Define installation level setting for Contracts.

To set up your processing settings at the overall system level, you must define your options on the Installation Options-Contracts page. You can define processing settings for the accounting date that is used for revenue recognition, limit processing, and forecasting.

For rate-based contract lines assigned to fee types (cost-plus), you must indicate whether you are separating billing and revenue. This setting is key to cost-plus contract line processing as it controls whether the revenue fields, links and pages become visible and available for use.

See Defining Contracts Installation Options.

Define Contracts business units.

Contracts business units are identification codes that represent a high-level organization of business information.

Contracts, accounting rules, fees, rates and progress payment settings are all defined by the contracts business unit.

See Understanding Contracts Business Units.

Define accounting distributions.

Accounting distributions enable the system to create accounting entries for amount-based contract lines.

Valid unbilled accounts receivable, revenue, and deferred revenue (optional) account distribution codes must be assigned to contract lines before the contract can be activated, bills can be generated, and revenue can be processed for amount-based contract lines, prepaids, and progress payment amounts.

See Fixed-Amount Contract Lines.

Define accounting rules.

Accounting rules enable the system to create accounting entries for rate-based contract lines and rate-based contract lines that are assigned to fee types (cost-plus).

Valid unbilled accounts receivable and revenue accounting distributions must be defined, and assigned to the accounting rules before bills can be generated and revenue can be processed for rate-based contract lines and rate-based contract lines that are associated with fee types (cost-plus).

Note. If you select the Separate Billing and Revenue checkbox on the Installation Options-Contracts page, the system uses the PSRV2 analysis type when processing revenue accounting entries for rate-based contract lines associated with fee types (cost-plus). Therefore, in addition to defining accounting rules used for bill processing, you must also define a separate accounting rule for revenue (REV) to generate revenue accounting entries.

See Rate-based Contract Lines.

See Cost-Plus Contract Line Accounting Distribution.

Define contract statuses.

Contract statuses provide a visual indicator of where the contract is within the contract life cycle and designates when a contract is available for look-up and processing.

Contract statuses are user-defined and are associated with a processing status that controls the contract's eligibility for processing.

See Defining Contract Statuses.

Define contract types.

Contract types enable you to define categories for your contracts for reporting purposes. If you are using contract milestones, you can also use contract types to limit the types of contracts in which you can use a specific milestone.

Examples of contract types could include Health and Human Services or Defense Contracts.

See Defining Contract Types.

Define billing and revenue plan templates (optional).

Billing and revenue plan templates enable you to automate billing and revenue plan setup. Billing plans are required and are used to process bills for contract line items, fees and progress payments requests.

Revenue plans are required to process revenue accounting entries for contract line items and fees.

If you do not define billing or revenue plan templates, then you must manually set up billing and revenue plans for your contract lines and progress payments requests before you can process bills and recognize revenue.

See Defining Revenue and Billing Plan Templates.

Define billing plan detail templates (optional).

Billing plan detail templates enable you to automatically override the billing defaults that are defined for a contracts billing business unit and contract header.

See Defining Billing Plan Detail Templates.

Define billing summarization templates (optional).

Summarization templates enable you to define criteria that the system can use to summarize billing plan lines.

See Defining Billing Summarization Templates.

Define legal entities.

Legal entities are used in Contracts to track the legal entity within your company who signs a particular contract.

See Defining Legal Entities.

Define milestones (optional).

Milestones can control the timing of billing and revenue recognition processing for amount-based contract lines, incentive and award fees.

Setting up milestones can include defining milestone classifications, milestone templates, and custom SQL statements to use for milestone conditions.

See Defining Milestones.

Define amendment types.

Any changes to an active contract's products, terms, or conditions is controlled by amendment processing.

Amendment types enable you to define classifications of modifications that can be made to an active contract.

See Understanding Amendments.

See Defining Amendment Types.

Define amendment reasons.

Amendment reasons enable you to define quick explanations as to why an amendment is performed.

See Defining Amendment Reasons.

Define email notification workflow and support teams (optional).

Support teams represent key personnel in your organization that are involved in the contract life cycle. You can set up email notification and workflow so that specific support team members are notified when the status of a particular contract changes.

See Defining Email Notifications.

Define products.

You must define the products that represent the good and services that you deliver in your contracts, including the specification of Contracts attributes. Once defined, you add these products to your contract lines. Contract lines are the basis for your billing and revenue recognition activities.

