test doc DMS

User Manual

Change Management

!

!

!

!Handouts •Change Management Flow Chart •Cost Options Overview •Price Category Overview •Change Management Field Descriptions •Budget Transfer Instructions •Change Management Copy Function •Printing Change Management Form Instructions (CCD/PCO, Change Notification, SCCO, COR, PCCO) •Printing Change Management Reports Instructions (PCO Summary & Detail, COR Summary, SCCO Summary & Detail) •Sample CCD Form •ZPSPCOHDR (PCO Header Update)Transaction Instructions !

Change Management Reports

Course Objectives: !• Recognize the Change Management process when funding a change from a Contingency or

Owner Source, and tracking an Allowance • Identify the steps in creating External, Internal, and Allowance Potential Change Orders (PCO) • Identify the steps in creating Internal & External Change Order Requests (COR) • Identify the steps in creating Internal & Regular Prime Contract Change Orders (PCCO) • Identify the steps in creating a Subcontractor Change Order (SCCO)

Process Flow: 1. Project mark-ups have been defined 2. PCO is created and modified 3. COR is created and modified 4. PCCO is created 5. SCCO is created

Result: 1. Budget lines are updated to reflect

changes implemented in the change management process !

2. Contract values are updated with new budget projections.

Course Transactions: • ZPSPCO • ZPSCOR • ZPSPCCO • ZPSSCCO

Related Transactions: • ME23N (Display Purchase Order) • ZPSCOReporting (Chg Mgmt Reports) • ZPSBUDVR (Budget Report) • ZPSPCOItems

Issued: 10/09 Revised: 3/21/2012 Page ! of !1 21

User Manual

Change Management

!Change Order Reporting (transaction: ZPSCOREPORTING) is a useful tool to view, sort, filter, and subtotal by any field in a PCO, COR, PCCO, and SCCO. This is a useful tool for finding information like:

o PCOs waiting for quotes from Subcontractors o CORs / PCCOs that have been waiting for Owner signature for more than 30 days o Comparing actual costs for a change to the Approved Budget amount (most useful

for self-perform projects) Various pre-formatted printed reports are also available via ZPSCOREPORTING. Refer to the “Printing Change Management Reports” handout for instructions on printing these reports. !PCO Items (transaction: ZPSPCOItems) is a drill-down of the Approximate, Pending and Approved fields in the Budget Variance Report, Owner Report and Forecasting workbenches. It will show every PCO line item that has been written to a given WBS. No header information is available in this report. !Course Overview This course will discuss the four transactions included in the Change Management process: •Potential Change Order (PCO) •Change Order Request (COR) •Prime Contract Change Order (PCCO) •Subcontractor Change Order (SCCO) !

The Potential Change Order (PCO) process is the first step performed in a series of change management tasks whenever any type of change is introduced to a project. There are three types of PCOs: External (EXT), Internal (INT), and Allowance (ALW), which will be described later in the class. !The Change Order Request (COR) process is used to assemble Potential Change Order (PCO) line items for presentation to the owner. There are two types of CORs: External (EXT) and Internal (INT), which will be described later in the class. !A Prime Contract Change Order (PCCO) is made up of Change Order Requests (CORs) and is used to update the project budget and/or sales contract (schedule of values). There are three types of PCCOs: Internal (INT), Pre-GMP (PRE), and Regular (REG), which will be described later in the class. !A Subcontractor Change Order (SCCO) can be created from one or more Potential Change Order (PCO) line items. The SCCO will update the project commitments and add one line item per PCO line item to the subcontract. !


User Manual

Change Management

!This blank page is provided to jot down Purchase Orders and other document numbers for reference while completing the various Change Management steps. You can remove it from the binder for easy access. !!


User Manual

Change Management

!!


User Manual

Change Management

!Potential Change Order (PCO) Process Overview

The PCO process is used to capture all potential cost changes that may impact the project. Depending on the type of PCO created, the PCO may impact both budget and cost (EXT), just cost (INT), or have no impact (ALW) on either budget or cost. In addition to the impact on budget and cost, the PCO type may also have an impact on the steps necessary to complete the change order process.

Internal PCOs are used for cost-only changes. These are changes that are not funded. Examples: A change that the owner refuses to fund; a change from contingency when there is no contingency left, etc.

Internal PCO line items that are “self-perform” do not impact a subcontract and therefore require no additional processing; these line items may be created and approved within the PCO process.

