TECH TIP

JANUARY 2015

CONTRACT MANAGEMENT

TRACKING PROJECT FUNDING IN PRIMAVERA CONTRACT MANAGEMENT

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An often overlooked feature, Primavera Contract Management can be configured to track not only project budgets and commitments, but also track project funding.

If we look at the example above, a project was FUNDED for $11 Million, but actual BUDGET for work to proceed was authorized for $8 Million, of which $5 Million has been actually contracted or “committed”.

In PCM this simply requires the project settings to enable the funding component.

 

Setup for Fund Tracking

  1. In Project Settings for this project, Cost Options tab, check the “Show Funding Cost Worksheet Section”. Be sure to click the SAVE button to save this change.
  1. In Contract Information, you will now see three “Contracts” entries—Budget, Commitment and Funding.
  1. In Contracts, Funding create your contract entry for the Funded amount ($11 Million).
  2. In Contracts, Budget, create your contract entry for the authorized Budget ($8 Million).
  3. In Contracts, Commitment, create your actual contract commitments ($5 Million).
  4. In the Cost Worksheet, you can customize the layout to include all three components and see these values in a simple spreadsheet.

How to track Changes to Funding/Budget/Commitment

 

Look at the illustration below.  Budget and Commitments would use the Change Management Module in PCM to track all of these changes.  Funding Contracts would use the Trends Log to record an adjustment to the Funding amount.

  1. Use Change Management for Budget and Commitment Changes.
  2. Use Trends for Funding Changes.

In this example, one Cost Account was given a funded amount of $500,000, but only authorized for $450,000.  You would still use all three Contracts—Funding, Budget and Commitment.  However, in the Funding contract, you would record the authorized amount as an Invoice.  You will now be able to compare that amount to commitments and their invoices.

Cost Codes

One last note is that all of these examples presume that you are using a defined cost code structure that spans all three components (funding/budget/commitment).  Failure to use the same cost code structure could result in mis-matches of your data.

Funding for multiple projects

PCM tracks all costs at a PROJECT level, so tracking funding amounts that span multiple projects at the simplest level would mean the funding amount for each project would be entered in the Funding contract for that project.  The “Total” funding amount, then, would ONLY be visible from a multi-project report that sums up the funded amounts.

There are other approaches for multi-project tracking, but are not included in this brief tip.