agreement functionality at the installation level, all contracts that you create appear by default as reimbursable agreements. Also, this chapter only provides information on federal reimbursable agreements as they relate to Contracts.

Understanding Federal Reimbursable Agreements

Federal reimbursable agreements allow federal agencies as well as the Department of Defense to perform work on behalf of others and then be reimbursed for the work performed. The reimbursement agreement amount is established by a negotiation process between the federal agency and an outside party. The federal agency is only reimbursed the amount agreed upon by both parties; therefore, it is imperative that reimbursable agreements are tracked separately from other types of funding.

This section discusses:

Reimbursable contract functionality.
Related Projects page edits.
Reimbursable amounts.

Reimbursable Contract Functionality

Reimbursable agreement functionality differs from the core contract functionality. Reimbursable agreements are subject to additional edits. Here are the specific characteristics of reimbursable contracts and contract lines:

You designate a contract as reimbursable when creating a new contract. Select a Contract Classification of Federal Reimbursable Agreement. This option appears only if you selected the Federal Reimbursable Agreement check box on the Contracts - Installation Options page.
You can add only rate-based products to contract lines on reimbursable agreements.
When adding contract lines to the contract, the system sets all lines to Active status.

You can change this status, but the system picks up only Active contract lines in the Federal Reimbursable Agreement processes.
An amount is required on the Contract - General page upon activation.

This amount is open and editable prior to activation only if the Apportionment Amount Restricted check box is not selected at the installation level. If the Apportionment Amount Restricted check box is selected on the Contracts - Installation Options page, the system sets the amount value for you automatically. The system populates the amount upon save of the project on the Related Projects page for the first contract line.
If you enter an amount on the Contract - General page (when the Apportionment Amount Restricted check box is not selected at the installation level), the system does not overwrite the amount upon save of the first limit and project combination on the Related Projects page.
When the system derives the apportionment amount for the contract header from General Ledger (the Apportionment Amount Restricted check box is selected at the installation level), the system uses the following criteria: the project ID from the Related Projects page, General Ledger business unit (GLBU) from the GLBU associated with the Contracts business unit of the contract, the accounts from the setup page mapping General Ledger accounts to the apportionment amount definition, and the ledger or ledger group from the setup page.

The amount for the contract header is the sum of amounts using the above criteria on the table specified by General Ledger.
You must specify a limit and project/activity combination on the Related Projects page upon save of that page for each contract line.
For reconciliation purposes, you may want to structure your projects and contracts so that one project does not span multiple contracts.

You can associate a project/activity combination with a single contract line only.
Upon save of the Related Projects page, the sum of the limits on all contract lines must be less than or equal to the amount on the Contract - General page.

If the amount on the Contract - General page is left blank, the system retrieves the amount from General Ledger to populate on the Contract - General page and uses that amount in the edit check. If the new contract line that you are adding has a limit that makes the sum of all contract lines exceed the amount on the Contract - General page, the system does not allow you to add the limit and project/activity to the Related Projects page. Also, if the same circumstances apply, but you are adding the contract line in an amendment, the system will not let you ready the amendment to process into the contract.
When adding a contract line to a contract after activation (in amendment mode), you must add the line first.

Process the amendment with the new contract line. Add a project to the Related Projects page of that line and then, on another amendment, specify the limit for the contract line. This is a two-step process requiring the creation of two amendments. First, enter one amendment to add a contract line, ready the amendment, and process the amendment into the contract. Then, enter a second amendment to add a limit to the newly added contract line. Upon save of the second amendment, (or upon changing the second amendment's status to ready), edit checks occur.
Upon adding a contract line to the contract after activation (in amendment mode), in the amendment where the limit is added, the limit of that contract line plus the sum of the limits already on the contract must be less than or equal to the amount on the Contract - General page.

If the sum of the amounts exceeds the contract amount, the system does not allow you to save the new Related Projects page information and, therefore, you cannot set the amendment to ready status.
The amount on the Contract - General page is not editable after activation unless a) the contract is a reimbursable agreement and b) the customer is Federal.

Thus, for nonfederal customers, once a contract is activated, you cannot change the header amount. This is true whether or not you select the Apportionment Amount Restricted check box at the installation level.
All advances for federal reimbursable agreements are noninclusive prepaids.
If the sold to customer on the contract is nonfederal, an additional edit takes place upon adding a limit to a contract line prior to activation or in an amendment.

The edit ensures that the sum of all limits on the contract lines is less than or equal to the sum of all ready prepaids on the contract.
Upon deletion of a prepaid (when the Federal Reimbursable Agreements option is selected at the installation level, the contract has the reimbursable agreement check box selected on the Contract - General page, and the customer on the contract is nonfederal), you may receive a warning.

If the sum of all limits on all contract lines is less than the sum of all ready prepaids, the system warns you that the deletion of the prepaid will result in the limit amounts being greater than the prepaids for this customer's contracts.
When you select the Federal Reimbursable Agreements option at the installation level, the Accounting Rules page points to the General Ledger tables (which include budgetary ChartField values).