Internal PCO line items that impact a Subcontractor require the Subcontractor Change Order (SCCO) process in order to complete the approval of a PCO line item.

External PCOs are used for all funded changes. Examples include contingency-funded changes, owner-funded changes, backcharges from one subcontractor to another, and budget transfers. External PCOs are used to move dollars from one budget line to another or to add/deduct from the overall budget.

External PCO line items require the Change Order Request (COR) process and the Prime Contract Change Order (PCCO) process to approve the budget for a line item. It may also require the Subcontractor Change Order (SCCO) process to approve the cost for a line item. The Prime Contract Change Order (PCCO) process is used to update the owner contract and budget. The Subcontractor Change Order (SCCO) process is used to update the subcontractor contracts and committed cost.

Allowance PCOs are used to track subcontract allowances that are already part of the subcontract. These PCOs do not tie to budget lines, but provide written confirmation to spend an allowance and are useful to track remaining balances of allowances. Example: Winter conditions allowance in the mason’s contract.

If necessary, Allowance PCOs can also act as EXT PCOs. They can be useful if a project needs a separate numbering system for PCOs the owner reviews versus PCOs used to perform internal budget transfers.

Each PCO created will reference a project and a PCO type. For each PCO type, a separate number range is maintained starting at “1”.

!


User Manual

Change Management

!!Potential Change Order (PCO) – Contingency Funded – Overview !Project Overview:

• The contingency is included in the base budget and does not require owner approval to spend it.

• Insurance and tax billing rates are set in the Owner Contract. • Fee is a lump sum. • Net adds/deducts to the contract value are entitled to an increase in insurance along with a

mark-up in fee. !Change Scenario:

• The change to the project will be funded from contingency, so no funds will be added or removed from the project.

• This will result in an External PCO being created because we are funding the change from the contingency line item.

• The PCO Price Category recommended is Original (ORIG) and the Billing Price Category will be Original (ORIG) because the mark-ups for contingency are included in the original budget.

• No mark-ups will be applied to the change because there is no net change to the contract value. !

Potential Change Order (PCO) Processing Transaction: ZPSPCO

1. Access the transaction by entering the transaction code and clicking the button.

Transaction Code ZPSPCO !2. In the Project Definition field, enter the project number or click

the Look Up button to search.

Practice: Enter your assigned project number

!3. In the PCO Type field, click the drop down . Pick the applicable

PCO type.

Practice: Select

4. Click the radio button.

5. Click the Execute button.

Note: In the PCO Number field, the system-generated PCO Issued: 10/09 Revised: 3/21/2012 Page ! of !6 21

User Manual

Change Management

!!Change Order Request (COR) Process Overview !The Change Order Request (COR) process is used to assemble Potential Change Order (PCO) line items for presentation or to prepare for inclusion on a PCCO. There are two types of CORs: !

Internal CORs – These CORs will not be issued to the Owner. They are used for Budget Transfers and other budget revisions that do not require Owner approval. Most of these CORs will net to $0 because they are funded within the project. !External CORs – These CORs will be issued to the Owner for approval. Most often, an External COR will result in a net add or deduct to the project budget. An exception is when the change is funded from contingency and still requires owner approval. !

For each COR type a separate number range is maintained starting at "1". !Any External PCO line items can be included on either an External or an Internal COR. Multiple External PCO line items may be included on a single COR. Allowance PCO line items that have the WBS fields populated can also be included on a COR. !All PCO line items included on a COR have a default status from the PCO budget status. Cancelled line items and items already on a COR cannot be selected. No changes may be made to the PCO value from the COR, but the Description and Status fields can be changed. If changes to the values are necessary, a link to the PCO (by clicking on the PCO number) is provided to allow updates within the PCO. Line item status may be set to Pending (PEND), Rejected (REJE), Notice to Proceed (NTP) and Revise / Resubmit (REVI). Line item status cannot be set to Approved (APPR) in the COR process; this is done by the PCCO process. !

Notice to Proceed (NTP): The NTP status is intended to identify changes that have been approved by the Owner. If the change does not have to be approved by the Owner, this status can be set when the COR is created. Only PCOs with a NTP status can be linked to a PCCO. !When the Notice to Proceed status is set on any line item, the associated Approved values on the PCO line item are available for update. It is not necessary to enter a value in the Approved budget and cost fields unless the value is different than the PEND amount. !Note: Markup amounts on a PCO line item cannot be changed after it is linked to a COR. If markups need to be changed, the affected PCO line item must first be removed from the COR (status on the COR must be PEND, not NTP) and the COR saved. Edit the markups in the PCO, save the PCO, then relink the line item to the COR. Reset the line item status to NTP in the COR and save again. !


