How to Create a Prime Contract In Procore

Understanding Prime Contracts in Construction

A prime contract is a legal agreement between two parties: one party finances the construction project while the other completes the work. In construction language, the financier might be the owner, client, or principal; the contractor fulfilling the work is the general contractor (or prime contractor). In Procore, you can create a single prime contract for a project with a single owner or, for more complex projects with multiple funding sources, break the work into several contracts.

Prime contracts serve as the foundation for all financial transactions throughout a project's lifecycle. They establish clear expectations regarding scope, timeline, and budget between the owner and general contractor. Without proper contract management, projects can quickly spiral into confusion with disputed change orders, payment delays, and scope creep.

Procore's Prime Contracts tool centralizes all contract information in one accessible location. This centralization ensures that all stakeholders can view real-time updates to contract values, approved change orders, and payment status. The transparency helps prevent miscommunications that often lead to project delays and budget overruns.

When to Use Single vs. Multiple Contracts

Deciding between a single or multiple prime contracts depends on your project's complexity and funding structure. This decision impacts how you'll track finances and manage communications throughout the project lifecycle.

Single Prime Contract Benefits

Most construction projects operate with a single prime contract when dealing with one owner or funding source. This approach simplifies contract administration and provides a straightforward financial tracking system. Single contracts work best for projects with clear ownership structures and unified decision-making processes.

The main advantage of using a single contract is streamlined communication. With only one contract to reference, all parties understand their responsibilities without confusion about which contract governs which aspect of the project. This clarity extends to change order management and invoicing, making financial tracking more efficient.

Another benefit is simplified reporting. When generating progress reports or financial summaries, having all information under one contract makes data compilation faster and more accurate. This efficiency becomes particularly valuable during owner meetings when quick access to contract information is essential.

Multiple Prime Contracts Applications

For projects with multiple funding sources or distinct project phases, creating separate prime contracts offers better financial control. This approach allows you to isolate costs and track spending against specific budgets or funding allocations.

Multiple contracts become necessary when different owners have varying approval processes or payment terms. For example, a mixed-use development with retail and residential components might have different investors for each section. Separating these into distinct contracts allows for customized management of each relationship.

Before implementing multiple contracts, consult Procore's documentation regarding system limitations. Some reporting features may work differently when managing multiple contracts within a single project. Understanding these constraints before project setup prevents complications during execution.

Prerequisites for Creating Prime Contracts

Proper preparation ensures a smooth contract creation process in Procore. Taking time to verify permissions and tool availability prevents frustrating roadblocks during setup.

The first requirement is ensuring your company has added the Prime Contracts tool to your Procore Project Tools menu. This tool isn't automatically included in all Procore packages, so check with your administrator if you don't see it listed. The tool provides the interface for creating and managing all contract documentation.

Your user account must have appropriate permissions to create contracts. This requires either Admin-level permissions on the Prime Contracts tool or "Read Only"/"Standard" permissions with the granular "Create Prime Contracts" permission enabled. Without these permissions, you'll be able to view contracts but not create new ones.

For companies using electronic signatures, verify that integrations like Procore + DocuSign are properly configured. These integrations streamline the approval process by allowing digital signatures directly within the Procore platform. Setting up these connections before creating contracts prevents delays during the signature collection phase.

Step-by-Step Prime Contract Creation

Creating a prime contract in Procore involves several detailed steps. Following this process ensures all necessary information is captured accurately.

Accessing the Creation Interface

Begin by navigating to your Procore project and locating the Prime Contracts tool in the Project Tools menu. Once inside the tool, click the "Create" button to open the New Prime Contract window. This interface contains multiple sections for entering contract details.

The interface presents a tabbed layout with the General tab displayed by default. This organization helps break down the contract creation process into manageable segments. Take your time with each section to ensure accuracy, as this information forms the foundation of your project's financial management.

Procore saves your progress automatically as you move between tabs, allowing you to complete the contract setup in multiple sessions if needed. This feature proves particularly helpful for complex contracts requiring input from different team members or departments.

Entering General Contract Information

The General Information section captures the core details about your contract. These fields establish the contract's identity within your project management system.

Contract Number: Accept Procore's default sequential numbering or create a custom scheme like "PC-001" or "BLDG-A-2025." Custom numbering helps organize multiple contracts within large projects or across your company's portfolio.

Title: Enter a descriptive name that clearly identifies the contract's purpose. Effective titles reference the project name, building segment, or scope of work covered by the agreement.

Owner/Client: Select the project owner or client from your company's directory. This selection links the contract to the correct stakeholder for communications and approvals.

The remaining fields capture additional stakeholders and status information. The Architect/Engineer field identifies the design professional responsible for project oversight. The Contractor field typically contains your company's name as the general contractor. The Status field tracks the contract's progress through stages like Draft, Out for Signature, and Approved.

Setting Critical Contract Dates

Accurate date tracking ensures everyone understands the project timeline and contractual milestones. Procore uses these dates for scheduling, notifications, and reporting.

