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(Beta) Create Head Contracts

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 In Beta
This content is for participants in the Project Financials: Modernised Experience for Head Contracts beta program. 

Objective

To create a single head contract or multiple head contracts for a Procore project. 

Background

A head contract is a formal, legal agreement between a construction project owner and a contractor. In this relationship, the project owner is typically the contracting authority who initiates the agreement, possesses the rights to develop a property and finances the project. The contractor (also called the head contractor, main contractor or head contractor) is hired by the project owner and accepts responsibility and liability for completing the construction project. The contractor also enters into other agreements with subcontractors, called commitments in Procore, in order to complete the project's work. 

If your company has purchased Procore to manage your construction projects, you can create one (1) or more head contracts for each new construction project. 

Examples

When to Create a Single Head Contract

Most Procore customers who manage their construction projects in Procore create a single head contract for a single construction project. If you are a head contractor, creating a single head contract is the simplest way to manage a construction project when it has a single project owner and a single funding source. 

When to Create Multiple Head Contracts

If a project has multiple owners, multiple funding sources, and/or multiple project delivery methods, you can also choose to create multiple head contracts for a single project. If you choose to create multiple head contracts in a single Procore project, there are some limitations. For details, see Are there any system limitations when projects have multiple head contracts? Reasons for choosing to create multiple head contracts include: 

  • Multiple Funding Sources. A project can have multiple owners, each of whom provides an amount of the project funding. For example, a person, a company, a public authority or a combination of all these examples. See Configure Advanced Settings: Head Contracts. 
  • Multiple Stages. A project can be portioned into stages. For example, you might require separate head contracts for pre-construction, course of construction and aftercare/maintenance.
  • Multiple Phases. A project can be portioned into phases. For example, you might require separate head contracts for the foundation, plumbing, HVAC and so on.
  • Guaranteed Maximum Price (GMP) Contracts. A project can be fast-tracked or a phased GMP job. For example, you might require multiple head contracts for each established scope-of-work package.
  • Construction Manager as Advisor (CMa) Delivery Methods. A head contractor operating as a CMa might need to manage multiple head contracts between an owner and various contractors.

After you create a head contract, you can then update its Schedule of Values (SOV). For details, see Update the Schedule of Values on a Head Contract.

 Tip

Is your project's head contract SOV similar to the line items on your project's budget? If so, Procore recommends creating the project's budget before the head contract. This allows you to use the Head Contracts tool's import features to quickly Create the Head Contract SOV from the Project Budget which eliminates repetitive data entry. 

Things to Consider

Prerequisites

Steps

In Procore, you have the option to create a single head contract or multiple head contracts as described below:

Create a Single Head Contract

  1. Navigate to the project's Head Contracts tool.
  2. Choose from these options:
    • If this is the first contract on the project, click Create Head Contract on the 'Create a Head Contract to Get Started' page. 
      OR
    • If you have already created at least one (1) head contract, click Create at the top-right of the page.
      create-a-single-prime-contract.png
  3. Continue with the next steps:

Add the Basic Contract Information

Update the basic contract information as follows:

create-prime-contract-basic.png

 Notes
  • There are no required fields when adding the basic contract information. 
  • If you click the Create button without completing any data entry, Procore saves the head contract, lists you as the creator and automatically places it in the Draft status.
  • Number
    To number your contract(s), choose from these options:
    • If you number your contracts using a sequential numbering system, you can enter any combination of alpha-numeric characters in this box. For subsequent contracts, Procore automatically applies consecutive numbering in ascending order.
      Example

      The examples below show you how Procore's ascending consecutive numbering works:

      • If the previous contract was 1, the next contracts are 2, 3 and so on.
      • If the previous contract was PC-0001, the next contracts are PC-0002, PC-0003 and so on.
      • If the previous contract was DCA00010-12-G-0001, the next contracts are DCA00010-12-G-0002, DCA00010-12-G-0003 and so on.
    • If you do NOT number your contracts using sequential numbering, you can manually enter a unique number for each head contract. To do this, type over the existing entry in the Number box. Duplicate contract numbers are NOT permitted.
  • Contract Company
    Select the name of the company performing the work or supplying materials for this contract. To appear as a list option, see Add a Company to the Project Directory. 
  • Title
    Type a descriptive name for the contract.