User Manual

Change Management

! Revise /Resubmit (REVI): When the line item status is set to Revise / Resubmit status and the COR is saved, the line item and all its associated markup line items are removed from the existing COR and are automatically included on a COR revision. For example, the first revision to COR Number 1 would be COR Number 1 Rev No 1. !

! !Rejected (REJE): When the Rejected status is set on any line item, the line item is not modified, and everything looks the same, but the effect in the system is the same as cancelling the change. However, unlike “Cancel” status, the “Rejected” status cannot be reversed. If you mistakenly select “Rejected” status for a line item, do not save the COR. Immediately click the green arrow Back button to exit the COR without saving. Then reenter the COR and resume your changes. !

Change Order Request (COR) – Contingency Funded – Overview !In the previous steps, you created an External PCO. Per the Contract, no Owner Approval is required for Contingency funded changes. Since no owner approval is required, this will result in an Internal COR. Without a COR you will not be able to create a PCCO in SAP, so the COR step must be done. !Change Order Request (COR) Processing Transaction: ZPSCOR


Transaction Code ZPSCOR

!!2. In the Project Definition field, enter the project number. Or click

the Look Up button to search.

Practice: Enter your assigned project number.

3. In the COR Type field, click the Look Up button. Pick the Issued: 10/09 Revised: 3/21/2012 Page ! of !8 21

User Manual

Change Management

!!


User Manual

Change Management

!Prime Contract Change Order (PCCO) Process Overview !A Prime Contract Change Order (PCCO) is made up of Change Order Requests (CORs) and is used to update the project budget and/or sales order (schedule of values). !Each PCCO is created with reference to a project and a PCCO type. PCCO types are Internal (INT), Pre-GMP (PRE), or Regular (REG). Numbering is sequential by project by PCCO type, starting at number “1”.

Internal PCCOs are used for budget transfers, contingency changes, and other items that have a net $0 change to the budget and SOV. Internal PCCOs are used for change orders that do not need to be issued to or by the Owner.

Pre-GMP PCCOs are used for all changes that require Owner approval prior to the finalization of the GMP. Pre-GMP PCCOs are issued to the Owner.

Regular PCCOs are used for all additional scope, and net add/deduct changes to the project budget and SOV. Regular PCCOs are issued by / to the Owner.

!Prime Contract Change Order (PCCO) – Contingency Funded – Overview !In the previous steps, you created an External PCO and Internal COR. Next, you will create the Internal PCCO to complete the change order process. You know it is an internal PCCO because it does not need to be issued to the owner. !Prime Contract Change Order (PCCO) Processing Transaction: ZPSPCCO


!Transaction Code ZPSPCCO

!2. In the Project Definition field, enter the project number. Or, click

the Look Up button to search


3. In the Owner Contract field , enter your contract number or click the Look Up button to search.

Practice: Click the Look Up, select Morgan State University and click the button.

Note: Only those CORs that have a matching Prime Contract Number will be available for selection in the PCCO. Issued: 10/09 Revised: 3/21/2012 Page ! of !10 21

User Manual

Change Management

!Subcontractor Change Order (SCCO) Process Overview !A Subcontractor Change Order (SCCO) can be created from one or more Potential Change Order (PCO) line items. The SCCO will update the project information and add one line item per PCO line item to the subcontract. !When subcontractor quotes are approved, a SCCO can be created. When completing the SCCO process, there are two different save options available: “Save Only” and “Save & Update”. !

Save Only captures the SCCO data, but has no impact on the PCO line item status, commitments, or the Purchase Order. PCO items can be edited in this status. !Save & Update changes the PCO line item Cost Status to APPR (Approved), updates project commitments, and adds the line item to the Purchase Order. Once the Save and Update is complete, the Issued Date and PCO Line item fields are locked and cannot be modified. !

It is recommended that the PCCO process is completed prior to issuing a Subcontract Change Order. However, an SCCO can be created for a PCO line item that has not been linked to a COR or PCCO. !Subcontractor Change Order (SCCO) Processing Transaction: ZPSSCCO


!Transaction Code ZPSSCCO !2. In the Project Definition field, enter your assigned project

number or click the Look Up button to search.


