There are 2 reasons for this :
1. The contract type is Rate Contract- 
There is one checkbox called "Rate Contract" in contract screen. In this type of contract bills don't get generated automatically. In fact user has to click on "Create Service Billing" button then services and bills get generated.
OR
2. The contract type is Generate Service wise Billing- 
There is one checkbox called "Generate Service wise Billing" in contract screen. In this type of contract bills don't get generated automatically. In fact user has to complete service(s) first and then bills get generated.