When this option is not selected, the system limits your selection to exclude budgetary ChartFields.

Related Projects Page Edits

Upon save of the Related Projects page, the system may make information unavailable for the following reasons:

Upon save, you did not input both the limit and the project/activity combination.
You did not define the apportioned amount accounts on the Account Mapping page in General Ledger.

This resulted in the system not being able to find an apportioned amount in the General Ledger ledgers.
No amount is booked in General Ledger to the specified project ID.

The journal may not be posted or the entry was posted under a different project ID than the one entered on the Related Projects page.
The amount posted in General Ledger was posted to a different General Ledger business unit (GLBU) than to the GLBU associated with the contract's Contracts business unit (CABU).

You must specify both to the same GLBU, and the currencies must be the same.
The amount posted to General Ledger was less than the sum of the existing limits plus the limits being added on the Related Projects page.
The customer on the contract header is classified as a nonfederal customer on the customer record and there are no prepaids associated with the contract.

Or, the sum of the ready prepaids is less than the sum of the existing limits plus the limit being added on the Related Projects page.

Reimbursable Amounts

Each reimbursable amount that the system displays on the Reimbursable Agreement Inquiry page depends upon whether the detail amount for an account is either added or deducted to calculate the higher level amount for each amount type. You must set up these amounts and accounts in General Ledger. The accounts that you use in your organization may differ.

Note. The account numbers referenced in the amount definitions are configurable to reflect the descriptions noted here and are based on your account structure. These configuration formulas are recommendations using JFMIP standards. Set up your own account structure on the Reimbursable Agreement Account page.

Advanced Amount	Equals account 2310 + (account 5200 + unbilled AR) for the search criteria specified for the inquiry. Unbilled AR (UAR) is an account between revenue recognition and billing for transactions processed by Project Costing and Contracts, and should be included in the calculation. The advanced amount is paid in advance by the government agency to the company that has a reimbursement agreement with them for providing the product or service. It is unearned revenue (prepaid balance) because the company that receives the funds has not performed any services or provided any products yet. It is reduced by the amounts that are earned by the company through providing a service or product (account 5200) and UAR.
Advanced Amount Remaining	Equals the sum of account 2310 for the specified inquiry search criteria. Also known as account 2310: Advances From Others. This is the amount that still remains in account 2310 (Advanced Amount) that is offset by the revenue recognized for services performed or products provided by the company that is subject to the reimbursement agreement.
Earned Amount	Equals the sum of account 5200 for the specified inquiry search criteria. Also known as account 5200: Revenue From Services Provided. This account represents revenue that you can recognize because the company has performed a service or provided a product to the government agency that is eligible for the reimbursement. This account reduces account 2310: Advanced Amount.
Billed Amount	Equals the Advanced Amount minus account 2310. This is the amount that you bill to the government agency because the company provided a service or product that was eligible for reimbursement. If the advanced amount account no longer has funds available, then you must invoice this amount to the government agency because the services or product provided were subject to the reimbursement agreement. If the advanced amount account still has funds available, then you apply the bill to the account.
Reimbursable Agreement Amount	Equals the total contract amount for the contract ID linked to a specific project ID. This is the total negotiated reimbursement amount that was agreed to by the company and the government agency for the service or product to be provided. It is the total contract amount for the contract ID that is linked to a specific project ID.
Unbilled Amount	Equals the sum of the UAR account for the specified inquiry search criteria. This represents the sum of UAR. UAR is a holding account that is used to manage the timing differences between revenue recognition and billing. It is used as an offset to the advanced amount account.
Obligated Amount	Equals the sum of accounts 4802, 4872, 4882, 4801, 4871, and 4881 for the specified inquiry search criteria. This is the amount that the government agency is obligated to pay to the company for providing a service or product that was under the reimbursable agreement. This amount has not been paid to the company yet. It is the sum of the following accounts: 4802: Unexpended Obligations - Prepaid/Advanced 4872: Downward Adjustments of Prior-Year Prepaid/Advance Unexpended Obligations Refunds Collected 4882: Upward Adjustments of Prior-Year Prepaid/Advanced Unexpended Obligations 4801: Unexpended Obligations - Unpaid 4871: Downward Adjustments of Prior-Year Unpaid Unexpended Obligations 4881: Upward Adjustments of Prior-Year Unpaid Unexpended Obligations
Expended Amount	Equals the sum of accounts 4902, 4972, 4982, 4901, 4971, and 4981 for the specified inquiry search criteria. This is the amount that the government agency paid to the company for providing a service or product that was under the reimbursable agreement. It is the sum of the following accounts: 4902: Expended Authority - Paid 4972: Downward Adjustments of Prior-Year Paid Expended Authority Refunds Collected 4982: Upward Adjustments of Prior-Year Paid Expended Authority 4901: Expended Authority - Unpaid 4971: Downward Adjustments of Prior-Year Unpaid Expended Authority 4981: Upward Adjustments of Prior-Year Unpaid Expended Authority
Collected Amount	Equals the sum of account 1030 for the specified inquiry search criteria. It is the sum of account 1030, which is the fund balance for the company. It is the amount that the company has collected from the government agency for providing a service or product that was subject to the reimbursable agreement.
Apportionment Amount	User-defined amount. Based upon an allotment of funds, the apportionment amount is used specifically for a certain project or company.

