Prime contract budgets overview
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The following types of original budgets can be established in the prime contract and set per job cost code:
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Contract amount
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Cost budgets
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Labor hour budgets
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Equipment hour budgets
Contract amount or guaranteed maximum price (GMP)
Fixed Lump Sum prime contract
Fixed Lump Sum Contracts are common in the construction industry. These agreements specify that a defined scope of work will be completed for a fixed price. The lump sum is paid regardless of whether the work takes more or less time, unless the scope changes. Such changes are handled through a Change Order (CO).
For these contracts, the fixed amount is typically broken down into a list of items called a Schedule of Values (commercial term) or Bank Draws (residential term).
Cost Pus without GMP prime contract
This contract type does not include a contract amount or GMP value. Actual expenses and timecards are imported directly into the Prime Contract Invoice.
Cost Pus with GMP prime contract
Similar to Cost Plus without GMP, expenses and timecards are imported into prime contract invoices. However, the total of all invoices is compared against the GMP value, which represents the maximum contract amount for each cost code combined.
Unit Price prime contract
For Unit Price contracts, the contract amount is only an estimate because invoicing is based on actual quantities placed or excavated in the field. As a result, the final invoiced amount might be higher or lower than the estimated value in the Prime Contract.
Cost budgets
Cost budgets exclude markups, such as fees, and are compared against actual costs such as purchase orders, subcontracts, and timecards. Sage Construction Management provides five built-in resource types, materials, labor, equipment, subcontract, and other, so budgets can be entered for each resource and job cost code. The total budget for a cost code is the sum of its five resource budgets.
Labor hour budgets
Define labor hour budgets only if labor timecards will be entered for the project and job cost code. For example, if the project has 100 cost codes but only 15 apply to labor, set budgets for those 15 codes and leave the remaining codes at zero (0).
Equipment hour budgets
Similar to labor hours, define equipment hour budgets only if equipment timecards will be entered for the project and job cost code.