Update the General Information on the Head Contract

Update the contract with more general information:

create-prime-contract-general-information.png

  • Status
    Procore automatically assigns contracts the 'Default' status. To select a different status, choose one of the status labels from the drop-down list. Options include Draft, Out for Tender, Out for Signature, Approved, Complete, or Terminated. 
     Note
    To create Head Contract Variations (HCVs) and head contract progress claim, your head contract's status must be set to Approved or Complete.
  • Executed
    Place a mark in this check box if the contract has been fully executed. A fully executed contract is a legally effective agreement that has been signed by authorised representatives for each party.
  • Default Retention
    Enter a number to represent the percentage that will be withheld as retention on the line items of the contract's Schedule of Values. For example, if you plan to withhold ten (10) percent of the line item's value, enter 10%.
  • Contractor 
    Select the 'Contractor' from this drop-down list. This is the company that your team hired to perform the work. To appear as a list option, Add a Company to the Project Directory. 
  • Architect/Engineer
    Select the lead architect or engineer for the project from this drop-down list. To appear as an option in this list, the company must have a record in the Project Directory. 
  • Description
    Enter a more detailed description of the head contract. You can apply the options in the formatting toolbar to your text. 

Update 'Contract Access' for the Head Contract

By default, head contracts are visible to all users with 'Read Only' level permissions or higher on the project's Head Contracts tool. To change its access permissions, do the following on the 'Contract Access' card:

  1. Optional: Move the Restrict This Contract's Visibility to Only Project Admins and Select Non-Admin Users toggle to the left or right to turn the restriction OFF and ON. Procore turns this setting ON by default. 
     Notes
    • The toggle is BLUE when restrictions are turned ON.
    • The toggle is GREY when restrictions are turned OFF.
  2. Optional: To provide users with 'Read-Only' or 'Standard' level permissions on the project's Head Contracts tool with access to the contract, select the person's name from the Access for Non-Admin Users drop-down list. To appear as an option in this list, a user must have a profile in the Project Directory.

    create-prime-contract-contract-access.png
     
  3. Optional: To provide the users in the 'Access for Non-Admin Users' list with access to view the Schedule of Values, mark the Allow These Non-Admin Users to View the SOV Items checkbox. 

Update the Contract Dates for the Head Contract

To update the head contract with important dates, do the following:

prime-contract-contract-dates.png

 Note
Your company's Procore Administrator manages the dates that appear in the 'Contract Dates' section using the configurable fieldsets feature. For details, see Which fields in the Head Contracts tool can be configured as required, optional or hidden?
  • Start Date
    Select the construction project's official start date.
  • Estimated Completion Date
    Select the construction project's estimated completion date from the calendar control. 
  • Substantial Completion Date
    Select the construction project's substantial completion date from the calendar control. 
     Tip
    If the 'Substantial Completion Date' field is available on your project, keep in mind that Procore automatically updates the 'Substantial Completion Date' to match the 'Revised Substantial Completion Date' from each Head Contract Variation (HCV) when each variation is 'Approved.'
  • Actual Completion Date
    Select the construction project's actual completion date.
  • Contract Date
    Select the contract date from the calendar control. 
  • Signed Contract Received Date
    Select the date from the calendar control. The signed contract received represents the date that the executed contract was received.
  • Execution Date
    Select the date from the calendar control. The execution date represents the date the agreement was signed by authorised representatives of all contract parties. 
  • Issued On Date
    Select the date from the calendar control. The issued on date represents the date the contractual agreement was issued to both parties.
  • Returned Date
    Select the date from the calendar control. The returned date is the date the contract was returned.
  • Letter of Intent Date
    Select the Letter of Intent (LOI) date from the calendar control. 
  • Approval Letter Date
    Select the Letter of Approval (LOA) date from the calendar control.
  • Contract Termination Date
    Select the date from the calendar control. A contract termination date is a date outlined in the head where all parties have met all contractual obligations and terms.
  • Delivery Date
    Select the date from the calendar control. 

