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Create Prime Contracts

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Objective

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

Background

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. 

Examples

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.

 Tip

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. 

Things to Consider

  • Required User Permissions:
    • To create prime contracts:
      • 'Admin' level permissions on the project's Prime Contracts tool.
        OR
      • 'Read Only' or 'Standard' level permissions on the project's Prime Contracts tool with the 'Create Prime Contracts' granular permission enabled on your permission template.
  • Limitations:
  • Before creating multiple prime contracts on a project, see Are there any system limitations when creating multiple prime contracts?
  • Because prime contract data is sensitive, Procore does NOT send automated email notifications to users or distribution lists. If you need to send a prime contract to another user by email, see Email Prime Contract.
  • Additional Information:
    • Most general contractors use the project's Budget tool to manage costs and contracts with subcontractors. Access to the Budget tool is typically limited to restrict the client or owner financing the project from seeing the budget. 
    • If your project's budget and prime contract are identical (or if the prime contract is a division-level summary of the budget), you can use your budget to create your prime contract. 
    • You can add multiple line items with the same cost code and cost type assignments. To distinguish between line items, enter a descriptive summary in the Description field.
    • If you do not want to enter a cost code for a line item, you can enter 'None.'

Prerequisites

Steps

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

After you have created one or more prime contracts, continue with Update the Schedule of Values on a Prime Contract.

Create a Single Prime Contract

  1. Navigate to the project's Prime Contracts tool.
  2. Click the Create button.

    create-a-single-prime-contract.png
     
  3. In the General tab, under General Information, do the following:
     Note
    • There are no required fields when creating a new prime contract.
    • If you click the Create button without completing any data entry, Procore saves the prime contract, lists you as its creator and places it in the Draft status.
    • Sign with DocuSign©
      If the Procore + DocuSign© integration is enabled, a checkmark appears by default. Clear the checkmark from the box if you do NOT want to collect signatures with DocuSign©. 
    • Contract #
      Accept the default contract number, enter a new number for this contract or create a custom numbering scheme for this contract and future contracts.
       Note
      • If you plan to create multiple prime contracts, Procore automatically assigns new contract numbers in sequential order. For example; 1, 2, 3 and so on. 
      • To use a custom numbering scheme, enter any set of alphanumeric characters and Procore automatically assigns new contract numbers in sequential order using your custom scheme. For example, enter PC-1, PC-01 or PC-001. 
    • Title
      Enter a descriptive name for the prime contract.
    • Owner/Client
      Select the project owner/client from the drop-down list.
    • Architect/Engineer
      Select the lead architect for the project from the drop-down list.
    • Contractor
      Enter the company name of the primary contractor managing the construction project. If you are setting up the prime contract, this will typically be your company's name. 
    • Status
      Select the current status for the prime contract. Options include Draft, Out for Tender, Out for Signature, Approved, Complete, or Terminated.
      Note:       To create change orders and invoices, a prime 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.
    • Make this Visible Only to Administrators and the Following Users
      Place a mark in this check box to limit visibility to users with 'Admin' permission and any users designated in the 'Allow These Users to See SOV Items' checkbox.
    • Allow These Users to See SOV Items
      Mark this check box and use the 'Select a Person' drop-down list to select any project users with 'Read Only' or 'Standard' level permissions on the Prime Contracts tool.
    • Default Retainage. Enter a percentage to represent the retainage amount for your contract's SOV line items. For example, enter: 10%
    • Description
      Enter a more detailed description of your prime contract.
    • Attachments
      Attach any relevant files to your prime contract. For example, you might want to attach a digital copy of your signed prime contract.
  4. Under Contract Dates, do the following:
     Note
    An asterisk (*) below denotes a field that may be configured to show or hide in your project environment. For instructions, see Configure Settings: Prime Contracts.
    • Date Created
      Shows the date the contract was created. You cannot change this date.
    • 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 Prime Contract Change Order (PCCO) when each change order is 'Approved.'
    • Actual Completion Date
      Select the construction project's actual completion date.
    • Contract Date*
      Select the date from the calendar control. This represents the effective date of the contractual agreement. This is the date the contract goes into force. 
    • Signed Contract Received Date
      Select the date from the calendar control. This represents the date that the executed contract was received.
    • Execution Date*
      Select the date from the calendar control. This represents the date the agreement was signed by all parties. 
    • Issued On Date*
      Select the date from the calendar control. This date represents the date the contractual agreement was issued to both parties.
    • Returned Date
      Select the date from the calendar control. 
    • 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 prime where all parties have met all contractual obligations and terms.
  5. Under Additional Information, do the following:
    • Inclusions. Specify any agreed-upon inclusions in the contract.
    • Exclusions. Specify any agreed-upon exclusions in the contract. 
  6. Choose from these options:
    • If you have not yet created the contract, click Create or Create & Email.
      OR
    • If you are updating an existing contract, click Save or Save & Email.

Create Multiple Prime Contracts

 Important
If you want to create multiple prime contracts on a project, see What are the limitations when creating multiple prime contracts? 

You can repeat the steps above for each prime contract that you want to create in the project's Prime Contracts tool. See Create a Single Prime Contract. 

 Note

Reasons to create multiple prime contracts include:

  • There are multiple entities funding the job. Your project may have multiple owners or the general contractor might be partially funding the job themselves.
  • There are contracts established for each stage of construction: pre-construction, course of construction and aftercare/maintenance.
  • When operating a fast-tracked or phased GMP contract, a prime contract can be created for each established scope-of-work package.
  • A contractor who is operating as a CMa and needs to manage the contracts that an owner has with various contractors on a project.

 

If you would like to learn more about Procore’s prime contract software and how it can help your business, please visit our construction contract management software product page here.