Only amount and rate-based products can be associated with government contracts. Renewable products are not eligible for government contracts.

See Understanding Products.

Define rate sets and rate plans.

Rate sets enable you to define allowable expense rates for your rate-based contract lines and rate-based contract lines that are assigned to fee types (cost-plus) and enable the system to create billable and cost rows.

Rate plans enable you to bundle multiple rate sets together to define a sequence of costing and rate applications that enable the system to calculate both your direct and indirect costs.

See Rate Setup.

See Pricing Rate-Based Contract Lines.

Amount-based products

• Progress payments processing

• Milestones

Rate-based products

• Prepaid processing

• Cost-plus functionality

• Withholding management

• Variance pricing

• Limit management

BU Definition (Business Unit Definition)

BUS_UNIT_TBL_CA

Set Up Financials/Supply Chain, Business Unit Related, Contracts, Contracts Definition, BU Definition

Create a new business unit definition or modify an existing one for your government contracts.

Defaults

BUS_UNIT_TBL_CA1

Set Up Financials/Supply Chain, Business Unit Related, Contracts, Contracts Definition, Defaults

Specify field value defaults that the system uses to automatically populate fields on the contract for contract processing and management.

Processing Options

BUS_UNIT_TBL_CA2

Set Up Financials/Supply Chain, Business Unit Related, Contracts, Contracts Definition, Processing Options

Define processing attributes to incorporate flexibility and automation in your Contracts system when managing revenue or performing billing and revenue credits and adjustments.

Fee Definition

CA_BU_FEE_DEF

Set Up Financials/Supply Chain, Business Unit Related, Contracts, Contracts Definition, Fee Definition

You must associate cost-reimbursable (cost-plus) contract lines with a fee type for the rate-based contract line to have cost-plus functionality. Contracts support the fee types of Fixed, Award, Incentive and Other. You must define each fee type and its associated attributes at the business unit level. The fee type definition is used by the system to calculate the appropriate fees for the cost-plus contract line.

GL Unit (General Ledger Unit)

Associate each Contracts business unit with a general ledger business unit. General Ledger business units define the accounting processing for associated Contracts business units. All contracts created for this Contracts business unit use this General Ledger business unit to generate entries that interact with General Ledger. After you create government contracts using this business unit, the general ledger business unit should not be modified or your ledgers might become out of sync.

OM Unit (Order Management Unit)

Select a default PeopleSoft Enterprise Order Management business unit for contracts that are created under this Contracts business unit. You can only select Order Management business units that are linked to the same General Ledger business unit as this Contracts business unit

BI Unit (Billing Unit)

Select a default Billing business unit for contracts that are created under this Contracts business unit. You can only select Billing business units that are linked to the same General Ledger business unit as this Contracts business unit.

Currency Code

Select a default currency for contracts that are created using this business unit.

Rate Type

Select the group of exchange rates that are used to convert contract currency amounts to the base currency of the General Ledger system. You set up rate types when defining your general options.

Enforce Contract Status Security

Select to limit the list of users who can change the status of a contract to only those to whom you have given security access on the User Preferences - Contracts page.

Delete Internal Notes

Select to enable users to delete internal notes.

Update Internal Notes

Select to enable users to update internal notes.

Contract Admin (Contract Administrator)

Select a contract administrator to associate to this business unit. This value automatically populates the contract administrator field on the contract header when a government contract is created using this business unit.

Contract Type

Select a contract type to categorize your contracts for reporting purposes. The value that you select automatically populates the contract type field on the contact header when a government contract is created using this business unit.

Dist Rule Code (Distribution Rule Code)

Select the distribution rule code to associate to the Contracts business unit. Distribution rules identify the distribution accounting that the system associates with an amount-based contract line.

The distribution rule code identifies the distribution rules to use for a particular product when the product is selected for the contract within this Contracts business unit. You can define any number of combination criteria and hierarchy for the distribution rules. These rules identify the accounting distribution sets and determine in what order to apply them.

Unbilled AR (Unbilled Accounts Receivable)

When revenue is managed from Contracts, revenue is recorded to an unbilled accounts receivable account. When billing occurs, Billing generates an offsetting entry. The system uses the unbilled accounts receivable account that are defined at the business unit level as the high-level default value for every contract that is created under this business unit.

