Create a Subcontract
Objective
To create a subcontract in Procore using the project's Commitments tool.
Background
Subcontracts can be awarded during both the preconstruction and construction phases of a project and are typically created and tracked in Procore by project management. After a prime contract award, the project manager creates purchase orders and subcontracts for specific trades to secure materials and subcontractor services for a project.
Things to Consider
- Required User Permissions:
- To create a subcontract and see/enter data on the Schedule of Values (SOV) tab:
- 'Admin' level permissions on the project's Commitments tool.
OR - 'Standard' level permissions on the project's Commitments tool and the 'Allow Users to See SOV Items' setting must be enabled and your name must be selected in the 'Select a Person' drop-down list
- 'Admin' level permissions on the project's Commitments tool.
- To create a subcontract only, 'Read Only' or 'Standard' level permissions on the project's Commitments tool with the 'Create Subcontract' granular permission enabled on your permissions template.
- To create a subcontract and see/enter data on the Schedule of Values (SOV) tab:
- Additional Information:
- An alternative way to create a subcontract is to award a winning tender and convert it into a subcontract. See Award a Winning Tender and Convert it into a Subcontract.
- To set the accounting method for the subcontract, see How do I set the accounting method for a commitment or prime contract?
- After creating a subcontract, you have these options for creating change orders:
- If your subcontract is configured for 1-Tier Change Orders. Continue with Create a Commitment Change Order.
- If your subcontract is configured for 2-Tier Change Orders. Ensure the subcontract is in the 'Approved' status and continue with Create a Commitment Potential Change Order from a Change Event.
- If your subcontract is configured for 3-Tier Change Orders. Ensure the subcontract is in the 'Approved' status and continue with Create a Commitment Potential Change Order from a Change Event.
Prerequisites
- Configure Advanced Settings: Commitments
- To use the Procore + DocuSign® integration to request signatures on a contract, see Enable or Disable the DocuSign® Integration on a Procore Project.
Steps
Step 1: Create a Subcontract
- Navigate to the project's Commitments tool.
- Click +Create and select Subcontract from the drop-down menu.
- In the 'General' tab under 'General Information', do the following:
- Sign with DocuSign®
If you have enabled the Procore + DocuSign® integration (see Enable or Disable the DocuSign® Integration on a Procore Project), a checkmark appears in this box by default. If you do NOT want to sign the subcontract with DocuSign®, remove the mark. To learn how to request signatures when the subcontract is ready, see Complete a Commitment Contract with DocuSign®. - #
Enter or validate the unique identifier for the subcontract. If you are creating the first commitment of a project, Procore automatically numbers the commitment in sequential order. For example, SC-01-001, SC-01-002 and so on.Notes
- If your company has implemented the ERP Integrations tool, your integrated ERP system may impose a maximum character limit. See What is the maximum character length for a commitment's 'Number (#)'?
- When a commitment is exported to the Integration by Ryvit, it must have a unique commitment number.
- You can customize the numbering scheme for your project's commitments. To learn more, see How are commitments numbered in Procore?
- Title
Enter a descriptive title for the subcontract.Notes
- If your company has enabled the ERP Integrations tool, be aware that some integrated ERP systems impose character limits on the 'Title' field when data exported from Procore is imported into their system.
- For details about character limits, see What is the maximum character length for a commitment's 'Title'?
- Contract Company
Select the company responsible for completing the work on the subcontract (for example, American Construction Co.).
Notes:- To appear in this list as a selection, add the company to the Project Directory. For details, see Add a Company to the Project Directory or Import Users & Vendors into your Project Level Directory Tool (Procore Imports).
- You must select a contract company before you can name an invoice contact.
- Invoice Contacts
Select one (1) or more employees of the 'Contract Company' to designate as the invoice contact(s). After saving the subcontract, any users added here will be added to the 'Private' list. You must select a 'Contract Company' before you can select invoice contacts. - Status
Assign a status to the subcontract. To learn about the available statuses and which commitment statuses reflect contract amounts in your project's budget, see What are the default commitment statuses in Procore? - Executed. Mark this checkbox to denote that the subcontract was fully signed and executed.
