A prime 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 prime contractor, main contractor or general 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 prime contracts for each new construction project.
When to Create a Single Prime Contract
Most Procore customers who manage their construction projects in Procore create a single prime contract for a single construction project. If you are a general contractor, creating a single prime 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 Prime Contracts
If a project has multiple owners, multiple funding sources and/or multiple project delivery methods, you can also choose to create multiple prime contracts for a single project. If you choose to create multiple prime contracts in a single Procore project, there are some limitations. For details, see Are there any system limitations when projects have multiple prime contracts? Reasons for choosing to create multiple prime 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: Prime Contracts.
- Multiple Stages. A project can be portioned into stages. For example, you might require separate prime 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 prime 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 prime contracts for each established scope-of-work package.
- Construction Manager as Advisor (CMa) Delivery Methods. A general contractor operating as a CMa might need to manage multiple prime contracts between an owner and various contractors.
After you create a prime contract, you can then update its Schedule of Values (SOV). For details, see Update the Schedule of Values (SOV) on a Prime Contract.
Is your project's prime contract SOV similar to the line items on your project's budget? If so, Procore recommends creating the project's budget before the prime contract. This allows you to use the Prime Contracts tool's import features to quickly Create the Prime Contract SOV from the Project Budget which eliminates repetitive data entry.
Yes. When using the Prime Contracts tool to create multiple prime contracts on a single construction project, please be aware of these limitations:
- While you can import budget line items to a Prime Contract's Schedule of Values (SOV), you do NOT have the ability to choose which budget line items that you want to import
Please be aware that you must import all of a budget's line items to each prime contract. Because most customers with multiple prime contracts typically only want to import certain line items from their budget, use caution before using the project budget to create your prime contract's SOVs (see Create a Prime Contract SOV from the Project Budget). Doing so can lead to a need to delete the unwanted line items from each prime contract's SOV. To avoid this extra step, Procore recommends that you choose a different method to add line items to the prime contract's SOV. For more information, see Update the Schedule of Values on a Prime Contract.
- You will be limited to one (1) set of granular permissions for each project
Procore does NOT support the creation of unique granular permissions for each contract on a project. See Grant Granular Permissions in a Permission Template.
- You will NOT be able to sort, add filters or group report data from the Prime Contract tool in other tools
You will NOT be able to sort change events by each prime contract in the Change Events list page. To workaround this limitation, Procore recommends building a custom project report to show financial data that is sorted, filtered or grouped by it's respective prime contract. See Create a Custom Project Report.
- You will NOT have the ability to map your commitments or automatically complete cost data
You will not be able to map purchase orders and subcontracts to more than one prime contracts. The system will also be restricted from automatically completing cost data. If the same cost code & cost type combination is used on more than one (1) prime contract, the system will not be able to automatically complete the direct cost amount and/or subcontractor invoice amount to your owner invoice. To avoid this limitation, you can create a unique billing period or sub job for each prime contract.