Tracking a not-to-exceed service contract: what to watch each month
A not-to-exceed contract sets a ceiling, not a payment. What the agency receives depends on what it delivers and bills. Watching a few numbers each month keeps both underspending and overbilling from becoming a surprise.
Each month
- Billed to date against the contract value, and against how much of the term has passed.
- Projected landing: billed to date + average monthly billing × months remaining.
- Each service line or budget category against its own cap: a contract can be on pace overall while one line runs out early.
- Months delivered but not yet invoiced, so they are billed before the funder’s deadline.
- Invoices sent but unpaid, and for how long.
When something changes
- Amendments: a new contract value, end date, rate or service. Projections should use the amended terms from their effective date.
- Rate changes partway through the year, which change both billing and the census needed.
- A new fiscal year’s purchase order, which invoices must cite.
Toward the end
- Notice periods for renewal or option years, often 60 or 90 days before the contract ends.
- Final invoices and closeout reports, usually due a set number of days after the end.
- Payments still owed after the contract ends.
How ContractPlan helps
ContractPlan keeps each contract’s terms, amendments, invoices and payments together, flags what needs attention first, and gives the director and board the whole portfolio on one page.
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