Add Inclusions and Exclusions to the Head Contract

Contract inclusions and exclusions vary from project to project. However, the intent is to define exactly what is included and NOT included in the contract's price and scope of work. To update the contract's 'Inclusions and Exclusions' card, do the following:
create-prime-contract-inclusions-exclusions.png

  • Inclusions
    Add the contract's inclusions in this box. You can apply the options in the formatting toolbar to your text. 
  • Exclusions
    Add the contract's exclusions in this box. You can apply the options in the formatting toolbar to your text. 

Set the Accounting Method

The first step when updating a Schedule of Values is to define the accounting method for the contract. The method you choose also applies to all variations and/or progress claims for that contract. The accounting method can only be changed BEFORE you add line items to an SOV. Procore does NOT permit you to change a contract's accounting method after line items are added. 

 Tips
  • What's the difference between the Amount Based and Unit/Quantity Based contract? For details, see How do I set the accounting method for a contract or funding?
  • Is the contract's accounting method automatically applied to a contract's change events? No. If you want your team to enter Unit/Quantity amounts on change events, you must mark the 'Display UOM, Revenue Qty, Revenue Unit Cost, ROM Unit Qty and ROM Unit Cost Columns' check box in the Configure Settings page of the Change Events tool. See Configure Settings: Change Events.
  • Is the contract's accounting method automatically applied to a contract's variations and progress claims? Yes. If you choose an Amount based contract, Procore generates Amount based variations and progress claims. Similarly, an Unit/Quantity based contract produces Unit/Quantity Based variations and progress claims.
  • Does a contract's PDF export file reflect the contract's accounting method? Yes. If you choose an Amount based contract, the PDF export file is Amount based. Similarly, an Unit/Quantity based generates a Unit/Quantity Based PDF export file. If you have an Amount based contract and want to include Unit/Quantity information in the PDF export file, your company's Procore Administrator must Request Services from Custom Solutions.
  • To change the accounting method to Unit/Quantity, click the Change to Unit/Quantity button. 
  • To change the accounting method back to Amount-Based, click the Change to Amount Based button. 

Update the Head Contract Schedule of Values

By default, you can input line items on the contract's SOV at any time, as long as the contract is NOT in the 'Approved' status.

 Note
Your project team might choose to enable a contract setting, which permits users with edit permissions to the SOV to make changes on the SOV at any time. To learn about this setting, see What is the 'Enable Always Editable Schedule of Values' setting?
Add Line Items to the Head Contract SOV

To manually add line items to the head contract's SOV:

  1. Choose from these options:
    • If the SOV is blank, click Add Line under 'You Have No Line Items Yet'. 
      OR
    • If you have existing line items, click Add Line. 
      Procore creates new line items starting with the number '1'. Subsequent lines are created in numerical order. 
  2. Designate a budget code for the new line item. You have these options:
    • To assign an existing budget code to the line item, start typing a code in the Search box and select the matching code from the list. 
      OR
    • To create a new budget code for the line item, click the Create Budget Code button. Next, select the appropriate segment items from the drop-down list(s) to satisfy your project's budget code pattern requirements. Then, click Create.
  3. Depending on the accounting method you are using, choose the appropriate steps for adding a line item:
    • For an Amount-Based contract: 
      An Amount-Based SOV requires this data entry:
      • Budget Code
        Select a budget code or click Create Budget Code. See What is a budget code in Procore's WBS? 
      • Description
        Enter a description for the line item. For example, type: Monthly Service Fee
      • Amount
        Enter the total amount for the line item.
      • Billed to Date
        Later, when you create progress claims, this column will automatically show the amount that has already been billed to date. 
      • Amount Remaining
        Later, when you create progress claims, this column will automatically show the amount that has NOT yet been billed to date.
    • For a Unit/Quantity Based contract:
      A Unit/Quantity Based SOV requires this data entry: 
      • Budget Code
        Select a budget code or click Create Budget Code. See What is a budget code in Procore's WBS? 
      • Description
        Enter a description for the line item. For example, type: Monthly Service Fee
      • Qty
        Enter the number of units.
      • UOM
        Select the Unit of Measure (UOM) from the list. See Which units of measure are included on Procore's master list? and Add a Unit of Measure to the Unit of Measure Master List.
      • Unit Cost
        Enter the Unit Cost in this box. You'll notice that the value in this column contains four (4) decimal points (for example, $0.0000) to allow you to enter the specific value required to calculate accurate pricing. 
        Example
        If you are buying 50,000 units for $1,006,625.00, you would enter a unit price of $20.1325. 
      • Amount
        The system automatically calculates the subtotal for you, based on the Qty, UOM, and Unit Cost entries. 
      • Billed to Date
        Later, when you create progress claims, this column will automatically show the amount that has already been billed to date. 
      • Amount Remaining
        Later, when you create progress claims, this column will automatically show the amount that has NOT yet been billed to date.
  4. Optional: Repeat the steps above to add as many line items as needed. 
  5. Click Save. 
    Procore saves the line items on the contract's SOV. 
Import Line Items to the Head Contract SOV from a CSV File
  1. In the 'Schedule of Values' card, click the Import SOV from CSV button. 
    import-sov-from-csv.png
  2. Click the Download CSV Template button and choose one of these options:
    • Blank Template. Click this option to download a blank template. 
      OR
    • Template with Existing Line Items.  Click this option to download a template that includes any existing line item data from your project's budget. 
       Note
      • Procore downloads a CSV template file to your web browser's file download location.
      • The name of the file is: Head Contract SOV Template.csv
  3. Open the template that you downloaded on your computer. 
  4. Enter the data that you want to upload directly into the template. 
     Important
    Do NOT change or rearrange the Column Headings in the template file. 
  5. After entering your line item data, make sure to save your file updates in the 'Comma Separated Values' file format. 
  6. Navigate back to Procore. Then, in the 'CSV File' section, choose one of these options:
    • Click Upload File. 
      OR
    • Use a drag-and-drop operation to move the template you just updated into the 'CSV File' section. 
  7. Choose one of these options:
    • Add Additional Line Items. Choose this option if you want to create new line items using the data in your template.
      OR
    • Replace Existing Line Items. Choose this option if you want to erase any existing line items from the head contract and replace them with data in your template. 
  8. Click Import. 

Attach Files to the Head Contract

To add file attachments to a head contract:

  1. On the 'Attachments' card, click Edit.
  2. Click Attach Files. 
  3. In the 'Attach Files' dialogue box, highlight the location where the files to upload are stored. Options include:
    • My Computer. Click Upload Files to open your computer's finder. Select the files to upload and click Open. 
    • Photos. If the Photos tool is active on the project, choose the location from the Select Album list and then search for the file(s) to upload. 
    • Drawings. If the Drawings tool is active on the project, choose the area from the Select Area list and then search for the file(s) to upload. 
    • Forms. If the Forms tool is active on the project, choose the template from the Select Template list and then search for the file(s) to upload. 
    • Documents. If the Documents tool is active on the project, navigate to the folder storing the file(s) to upload and then highlight them. 
  4. Click Attach. 

    create-prime-contract-attach-files.png

    A progress indicator shows you the status of the upload. 
  5. Click the Close (X) icon on the Attach Files dialogue box.  

Create Multiple Head Contracts

Repeat the steps in Create a Single Head Contract above for each new head contract.

 Caution
There are some important limitations to be aware of before your teams start creating multiple head contracts on a Procore project. For details, you are advised to review What are the limitations when creating multiple head contracts?