Legal Entity

Select a legal entity to appear by default for contracts created using this business unit. While this legal entity is not directly linked to the legal entity in General Ledger, this field enables you to capture your organization's legal entity that enters into a contractual agreement with the customer. This value, which is a default on the contract, can be overridden. This value automatically populates the appropriate field on the contract header.

Bill Type

Select a default bill type for contracts that are created under this Contracts business unit. The bill type represents the category of activity that is being billed.

Bill Source

Select to enable Billing to identify from where the billing activity came and then to associate default billing information with that billing activity.

Ship From

Select from location codes that are defined on the Location Definition page. This value is a default for each contract but can be overridden on the billing plan.

Prepaid Tax Timing

Select the timing of when prepaids are taxed. Select from Tax on Initial Bill or Tax on Utilization. This value appears by default on the prepaid setup for contracts created using this business unit. You can override this value on the prepaid setup pages.

Progress Payment Rate

Enter the progress payment rate percentage as defined by the Federal Acquisition Regulations (FAR). This value appears by default on the Progress Payment Terms - General page and can be overridden at the progress payment terms level.

Liquidation Rate

Enter the progress payment liquidation rate percentage as defined by the Federal Acquisition Regulations (FAR). This value appears by default on the Progress Payment Terms - General page and can be overridden at the progress payment terms level.

Deferred Revenue Override

Select the Deferred Revenue Override check box to indicate whether a user can override the deferred revenue option on the contract line. The deferred revenue option can be selected at the product group option level to automatically populate the deferred revenue settings on a contract line when a product that is associated with that product group option is added to the contract.

Note. The deferred revenue feature only applies to amount-based contract lines. After a contact is in Active processing status, you cannot modify the deferred revenue options for the contract line. Instead, you must make any modifications using amendment processing.

Revenue Recognition Method Override

Select this override check box to indicate whether a user can override the revenue recognition method on a contract line. Revenue recognition methods dictate the type of revenue recognition plan or template that can be associated with a contract line.

The contract line can inherit its revenue recognition method from the product definition. When this override check box is not selected, the system processes the revenue for the contract line using the default revenue recognition method.

Edit Combinations

Select the Edit Combinations check box if you want the Accounting Rules Process (PSA_ACCTGGL) to run the combination edit process for transactions that are processed by the Transaction Billing Processor.

Note. The Edit Combinations feature is only used by the Transaction Billing Processor. Government contracts do not use this feature.

Proration Method

Provides the rules that the system uses to determine how much to apportion to each event for revenue plans with a revenue recognition method of apportionment. Select from:

• By Days Within Range: The system divides the number of days in the period by the number of days that are specified in the apportionment date range.

• Evenly Using All Pds: The system divides the total amount by the number of periods in the apportionment date range. Revenue is recognized in equal portions for each event, regardless of the number of days in each period.

Future Period Accounting Dates

Select the date to use as the accounting date for apportionment revenue recognition events. Select from:

• First Day in Accounting Period: Select this option to use the first day in the calendar month of the from date as the accounting date for the apportionment revenue recognition events.

• Last Day in Accounting Period: Select this option to use the last day in the calendar month of the to date as the accounting date for the apportionment revenue recognition events.

• User Defined: Select this option to define the accounting date each time the system builds apportionment events.

Bill Plan Detail Template ID

Select a bill plan detail template ID to override the fields on the billing plan for on-demand contracts. If you select a template on this page, the billing plan detail template overrides the corresponding fields on the billing plan when a billing plan is created.

Review Timing

Enter a value in days. The system uses this value to determine when you must begin reviewing renewable contract lines. You can override this value for each renewable contract line on the Review Renewals page using either the control or default settings that you select on this page.

Control

Select the Control option to enable users to override the Review Timing Days field on the Review Renewals page with a value that is greater than or equal to the value that is entered in the Review Timing field.

Default

Select the Default option to enable users to override the Review Timing Days field on the Review Renewals page with a value that is less than, greater than, or equal to the value that is entered in the Review Timing field.

Change Billing Retroactively

Select this option to enable the system to adjust billing events retroactively when a contract line is cancelled or the contract line amount is modified during amendment processing. The option that is selected at the business unit level can be overridden at the contract line level.

If this option is not selected at the business unit or contract line level, the user can only adjust any remaining future events for the contract line.

Change Revenue Retroactively

Select this option to enable the system to adjust revenue events retroactively when a contract line is cancelled or if the contract line amount is modified during amendment processing. The option that is selected at the business unit level can be overridden at the contract line level.

