Using upstream contracts

This functionality is available to organizations with the project controls license (i.e. with the cost worksheet)

Managing and controlling contract changes is one of the major challenges of post-award contract and subcontract management, requiring extensive process integration and communication. 

The integrated solution can be used by owners, general contractors, and subcontractors to:

• Manage and report on both the budget and cost side of changes.
• Track the upstream and downstream contract change amounts to ensure both sides are captured.
• Use upstream contracts to establish and manage the approved budget on the cost worksheet.
• Use the upstream contract data to support revenue and profit calculations.

A representation of how upstream contracts link to other parts of cost is shown below.

Upstream Contracts

Several changes have been made to the upstream contract screens, including the contract register, contract changes, and payment applications.

• Upstream contracts now have a control account and control element field for both the contract and pay items. These fields work in a similar way to downstream contracts.
• Upstream contract change events have an option “ETC increase” which controls whether the estimate to complete (also known as forecast cost to complete) is increased by the change amount. This is mirrored behavior of the “ETC drawdown” feature in downstream contract changes.
• Existing upstream contracts have been given an “Unassigned” value meaning the data will not appear on the cost worksheet.

Note: We recommend keeping the unassigned value on existing projects to avoid double-counting upstream values. New or recently started projects can use the upstream control account assignments.

For more information see: Get started with Contracts

Cost Worksheet

The cost worksheet has been expanded to show the additional upstream contract data with a new option for how the approved budget operates.

• Several new columns were added to the cost worksheet and control element grids i.e. original upstream contract, current upstream contract, approved upstream contract actuals, etc. All the new columns have ‘upstream’ in the name and show upstream contract data based on the contract, change, or payment application status.
• A new ‘budget method’ field has been added to control accounts and control elements. The budget method option controls whether the approved budget equals the baseline budget + approved changes (i.e. the existing behavior), or alternatively, the approved budget can equal the value of linked upstream contracts. The budget method can be set at either the control account or element level, like the forecast method.

For more information see: Cost Worksheet Calculations

Change Events

Change events have been updated to support links to upstream contracts in multiple places. Upstream contracts relate to the budget change and downstream contracts relate to the cost change. Both can be updated on a single change event item.

• The add change event wizard includes a step to select affected upstream contracts.
• A new add change event item wizard has been released to make it easier to add items with all the required data, including upstream contracts and budget transfers.
• The edit change event item dialog has been updated with the new functionality.
• An option when adding change event items ‘add from upstream contract change’ has been added, this behaves like the ‘add from downstream contract change’ feature.
• The ‘add to contract change’ and ‘update contract change’ wizards have been expanded to include upstream contracts. 

For more information see: What are Change Events?