Purpose

This Instructional Memorandum (IM) prescribes the billing terms required to be included on all reimbursable agreements. Additionally, the IM expands the requirement to use Federal Financial System (FFS)-generated billings for non-Federal agreements when applicable.

Background

As a means of improving the billing process in FY 2004, USGS’s Cost Centers and Fiscal Services offices began to establish new agreements with Federal customers using PCBILL. PCBILL, an automated feature of FFS, is used to facilitate the timely billing of reimbursable agreements. Through PCBILL, FFS generates bills on the appropriate schedule (i.e., monthly, quarterly, semi-annually and annually) based on costs (i.e., expenditures and burden) incurred since the last bill. USGS already uses PCBILL for most reimbursable agreements that involve Biological Resources Cost Centers. On August 6, 2004, IM APS 2004 – 13 was issued, requiring the use of PCBILL for most new agreements with Federal customers.

Policy

Billing Terms: USGS’s goal is to develop consistent billing practices that permit recovery of unbilled amounts as costs are incurred. In addition, USGS will need to reduce the balance of unbilled amounts prior to the conversion of its open reimbursable agreements to the new Financial and Business Management System (FBMS) at the end of FY 2008.

Therefore,

• Beginning August 1, 2005, all new reimbursable agreements will include specific billing terms that require USGS to bill, at a minimum, costs incurred on a monthly, quarterly, semi-annual, or annual basis. The “end of project” or “upon delivery” billing cycles will no longer be allowed for reimbursable agreements.

The billing terms noted above (i.e., bill at a minimum, costs incurred on a monthly, quarterly, semi-annual, or annual basis) are also required for reimbursable agreements where USGS delivers a product or service to a customer for a set fee regardless of the actual costs incurred* . However, customers may include provisions to holdback or retain final payment of the agreement until delivery of the final product. Effective immediately, the holdback percentage for existing agreements may not exceed 20 percent of the total agreement and must be clearly identifiable in the agreement.

• Beginning August 1, 2006, all new reimbursable agreements over $25,000 must include billing terms requiring that USGS bill costs incurred no less frequently than quarterly.

• Effective October 1, 2007, the amount of the holdback or retainage may not exceed 10 percent of the total new agreement amount. Cost Centers are encouraged to notify customers now of the impending change required for all agreements in order to move toward the 10 percent holdback in a timely manner.

PCBILL: USGS’s Cost Centers and Fiscal Services offices are required when applicable to establish reimbursable agreements with Federal and non-Federal customers in FFS through BASIS+ to use PCBILL.

Applicability

The PCBILL requirement applies to:

• All Federal reimbursable agreements that accept automated bills through the IPAC system; and,

• Effective August 1, 2005, all new non-Federal reimbursable agreements that allow bills to be issued automatically as costs are incurred in accordance with the monthly, quarterly, semi-annual and annual FFS PCAS Billing Schedules.

• Effective October 1, 2005 the PCBILL requirement also applies to all existing non-Federal reimbursable agreements currently billed manually that allow bills to be issued as costs are incurred in accordance with the monthly, quarterly, semi-annual and annual FFS PCAS Billing Schedule.

In order to maximize the use of PCBILL, Cost Centers are encouraged to adopt the FFS PCAS Billing Schedule dates when they enter into or modify existing agreements. The FFS PCAS Billing Schedule can be found at the following website:

http://internal.usgs.gov/ops/finance/ffs/pcasbilling-fundsplitadj-schedule-fy05-feb05.doc

The Office of Accounting and Financial Management and Office of Fiscal Services have updated the PCBILL procedures to be used for Federal and non-Federal agreements.

The updated PCBIIL procedures to follow in setting up and managing both Federal and non-Federal agreements with PCBILL are found at the following website:

http://internal.usgs.gov/ops/finance/arb/pcbill-procedure-instructions-3-18-05.doc

The procedures were issued under a procedural memorandum from the Office of Fiscal Services and will be included in the Financial Operating Procedures Handbook under development for future distribution in FY 2005.

____________________________________________
Karen Baker for Carol F. Aten
Chief, Office of Administrative Policy and Services
August 3, 2005

*USGS’s principal, but not sole authority for providing goods and services to other Federal agencies is the Economy Act (31 U.S.C. 1535). Payments for goods and services provided under the Economy Act must be based on the actual cost of goods and services provided or the average cost when providing stream gauging services. In order to avoid augmenting a Federal agency’s appropriation, a Federal agency operating under the Economy Act may not charge either more or less than the actual cost of goods or services provided to another Federal agency. In other words, a Federal agency operating under the Economy Act may not incur either a profit or loss when providing goods or services to another Federal agency. Agreements with other Federal agencies under the Economy Act are, therefore, truly reimbursable