Notes
- Many Procore users choose to place a checkmark in the Executed box when placing the commitment into the 'Approved' or 'Complete' status.
- The time at which your project team places a checkmark in the Executed box should always be aligned with your project's unique business process
- Private
Choose from these options:- Make this visible to only administrators and the following users
Mark this checkbox to limit the visibility of the subcontract to users with 'Admin' on the Commitments tool and users specified in the Select a Person drop-down list. - Allow these users to see SOV items
Mark this checkbox to allow those users selected in the 'Select a Person' drop-down list to see the 'Schedule of Values' tab on the subcontract.Important
When the 'Allow these users to see SOV items' is ON, the 'Schedule of Values' tab is only visible and available to users with 'Admin' level permissions on the project's Commitments tool and the people named in the 'Select a Person' drop-down list. - Select a Person
Select one or more people from the list. You can allow non-Admin level users to view the subcontract, if desired. Additionally, you can allow selected non-Admin users to have read-only access to the individual line items under the SOV tab. See Manage Permission Templates.
- Make this visible to only administrators and the following users
- Default Retainage
Specify the percentage amount of retainage to withhold on the first subcontractor invoice. For example, it is a common practice to enter 5 or 10% in this field.Notes
- The 'Default Retainage' amount set on the subcontract will only affect the amount on the first subcontractor invoice.
- Editing this value after creating the first subcontractor invoice will NOT affect the retainage amount on subsequent invoices.
- In order to set or release the retainage amount on a subsequent invoice, complete the steps in Enable Retainage on a Commitment. Next, use one of these Procore tools to set or release retainage on that invoice:
- Commitments. Set or Release Retainage on a Subcontractor Invoice.
- Invoicing. Set or Release Retainage on a Subcontractor Invoice.
- If you would like to set up retention rules that automatically adjust withheld amounts on your subcontractor invoices, see Enable Sliding Scale Retention Rules on a Commitment's Invoices.
- Description
Provide additional information, as necessary. - Attachments. Attach any related materials such as pricing quotes, receipts, signed purchase orders and so on. You may attach files that have been uploaded to your project or drag and drop files from your local computer.
- Sign with DocuSign®
- Scroll to the Contract Dates section and enter the following:
- Start Date. Select the date when the scope of work will begin on the job site.
- Estimated Completion Date. Select the estimated date of when the scope of work will be finished.
- Signed Contract Received Date. Select the date when the subcontract was officially signed.
- Actual Completion Date. Select the date when the scope of work was deemed complete.
- Scroll to the Additional Information section and enter the following:
- Inclusions. Disclose any inclusions that may not be clearly stated in the related contract documents.
- Exclusions. Disclose any exclusions that may not be clearly stated in the related contract documents.
- Click one (1) of these buttons:
- Create. Click this button to save the new subcontract and return to the 'General' tab in view mode.
- Create & Enter SOV. Click this button to save the new subcontract and jump to the 'Schedule of Values' tab in edit mode. Continue by entering the SOV.
- Complete with DocuSign®. Click this button to complete the subcontract with the DocuSign® integration. See Complete a Commitment Contract with DocuSign®.
Step 2: Enter the Schedule of Values (SOV)
There are two ways to enter the Schedule of Values (SOV) on a subcontract:
Add Line Items to the SOV
Notes
- If your company is using the Procore + Integration by Ryvit integration and your Integration by Ryvit system is configured to use the Calculated Method, Integration by Ryvit will NOT allow the use of Lump Sum (LS) as a unit of measurement.
- If you are using the 'Override Subtotal', you must ONLY input the Subtotal Amount. The Integration by Ryvit integration will then create an 'LS' item in Integration by Ryvit.