Specialty Contractor Financial Management User Guide

Next, start learning about Procore's change management tools. You can create two types of change orders in Procore. There are two options for setting up these tools: (1) Change Orders with Change Events or, (2) Change Orders without Change Events.

Change Orders with Change Events

Creating a change event allows you to prepare for the impact of the change before it becomes an actual cost - which is an important part of a specialty contractor's contract management strategy when hiring outside subcontractors to perform tasks.

After creating a change event, you can then create an RFQ (Request for Quote), which is sent to the appropriate subcontractors for pricing. When RFQs are created and responded to by the assigned subcontractors, change orders can then be created based upon the submitted quote.

• Configure Your Change Order Tier Settings. You can choose between a one (1)-, two (2)-, and three (3)-tier change order setting. Each tier adds a layer to your team's overall change management workflow. A lower number of tiers offers the most straightforward workflow. An increased number of tiers provides your team with a more complex workflow but gives your team more control over changes. The most common settings among Procore users are to use the one (1) or two (2) tier setting.

  Example

  A common example of a client contract (2) tier use case is when you want to mimic your general contractor's bundling of change orders in your Procore account. If you tend to issue change orders immediately and bill for them on a one-by-one basis (regardless of the approval bundle), a (1) tier change order setting might be the better choice. To learn more, see What are the different change order tiers?

  Once you've decided which tier setting to use, you can continue to Configure the Number of Client Contract Change Order Tiers and Configure the Number of Commitment Change Order Tiers.

• Create Change Events. On a construction project, a change event is any change that affects (or potentially affects), the original scope of a construction project. There are numerous ways to create change events in Procore. In addition to using the Change Events tool (see Create a Change Event), you can also use any of the options available in supported Procore tools or using Procore's mobile platform. For details on those options, see Which Procore tools can I use to create a change event?

• Create RFQs from Change Events and Review RFQ Responses. If you need to create an RFQ for your subcontractors to submit pricing, see Create RFQs from a Change Event. You can then review your subcontractor's quotes to determine if you want to move ahead with creating a change order. See Review RFQ Responses.

• Create Change Orders. You can create two types of changes orders in Procore:

  • A Commitment Change Order (CCO) can be created before or after an RFQ response is submitted. See Create a CCO from a Change Event.

  • A Potential Change Order (PCO) can be created before or after an RFQ response is submitted. See Create a PCO From a Change Event.

To learn what else you can do with the Change Events tool, see Change Events.

Change Orders without Change Events

When the Change Events tool is disabled, your team will create changes using the Commitments and Client Contracts tools. Most change orders start with a potential change order which would be generated in the Client Contracts tool. Below is a description of the process when all three (3) tiers are enabled for client contract change orders.

• Create a Potential Change Order. Create a potential change order to outline any potential change in costs that would affect the contract. When you fill out a Schedule of Values (SOV) for a potential change order, you'll have the option to select a budget code and enter the dollar amount. Ideally, it will be a budget code already in the budget, so you can see the budget increase on the Budget tab. See Create a Potential Change Order for a Client Contract.

• Create a Commitment Change Order. After creating a potential change order, you can create a commitment change order that acts as a request for pricing from the subcontractor who will be responsible for the scope of work outlined in the potential change order. You can compare the commitment change order to the corresponding potential change order and view your variance between the two. See Create a Commitment Change Order From a Potential Change Order.

• Create a Change Order Request. After you've created potential change orders, you can roll them into change order requests. Change order requests are typically the documents that are submitted for approval, and can be used for submitting either individual potential change orders, or for grouping potential change orders in order to streamline the review and approval process. See Create a Change Order Request for a Client Contract.

• Create a Client Contract Change Order. Change orders with a status set to 'Pending' will appear in the 'Pending Budget Changes' column of the project's Budget tool. Approved CCCOs can be added to owner invoices. Once you have marked the client contract change order as approved, the total dollar amount change will be reflected in the 'Approved COs' column on the Budget tool. See Create a Client Contract Change Order.

• Create a Commitment Change Order. A commitment change order outlines variations in costs that affect the contract between the contracting company and a vendor or subcontractor. Once you have marked the commitment change order as approved, the dollar change will be reflected in the 'Committed Costs' column on the Budget tool. Commitments and Potential commitment change orders with a status of 'Pending' will show up in the 'Pending Cost Changes' column on the Budget tool. See Create a Commitment Change Order.

To learn what else you can do with the Change Orders tool, see Change Orders.