Integrating with PeopleSoft Project Costing
You associate contract lines with product IDs on a government contract. The contract lines represent the goods or services that are contracted with the government for delivery. These goods and services are typically associated with projects and activities that are contract specific and do not span multiple contracts. To manage these projects and activities and their various attributes, PeopleSoft Contracts uses its integration with PeopleSoft Project Costing. Data relating to projects and activities is primarily managed by PeopleSoft Project Costing, while associations between project/activities and contract lines are managed by PeopleSoft Contracts.
PeopleSoft Contracts links to the following data in PeopleSoft Project Costing:
Project and activity data.
Inception-to-date costs, billing and revenue.
Estimated costs.
Transaction costs.
Rate sets.
Rate plans.
Variance rates.
Accounting chartfield data for rate-based contracts lines.
Tracking Costs for Rate-Based Contract Lines for Government Contracts
For government contracts, PeopleSoft Contracts uses the project, activity, and transaction data stored in PeopleSoft Project Costing to track and calculate costs and fees for billing and revenue and to create accounting entries for revenue recognition on rate-based products or services. Any transactions generated by government contracts (for example, fees and withholding) are sent back to PeopleSoft Project Costing for analysis.
For progress payments, PeopleSoft Contracts enables you to assign projects and activities to progress payment terms to track costs for progress payment and progress payment liquidation processing. When you define a progress payment amount and associate it to an amount-based contract line, you can assign one project and activity to the contract line. However, you must also assign at least one project and activity to the progress payment terms and conditions. The project and activity assigned to the progress payment terms is used by the system to determine which set of costs to use when calculating allowable progress payment amounts and progress payment liquidation amounts. The project and activity assigned to the amount-based contract line is used to identify the Project Transaction (PROJ_RESOURCE) rows in project costing.
See Understanding Creating Government Contracts, Understanding Progress Payment Amounts.
Pricing Rate-Based Contract Lines for Government Contracts
Before you activate a contract, you must fully allocate your contract amounts across your contract lines using the Billing Allocation page and Revenue Allocation page. In addition, for rate-based contract lines and rate-based contract lines with fee types (cost-plus), you must define rate sets or rate plans and assign them to the contract line.
Rate sets and rate plans are set up using PeopleSoft Project Costing. Rate sets or rate plans can be defined and made available for all contract lines, or you can define contact-specific rate sets or rate plans. Contract-specific rate sets and rate plans are defined for use only with a specific contract line.
When transactions occur in feeder systems for the contract lines, they are passed to PeopleSoft Project Costing and priced using the standard or contract-specific rate sets or rate plans assigned to the contract line. The resulting cost rows are used for billing, revenue recognition, fee processing, progress payment calculations, and so on for government contracts. Only one assigned rate set or rate plan can be active for a contract line at any one point in time.
A rate set enables you to define a rate structure for costing, billing, or revenue. A rate plan enables you to combine multiple rate sets with multiple rate definition types allowing you to calculate direct and indirect costs which are then used as the basis for billing and revenue recognition.
Defining Rate-Based Contract Lines Accounting Distributions for Government Contracts
You must assign accounting distributions to contract lines to generate appropriate accounting entries for billing and revenue. For amount-based contract lines, you define your accounting distributions in the system and then assign the accounting distributions to the product and contract line. For rate-based contract lines and rate-based contract lines assigned to fee types (cost-plus), you must define the accounting distributions using accounting rules.
Accounting rules are defined in PeopleSoft Project Costing. Accounting rules are used by the system to generate the accounting entries for billing and revenue when the Contracts/Billing Interface (CA_BI_INTFC) process and the As-Incurred revenue (PSA_ACCTGGL) process are run, respectively.