Construction Management At-Risk (CMAR) projects are considered open-book and changes can be made directly to the SOV. As such, the allocation of the budget is the same as the allocation of the SOV. Combining the two, by linking the budget directly to the SOV, will save time with these types of projects. This is accomplished by linking project cost codes directly to lines on the SOV. Budget changes and adjustments will now automatically flow from the budget to the SOV.
Setting the default company-level preference to link new projects' SOVs to budgets
Your company's default company-level configuration setting will automatically enable the setting to link newly created projects' SOVs to their budgets. However, your system administrators can update the default company-level configuration to leave this option disabled on all newly created projects.
To update the company-level default, navigate to the Configuration Menu > My Company and scroll down to 'Projects Settings'
If the setting is checked, all new projects from that point forward will have the project preference set to Link the SOV to the budget. If you uncheck this company default setting, all new projects from that point forward will not have that preference enabled so the SOV will not be linked to project budgets.
Please note that enabling the 'Link SOV to Budget' feature will directly link your project budgets to your Schedule of Values (SOV). This means any changes or adjustments made to cost codes in your budgets will automatically update your SOV. This can significantly impact how you manage customer progress billing and handle customer changes. Before proceeding, we recommend reviewing the entirety of this article for additional information on how this may impact your processes and workflows.
The setting can be updated on a project-by-project basis in Project Preferences. See below for instructions on how to choose whether to enable the 'Link SOV to Budget' preference for your project.
How to update the 'Link SOV to Budget' project preference
Regardless of the company default setting, each project can be updated via the project preference to enable the 'Link SOV to Budget' preference to use the link SOV to Budget features.
Note: The "Link SOV to Budget" option will be locked if any Customer Billings have been created for the project, and the feature cannot be enabled or disabled while a customer billing exists.
Steps:
Access the project that you will be activating the preference on
Click on the Project Preference button
Scroll down to the Contract section
Check the box for the Link SOV to Budget to activate it
Hover over the tool tip next to the setting to see what may be impacted in your project if you enable the option.
Setting up your Schedule of Values on a "Link SOV to Budget" Project
The Schedule of Values (SOV) can be imported and linked from either the Estimate or Budget. This allows for projects that have a completed estimate or projects that have skipped preconstruction, the option to link the SOV.
Steps:
In the project you want to setup the SOV select the Home button
Click on the Schedule of Values option in the Financial Management section
Click the New button (+)
If adding SOV items manually, select the "Add Schedule of Values" option. Fill out the required fields and click Save to create the item. Note: The "Cost Code(s)" field must be used to connect the SOV item to an active cost code for information to update automatically for the SOV item.
If importing from Estimate or Budget, select either option from the New drop down. Select if the import should be by cost code, cost division. or assembly. Note: Allocating indirect cost and profit options are not available on Link SOV to Budget projects.
Making Budget Adjustments on a "Link SOV to Budget" Project
If the Budget is linked to the Schedule of Values (SOV), any adjustments in the Budget Tab will show up automatically in the SOV. The "Adjustments" column will update with the changes and the "Adjust Value" column will also update to reflect the changes.
For how to make budget adjustments, visit the article below on managing the budget in RedTeam Flex.
Steps:
Complete any budget adjustments in the Budget tab
Click on the Home button
Click the Schedule of Values option
The SOV lines will automatically update showing the Adjustments and Adjusted Value changes. Note: The SOV lines have to be connected to the cost code in the budget that is being adjusted or the information will not update automatically.
Making Change Adjustments on a "Link SOV to Budget" Project
When creating Potential Change Orders (PCO) in projects that have SOV linked to Budget, an additional step has to be completed. On Step 6 "Schedule of Values" the SOV items can be individually added or imported from Step 5 "Estimate" of the change order. Adding SOV items manually will have an added option to "Link to a Contract SOV item", which allows you to select a cost code that already exists in the original SOV or add a new one.
Any SOV items that either are added individually or imported that connect to cost codes that exist in the current SOV, will have the change order information appear automatically. For SOV items that are being connected to new cost codes, the column "Contract SOV" will display "No SOV Linked" or the cost code that the item is linked that exists in original SOV will be listed in the column.
For information on how to create and authorize change order see the article "RedTeam Flex - Manage and Authorize Change Orders"
Progress Billing on a "Link SOV to Budget" Project
Creating a Progress Billing for a Link SOV to Budget project, is the same as a regular project in RedTeam Flex. Once preliminary information is filled out for the billing, further information is available about each Schedule of Values (SOV) item. Clicking on line items in column B Description of Work will open a window about the SOV item. The information provided will include the description, original value, changes, adjustments, the adjusted value, connected cost code, period ending, and percent completed. Updates can be made to the Description of Work and the Original value of the SOV item.
To review the steps in creating a Progress Billing refer to article RedTeam Flex - Manage Customer Billing
Generating the Indicated Outcome Report (IOR)
The Indicated Outcome Report (IOR) can be generated for projects that have linked their SOV to the Budget (CMAR Projects). The report is run from the "Contract" tab of a project. There are options to change the columns displayed, export, and print the report.
To generate the report, users must have the permission ViewIOR active for their role.
Steps:
Open the project that the report will be run for.
The selected project must have the "Link SOV to Budget" option activated to run IOR.
Click on the "Contract" tab.
Click on the "View" button and select "Indicated Outcome Report" from the list.
In the top right corner are options to show or hide columns, print, and export the report.
