Create a Subcontract
Objective
To create a subcontract using the project's Commitments tool.
Background
Things to Consider
- Required User Permission:
- 'Admin' permission on the project's Commitments tool.
OR - 'Read Only' or 'Standard' permission on the project's Commitments tool with the 'Create Subcontract' granular permission enabled on your permission template.
- 'Admin' permission on the project's Commitments tool.
- 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.
- Subcontracts can be transitioned into a Change Order (for 1-tier Change Orders) or into a Potential Change Order (for 3-tier Change Orders). See What are the different change order tiers?
- You can create a Potential Change Order for a subcontract only when it is in the 'Approved' status.
- To learn how to set the accounting method, see How do I set the accounting method for a commitment or prime contract?
Steps
- Navigate to the project's Commitments tool.
- Click +Create and select Create Subcontract.
- Under General Information, do the following:
- #. Leave the system's default commitment number or type over the existing value to customize the numbering scheme for your project's subcontracts. 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 Contacts 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 purchase order, any users added here will be added to the 'Private' list. You must select a 'Contract Company' before you can select invoice contacts.
- Status. Specify the status of the commitment.
Note: These statuses reflect the budget in the ways listed above for the Procore Standard Budget View. To create or modify views, Set up a New Budget View.- Draft. This is the default status when you create a commitment.
- Out for Tender. Indicates the subcontractor is out for tender. Subcontracts in this status are NOT reflected in the project's Budget tool.
- Out for Signature. Indicates the subcontractor is out for signing. Subcontracts in this status are NOT reflected in the project's Budget tool.
- Approved. Indicates the subcontract has been approved. Subcontracts in this status are reflected in the project's Budget tool.
- Complete. Indicates the subcontract has been approved. Subcontracts in this status are reflected in the project's Budget tool.
- Terminated. Indicates the subcontract and the agreement has been terminated. Subcontracts in this status are NOT reflected in the project's Budget tool. This status should only be applied when the subcontractor has NOT performed any work on the project.
- Void. Indicates the subcontract is no longer valid. Subcontracts in this status are NOT reflected in the project's Budget tool.
- Executed. Place a mark in 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. By default, a mark appears in the Make This Visible Only to Administrators and the Following Users checkbox. This means the commitment is only visible to users with 'Admin' permissions on the Commitments tool and any users specified by the following privacy option:
- Select a Person. Select one (1) or more users from the list. The users listed here have been granted 'Read-Only' permissions or higher on the Commitments tool. See Manage Permission Templates.
- Allow These Users to See SOV Items. If you place a checkmark in this box, the selected users are also granted 'Read-Only' access to view the commitment's SOV line items.
- Default Retainage. Specify the percent of payment retainage that will be withheld. For example: 5
- Description. Provide additional information, as necessary.
- Contract Dates:
- 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.
- Additional Information:
- 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.
- Attachments. Attach any related materials such as pricing quotes, receipts, signed purchase orders, etc. You may attach files that have been uploaded to your project or drag and drop files from your local computer.
- Click Save.
Notes:- Typically, you will use the Create option instead of the Create & Email option because you may still need to add items in the SOV.
- If you want to create the subcontract and then go directly to the page where you will enter a schedule of values, click the Create & Enter SOV button.
- Click Schedule of Values.
Notes:- To change the accounting method for the commitment before adding SOV line items, see Edit the Advanced Settings Tab on a Commitment.
- To learn more about accounting methods, see How do I set the accounting method for a commitment or prime contract?
- Click Edit.
- Add all related line items.
Note: If you want to import these fields from a CSV, skip to the instructions for Import from a CSV below.- Prime Contract Line Item. If you do not have the Change Events tool enabled, select the related line item from your Prime Contract. If the item is not accounted for in the Prime Contract, select the "Non Budgeted" option.
- Sub Jobs. Any sub jobs on the project that you have synced will appear in this drop-down. All cost codes related to the sub jobs will appear in the following field. If your company is using the Procore + ERP Integrations tool, see Which integrated ERP systems support the 'Sub Job' concept?
- Cost Code. Select the appropriate cost code for the item. (for example, select 02-200 - Earthwork)
- Tax Code. Enter a tax code to use for this line item.
Note: This field only appears if you have enabled the tax codes feature. See How can I use tax codes on a project? - Description. Enter a brief description about the line item.
- Type. Select the appropriate item type from the drop-down menu. (for example, Labour or Subcontractor)
- Amount. Specify the cost of the line item.
- Click the add icon (+).
Notes:- If the budget code consists of an unbudgeted cost code, cost type, sub job combination, a pop-up message appears to ask you if you want to add this line item to your project's budget.
- If you click OK the line item is added to the Budget with a question mark (?) icon next to it, to indicate it is an unbudgeted cost code, cost type, sub job combination. See Add a Partial Budget Line Item.
- Add additional line items, as necessary.
- Click Save.
Note: When you are ready to forward the subcontract to the subcontracting company, click Email Contract. Be sure to change the status of the commitment, as necessary, to keep it up-to-date.
See Also
- Grant Granular Permissions in a Permission Template
- Add a Company to the Project Directory
- Award a Winning Tender and Convert it into a Subcontract
- Set up a New Budget View
- How do I set the accounting method for a commitment or prime contract?
- Add a Partial Budget Line Item
- Edit the Advanced Settings Tab on a Commitment
- Which integrated ERP systems support the 'Sub Job' concept?
- Send a Commitment to ERP Integrations for Accounting Acceptance
- Re-send a Rejected Commitment to ERP Integrations for Accounting Acceptance