Creating Cost-Plus Government Contracts

To define a contract with cost-plus functionality, complete the following steps:

Determine if you are calculating billing and revenue for your cost-plus contract lines using different rates.

If so, select the Separate Billing and Revenue option on the Installation Options-Contracts page. This selection provides a default for the contracts business unit which in turn provides a default for the contract.
Define a new contract with a contract classification of Government.

A contract must be assigned a contract classification of Government to have access to the government contracts and cost-plus functionality.
Add rate-based contract lines to the contract that are assigned a fee type of Fixed, Award, Incentive or Other.

Cost-plus contract lines are represented as rate-based contract lines assigned a fee type. After you assign a fee type to the contract line, the system automatically generates the pages and fields specific to that fee type used in processing direct and indirect costs and fees.
Enter the awarded, funded, and revenue contract line amounts for billing and revenue, as well as billing and revenue fee amounts.

Enter these amounts on the Contract Amounts page for each contract lines. These amounts represent limits for billing and revenue and are also used in fee calculations by the fee worksheets for each contract line. You can also enter the period of performance dates to control limits and bill processing on this page.
Assign projects and activities to the contract lines.

PeopleSoft Contracts uses the projects and activities in PeopleSoft Project Costing to track and calculate costs associated with the contract lines and to calculate fees. You must assign at least one project and activity combination to the contract line.
Define and assign a rate plan to the contract line.

Rate plans consist of a grouping of rate sets used to price transactions that occur against the contract line. Cost-plus contract lines require that you calculate direct and indirect costs. To manage this complex pricing scenario, you must define costing, billing, and optionally revenue rate sets and then group them together onto one rate plan. Revenue rate sets are available when the contract separates billing and revenue. See PeopleSoft Contracts: Update Separate Billing and Revenue Options Page.

As only one rate set or rate plan can be assigned to a contract line at any one point in time, you must assign rate plans to cost-plus contract lines to enable you to calculate the project transaction costs and then bill and recognize revenue for those expenses. You can define a standard set of rates and assign them to your contract lines, or you can define rates that are specific to the contract that you are creating.
Define revenue and billing plans and assign them to the contact lines.

To bill and recognize revenue for your cost-plus contract lines and associated fees, you must define billing and revenue plans using the as-incurred revenue method and assign them to your contract lines. Cost-plus contact lines must be assigned to their own unique billing and revenue plans and must use the as-incurred billing and revenue method.

You can set up and assign billing and revenue plans for your cost-plus contract lines manually, or automatically using billing/revenue plan templates. No matter which method that you use, when the billing and revenue plans are assigned to the contract lines, the system automatically creates a billing and revenue worksheet that is specific to the fee type.

Note:

If the contract does not separate billing and revenue, the system will not generate a revenue worksheet, and all fields related to defining separate revenue amounts and fee data is hidden. However, you still must define a revenue plan to process revenue accounting entries for the contract line.

After you have completed all of your contract specific setup, you can begin processing transactions against the contract lines and generate invoices and revenue accounting entries for your contract lines and fees.