If this option is not selected at the business unit or contract line level, the user can only adjust any remaining future events for the contract line.

Fee Type

Select the fee type for which you will define fee calculation criteria. You must set up fee definitions for every fee type that will be associated to cost-plus contract lines on contracts that were created under the business unit. Contracts supports the following four fee types:

• Award Fee: Represents a percentage of total costs that are calculated using a base fee percentage, plus an additional award fee. The contractor can earn the award fee if certain contract deliverables are met or if work is completed by a specific date. The government determines whether all, a portion, or no award fee is awarded to a contractor based on their performance.

• Fixed Fee: Represents a percentage of total costs that are calculated and applied on top of the total costs incurred. This amount is determined by an agreement between the contractor and the government and is recognized as profit for the contractor when completing a service or product for the government.

• Incentive Fee: Represents a calculation of fees using cost over-run and under-run percentages as determined by the government, as well as, target, minimum, and maximum fee amounts. The incentive fee amount that is awarded depends on the contractor's performance of the contract and whether their costs fall within the cost over-run and under-run criteria that is agreed upon with the government.

• Other Fee: Represents a fee that is not associated with any special attributes. Fees in this category are calculated based on a captured amount and user-defined billing and revenue fee limits.

Note. Fee Type is a required field.

BIL Analysis Group (Billing Analysis Group)

Select the billing analysis group that contains the transaction analysis types that are included in the billing fee calculations.

Note. This is a required field.

REV Analysis Group (Revenue Analysis Group)

Select the revenue analysis group that contains the transaction analysis types that are included in the revenue fee calculations.

Note. This is a required field if Separate Billing and Revenue is selected on the Installation Options - Contracts page. This field is hidden if Separate Billing and Revenue is not selected on the Installation Options - Contracts page.

Analysis Type

Select the analysis type to stamp on the target billing fee rows that are created from the billing fee worksheets. The billing target fee attributes analysis types identify rows for bill processing for the contract lines.

Note. The analysis type selected must be associated with the PSWKS analysis group in Project Costing. This is a required field.

Source Type

Select the source type to stamp on the target billing fee rows that are created from the billing fee worksheets.

Note. Only one source type can be selected for the target billing fee row. This is a required field.

Category

Select the category to stamp on the target billing fee rows that are created from the billing fee worksheets. Specifying a category is optional, but enables you to further identify the billing fee row that is created. For example, you can identify billing fee rows for fixed fees as CPFF (Cost-Plus Fixed Fee).

Only one category can be selected for the target billing fee row. Only categories that were previously defined in Project Costing can be selected.

Subcategory

Select the subcategory to stamp on the target billing fee rows that are created from the billing fee worksheets. Specifying a subcategory is optional, but enables you to further identify the billing fee row that is being created.

Only one subcategory can be selected for the target billing fee row. Only subcategories that were previously defined in Project Costing can be selected.

Analysis Type

Select the analysis type to stamp on the target revenue fee rows that are created from the revenue fee worksheets. Revenue target fee attribute analysis types identify rows for revenue recognition processing for the contract lines.

Note. The analysis type that you select must be associated with the PSRV2 analysis group in Project Costing. This is a required field.

Source Type

Select the source type to stamp on the target revenue fee rows that are created from the revenue fee worksheets.

Note. Only one source type can be selected for the target revenue fee row. This is a required field.

Category

Select the category to stamp on the target revenue fee rows that are created from the revenue fee worksheets. Specifying a category is optional, but enables you to further identify the revenue fee row that are being created. For example, you can identify revenue fee rows for fixed fees as CPFF (Cost-Plus Fixed Fee).

Only one category can be selected for the target revenue fee row. Only categories that were previously defined in Project Costing can be selected.

Subcategory

Select the subcategory to stamp on the target revenue fee rows that are created from the revenue fee worksheets. Specifying a subcategory is optional, but enables you to further identify the revenue fee row that is being created.

Only one subcategory can be selected for the target revenue fee row. Only subcategories that were previously defined in Project Costing can be selected.

Source Type

Select the Project Costing ChartField source types that you want to fully exclude in the fee calculations for the fee type defined under the Contracts business unit. You can exclude as many source types as needed, but you cannot use a wildcard in this field. The system cannot calculate billing or revenue fees when you use a wildcard.

Note. The system will exclude any source types that are selected on this page from both billing and revenue fee calculations.