The system automatically records the Date Created when you initiate the contract. You'll need to manually enter the Start Date and Estimated Completion Date to establish the project timeline. These dates drive schedule-based reporting and help track progress against contractual obligations.

Additional date fields provide context for contract administration. The Contract Date establishes when the agreement takes effect. The Execution Date records when all parties signed the document. The Substantial Completion Date often triggers warranty periods and final payment milestones.

For contracts with phased deliveries, you can document interim milestones in the Description field. This information helps track progress against contractual obligations and provides context for change orders that might affect the timeline.

Documenting Financial Terms

The financial details section establishes baseline values for contract management. These figures serve as reference points for all future financial transactions.

Default Retainage: Enter the percentage (typically 5-10%) to be withheld from payments until project completion. This value automatically applies to Schedule of Values (SOV) line items unless manually overridden.

The contract value is determined by the Schedule of Values, which you'll create after saving the initial contract information. The SOV breaks down the total contract amount into line items corresponding to different work categories or project phases.

For contracts with special payment terms, document these conditions in the Description field. Examples include milestone payments, early completion bonuses, or liquidated damages for delays. These notes provide important context when processing payment applications.

Creating the Schedule of Values

The Schedule of Values (SOV) breaks down your contract into billable line items. This detailed breakdown forms the foundation for payment applications and financial tracking.

After saving the initial contract information, navigate to the SOV tab to begin creating line items. Each line item represents a portion of the work with its own description, value, and optional cost code. The combined value of all line items equals the total contract amount.

For simple projects, you might create basic line items like "Sitework," "Foundation," and "Framing." More complex projects benefit from detailed breakdowns aligned with construction phases or building systems. The level of detail should match your payment application requirements and financial tracking needs.

Many contractors align their SOV with their project budget structure. This alignment creates consistency between contract management and internal cost tracking. Procore allows you to import SOV line items directly from your project budget, saving time and ensuring consistency between systems.

When creating each line item, consider how you'll track progress. Items representing long-duration activities might benefit from percentage-based billing, while discrete deliverables might use unit-based tracking. The billing method affects how you'll generate payment applications throughout the project.

Managing Contract Documentation

Proper documentation ensures all parties have access to the complete contract package. Procore provides several options for attaching and organizing these documents.

Attaching Critical Files

The Attachments section allows you to upload digital copies of signed contracts, exhibits, and supporting documentation. These attachments create a comprehensive record accessible to authorized team members.

• Upload the executed contract document with signatures
• Include any exhibits or appendices referenced in the main agreement
• Attach relevant specifications or drawings that clarify scope requirements

Proper file naming helps team members quickly locate specific documents. Consider using a consistent naming convention that includes the contract number, document type, and version information. This organization becomes particularly valuable as the project progresses and the document library grows.

Utilizing Electronic Signatures

Companies using the Procore + DocuSign integration can streamline the signature process. This integration eliminates paper handling and accelerates contract execution.

When your contract is ready for signatures, click the DocuSign icon to initiate the electronic signature process. The system guides you through identifying signatories and establishing the signature sequence. Once complete, the fully executed document automatically attaches to the contract record.

Electronic signatures provide several advantages beyond convenience. The system timestamps each signature, creating an audit trail of the approval process. This documentation proves valuable when resolving disputes about when agreements were finalized or changes approved.

For companies operating across multiple locations, electronic signatures eliminate delays caused by shipping physical documents. This efficiency becomes particularly valuable when project timelines are tight or when working with international partners in different time zones.

Effective Change Order Management

Change orders modify the original contract scope, price, or timeline. Procore's structured process ensures these changes are properly documented and approved.

Creating Prime Contract Change Orders

Once your contract reaches Approved status, you can begin creating change orders. Navigate to the specific contract and click on the contract number link. From there, select "Create Prime Contract CO" to initiate a new change order.

Each change order requires basic information including a number, title, status, and due date. The description field should clearly explain the reason for the change and its impact on the project. For changes affecting the schedule, enter the number of days added or subtracted in the Schedule Impact field.

The financial impact appears in the Schedule of Values section. Here you can add new line items or modify existing ones to reflect the change. The system automatically calculates the revised contract amount by adding or subtracting the change order value from the original contract sum.

Tracking Approval Status

Change orders typically require approval from multiple stakeholders. Procore's status tracking helps monitor each change through the approval workflow.

The status options include Draft, Pending, Approved, and Void. As the change order moves through your approval process, update its status to reflect the current state. This visibility helps team members understand which changes are official and which remain under review.

For changes requiring owner approval, use the Email function to send the change order directly from Procore. This approach creates a record of the communication within the system. Once approved, attach the signed authorization to the change order record for complete documentation.

Regular change order reports help keep the project team informed about modifications to the original scope. These reports summarize approved changes, pending requests, and their cumulative impact on the contract value and schedule. This transparency helps prevent surprises during project execution.