Setting Up Federal Reimbursable Agreements

This section lists the pages used to set up federal reimbursable agreements.

Pages Used To Set Up Federal Reimbursable Agreements

Page Name	Object Name	Navigation	Usage
Installation Options - Contracts	INSTALLATION_CA	Set Up Financials/Supply Chain, Install, Installation Options, and then click the Contracts link.	Select the Federal Reimbursable Agreements check box so that contracts created will have a reimbursable agreement indicator that allows you to tag a contract as a reimbursable agreement. Select the Apportioned Amount Restricted check box (optional). Note. The Apportioned Amount Restricted check box does not appear on the page until you select the Federal Reimbursable Agreements check box and save the page.
Reimbursable Agreement Account	RMC18_SETUP	General Ledger, Federal Reports, Define Reimbursable Account, Reimbursable Agreement Account	Define accounts for amount advanced, amount advanced remaining, amount billed, amount earned, amount unbilled, amount obligated, amount expected, and amount collected.
Contract - General	CA_HDR_PNL	Customer Contracts, Create and Amend, General Information	Set up and manage contract header information. Specify a reimbursable amount.
Prepaid Balances - Prepaids	CA_PPD_CONTRACT	Click the Prepaids link in the Go To drop-down list box on the Contract - General page.	Establish prepaid balance amounts.
Billing Plan - Billing Plan General	CA_BP_GEN_INFO	Click the Create Bill Plan link on the Initial Billing tab of the Prepaid Balances - Prepaids page.	Define the high-level billing information for a billing plan. The system associates the information you define on this page to all billing lines that you create under thus billing plan. This information is then sent to Billing.
Contract - Lines	CA_OBLIGATIONS	Customer Contracts, Create and Amend, General Information, Lines	Add products to create a contract. Each product appears on the contract as a distinct contract line number.
Related Projects	CA_DETAIL_PROJ	Click the Contract Terms link on the Details tab of the Contract - Lines page.	Record an order against the reimbursable amount as a limit. Create a project/activity combination for the contract line. Attach a rate set to a contract line.

Inquiring On Federal Reimbursable Agreements

Reimbursable agreements are vital pieces of information for federal agencies and the Department of Defense. It is important for these agencies to have access to the current status, reimbursable amount, billing limit, amount expended against the agreement, and amounts collected against the agreement. This section discusses how to:

Specify reimbursable agreement inquiry criteria.
View reimbursable agreement inquiries per contract.

Pages Used to Inquire On Federal Reimbursable Agreements

Page Name	Object Name	Navigation	Usage
Reimbursable Agreement Inquiry Criteria	INQ_RMC18_CRITERIA	Customer Contracts, Review Contract Information, Reimbursable Agreement	Select criteria to view reimbursable agreements.
Reimbursable Agreement Inquiry Results	INQ_RMC18_RESULTS	Customer Contracts, Review Contract Information, Reimbursable Agreement, and then click the Inquiry Results link.	View reimbursable agreement information.

Specifying Reimbursable Agreement Inquiry Criteria

Access the Reimbursable Agreement Inquiry Criteria page.

This page enables you to specify inquiry criteria.

Inquiry Name	Displays the name entered in the search.
GL Business Unit	Select a General Ledger business unit.
Ledger	Select a ledger. This value represents the ledger to which all the contract accounting entry lines are posted; it appears by default as the primary ledger of the default ledger group for the business unit.
Project	Select a Project Costing ID. This value represents the project ID related to this contract.
ChartField Criteria	Enter optional ChartField criteria in addition to the required criteria.
Refresh	Click to reload the ChartFields in the ChartField grid.
Inquiry Results	Click to run the inquiry and view results.

Viewing Reimbursable Agreement Inquiries per Contract

Access the Reimbursable Agreement Inquiry Results page.

This page enables you to view reimbursable agreements based on the selections that you made on the Reimbursable Agreement Inquiry Criteria page.

Note. Your General Ledger business unit currency and contract currency must be the same.

Reimbursable Agreement	Displays the reimbursable agreement, which represents the contract ID.
Reimbursable Description	Displays the contract description.
Customer	Displays the sold to customer stated in the contract.
Project	Displays the project related to this contract.
ChartField Criteria	Represents the results of the criteria entered on the Reimbursable Agreement Inquiry Criteria page.

The reimbursable agreement amount fields represent the monetary amount in the prospective currency.