Creating and Administering Government Contracts

The steps for creating and administering a contract are essentially the same whether you are creating a government or non-government contract. To create and administer a government contract, complete these high-level steps:

1. Create a new contract with a contract classification of Government, and enter the overall contract terms and conditions.

   Selecting the contract classification of Government is required to activate the government contract specific fields and attributes on the Contract Entry pages.

2. Select the products and services that you will provide using Product identifiers.

   The products selected are added to the contract and represent the amount-based and rate-based contract lines, which you use to calculate contract amounts and manage the financial terms and conditions of the contract.

3. Define the contract terms for the rate-based contract lines.

   Enter the limit details, period of performance data, and in the case of cost plus contract lines, fee calculation and processing details.

4. Associate PeopleSoft Project Costing project identifiers, activity identifiers, and in the case of rate-based contract lines, pricing rates to contract lines.

   To track and manage project transactions associated with rate-based contract lines, link at least one project and activity set to the contract line.

   Note: It is recommended that you consider structuring your contracts and projects such that a project is associated with only a single contract, to avoid potential reconciliation issues if the same project identifier is used to identify withholding and fee rows for multiple contracts.

5. Associate a rate set, rate plan, or contract specific rate set or rate plan to the rate-based contract lines to calculate the associated incurred and estimated costs for a contract line, project, and activity.

   The system uses the rates, project, and activity data to price cost transactions and apply any applicable limits or withholding parameters to determine how much of the costs or revenue should be passed to PeopleSoft Billing or PeopleSoft General Ledger, respectively.

   After a project and activity combination is assigned to one rate-based contract line it cannot be assigned, to another rate-based contract line at the same time.

6. Verify accounting distributions for the contract lines.

   Each contract line is associated with its own set of accounting distributions. Rate-based contract lines retrieve their accounting distributions from accounting rules defined in PeopleSoft Project Costing.

7. Allocate total contract billing and total contract revenue amounts across amount and rate based contract lines.

   Amounts and limits for billing should always be updated. Amounts and limits for revenue should be updated if the contract separates billing and revenue. If billing and revenue are not separated on the contract, then the revenue amounts and limits are display only and programmatically set to equal the values used for billing.

8. Associate each contract line with a billing plan defined in PeopleSoft Contracts.

   Define, administer, and maintain billing schedules and billing rules for the products and services that you provide under the contract. Billing plans are required to bill for the contract line.

   You can predefine templates and associate them with a product ID to have the system automatically create billing plans and associate them to contract lines.

9. Associate each contract line with a revenue plan defined in PeopleSoft Contracts.

   For amount-based contract lines, either PeopleSoft Contracts or PeopleSoft Billing can manage revenue. For rate-based contract lines and rate-based contract lines assigned to fee types (cost-plus), PeopleSoft Contracts must manage revenue.

   When PeopleSoft Contracts manages revenue, you associate each contract line with a defined revenue plan. Revenue plans enable you to define, administer, and maintain revenue schedules for the products and services that you manage under the contract.

   Selecting PeopleSoft Contracts as your revenue manager provides you with a high degree of control over the revenue recognition process. Revenue plans are required to generate revenue for a contract line.

   You can predefine templates and associate them with a product ID to have the system automatically create revenue plans and associate them with contract lines.

10. Manage milestones.

    Milestones are events in the life of the contract and can be used to control the timing of billing and revenue recognition for amount and rate-based contract lines, award, and incentive fees.

11. Manage billing for each billing plan.

12. Manage revenue recognition for each revenue plan.

13. Manage changes to the contract through amendment processing.

    Amendment processing enables you to change an active contract while keeping a historical record of the original contract and any prior amendments to that contract.