Integrating with Other Procore Tools

Procore's power comes from connecting contract information with other project management functions. These integrations create a unified system for managing all aspects of your project.

The Budget tool provides financial oversight by comparing actual costs against contracted amounts. When properly integrated, changes to the prime contract automatically update the corresponding budget items. This synchronization ensures your financial projections always reflect the current contract value.

The Commitments tool manages subcontractor agreements that fulfill portions of your prime contract scope. By linking commitments to specific prime contract line items, you can track how subcontracted work contributes to your overall obligations. This connection helps identify gaps or overlaps in scope coverage.

Payment applications draw directly from the prime contract's Schedule of Values. As work progresses, you can create payment requests based on completion percentages for each line item. The system automatically calculates retainage and tracks previous payments to determine the current amount due.

For companies using Procore's accounting integrations, prime contract information flows seamlessly into financial systems. This connection eliminates duplicate data entry and ensures consistency between project management and accounting records. The result is more accurate financial reporting and simplified audit processes.

Best Practices for Contract Management

Successful contract management extends beyond initial setup. These practices help maintain accuracy and transparency throughout the project lifecycle.

Maintaining Accurate Records

Regular updates ensure your contract information remains current and reliable. Schedule time each week to review and update contract status, dates, and documentation.

Keep change orders current by processing them promptly when scope modifications occur. Delayed documentation creates discrepancies between the work being performed and the contractual requirements. These gaps often lead to payment disputes and strained relationships with owners.

Document all contract-related communications within Procore. Use the Notes function to record phone conversations, meeting decisions, and clarifications about contract requirements. This documentation creates a searchable history that proves invaluable when resolving questions or disputes.

When contract modifications occur, update all related documentation. This includes revising the Schedule of Values, adjusting milestone dates, and modifying budget projections. Comprehensive updates ensure all team members work from the same information.

Optimizing User Permissions

Thoughtful permission settings balance information access with security concerns. Review these settings periodically to ensure they match your team's needs.

Consider creating role-based permission templates for different team functions. Project managers might need full editing capabilities, while field supervisors might only require viewing access to scope information. Superintendents might need change order creation rights without contract modification permissions.

For sensitive financial information, use the "Visible Only to Administrators and the Following Users" option. This restriction limits access to contract values and payment details while still allowing broader team access to scope and timeline information.

When working with joint ventures or collaborative teams, carefully consider how permissions extend to partner organizations. Create clear guidelines about who can view, edit, or approve contract information across organizational boundaries. These boundaries prevent unauthorized changes while facilitating necessary collaboration.

Streamlining Your Contract Workflow

Efficient processes save time and reduce errors in contract management. These strategies help optimize your Procore implementation.

Creating Templates for Repeatability

For companies managing multiple similar projects, contract templates provide consistency and efficiency. Develop standard templates for different project types or client categories.

Templates can include standard Schedule of Values structures, default retainage percentages, and common contract language. When starting a new project, these templates provide a foundation that requires only project-specific modifications rather than building from scratch.

Consider creating standard change order templates for common modifications like weather delays, unforeseen conditions, or owner-requested upgrades. These templates ensure consistent documentation and pricing approaches across your projects.

Automating Notifications and Approvals

Procore's workflow capabilities can automate routine contract management tasks. These automations ensure nothing falls through the cracks during busy project periods.

Configure automatic notifications for contract milestones like substantial completion approaches or retainage release eligibility. These reminders help team members take timely action on contractual requirements.

For change orders, establish approval workflows that route requests to the appropriate decision-makers. These workflows can include sequential approvals from project managers, executives, and finally owners. The system tracks each approval step and maintains a complete audit trail.

When payment applications reach specific thresholds, automatic notifications can alert financial team members to review and process them. This visibility helps maintain cash flow and ensures contractual payment terms are fulfilled.

Mastering Procore's Prime Contracts for Project Success

Creating and managing prime contracts in Procore establishes the foundation for successful project delivery. The system's integrated approach connects contractual obligations with daily project activities, creating transparency and accountability.

The process begins with understanding contract fundamentals and proper setup in Procore. Taking time to enter complete information during creation pays dividends throughout the project lifecycle. The detailed Schedule of Values provides the framework for financial tracking, while comprehensive documentation ensures all stakeholders understand their obligations.

As projects progress, Procore's change management capabilities maintain accuracy despite evolving requirements. The integration with budgeting, commitments, and payment applications creates a unified system that eliminates redundant data entry and provides real-time financial visibility.

For construction professionals seeking to improve contract management, Procore offers a powerful solution that scales from simple projects to complex multi-contract programs. The investment in proper setup and consistent maintenance delivers returns through reduced disputes, improved cash flow, and stronger client relationships.

Take the next step by reviewing your current contract management practices and identifying opportunities to implement these Procore strategies. Whether you're managing your first Procore project or optimizing an established system, these approaches will enhance your contract management effectiveness and contribute to successful project outcomes.