3. In the Contract Number (PO Number) field, enter your purchase order number or click the Look Up button to search.

!Practice: Select Centerline Construction Company.



Note: In the SCCO Change Number field, the system-Issued: 10/09 Revised: 3/21/2012 Page ! of !11 21

User Manual

Change Management

!!


User Manual

Change Management

!Potential Change Order (PCO) – Owner Funded – Overview !Project Overview:

• The contingency is included in the base budget and does not require owner approval to spend it.

• Insurance and tax rates are set in the Owner Contract. • Fee is a lump sum. • Net adds/deducts to the contract value are entitled to an increase in insurance along with a

mark-up in fee. !Change Scenario:

• The change to the project will be funded by the Owner, so funds will be added or removed from the overall Project Budget.

• Since this change affects the Budget, an External PCO will be created. • The PCO Price Category will be Change (CHG) and the Billing Price Category will be

Change (CHG) because the Owner Contract specifies special markups for net adds/deducts to the Contract.

• Mark-ups will be applied to the change because there is a net change to the contract value. !Potential Change Order (PCO) Processing Transaction: ZPSPCO

1. Follow Steps 1-25 in the Contingency Funded example to complete the PCO for an Owner Funded Change.

Practice:

Project Definition: Enter your assigned project number

PCO Type: Select

Radio Button: Select

PCO Description: Type Install heated walkway at Stadium entry

Reason For Change: Select

Funding Source: Select

Item Description cell: Type Install coils in poured concrete

Commitment WBS cell: Select

PCOPrCat cell: Select

Note: You select the change price category to apply the appropriate mark-ups for additional scope.

BillPrCat cell: Select Issued: 10/09 Revised: 3/21/2012 Page ! of !13 21

User Manual

Change Management

!!


User Manual

Change Management

!Change Order Request (COR) – Owner Funded - Overview !In the previous step, you created an External PCO. Next, you will create an External COR since it must be presented to the owner for their approval. !Change Order Request (COR) Processing Transaction: ZPSCOR

1. Follow Steps 1-7 in the Contingency Funded Example to create and describe the COR.

Practice:


COR Type: Select


COR Description: Type Concrete for heated walkway

2. Click the button to insert PCO line items into the COR.

3. Select the PCO line item(s) to be included in this COR.

Practice: Select the check box for PCO 6 – Items 10, 20 and 30

4. Click the button.

5. In the Requested Days field, enter the amount of additional days approved in this COR if required. These days will appear on the COR form.

Practice: Type 5

6. Click the Save button.

7. Click the Back button.

!!

8. In this example, the Owner does not agree with an additional 40 hours in supervision (Line 30). The Owner and the PM will have to negotiate further and the COR will have to be revised.

Practice:


COR Type: Select Issued: 10/09 Revised: 3/21/2012 Page ! of !15 21

User Manual

Change Management

!Prime Contract Change Order (PCCO) – Owner Funded - Overview !In the previous steps, you created an External PCO and an External COR. Next, you will create a Regular PCCO for the owner's approval to add/deduct funds to the project. !Prime Contract Change Order (PCCO) Processing Transaction: ZPSPCCO

1. Follow steps 1-7 in the Contingency Funded example to create and describe your PCCO.

Practice:


Owner Contract: Click the Look Up, select Morgan State University, and click the button.

PCCO Type: Select


PCCO Description: Concrete for heated walkway

2. In the Issued Date field, enter the appropriate date.

Note: Since Regular type PCCOs are issued for approval, they require an issue date to be entered.

Practice: Enter today's date

3. Click the button to add CORs to PCCO

4. Select the COR(s) to be included in this PCCO.

Practice: Select the check box for EXT COR 1 – Concrete for heated walkway.

Select the check box for EXT COR 1 REV# 01 – Concrete for heated walkway REV# 01.

!5. Click the button.

Note there are 3 days in the “Approved Working Days” field. These days were pulled from the “Approved Days” field on the COR. Also, the “New Substantial Completion Date” has been changed to reflect the additional 3 days.

Also note there is a value in “Approved Amount”. This is because the line items included in this PCCO are not funded


User Manual

Change Management

!!


User Manual

Change Management

!Subcontractor Change Order (SCCO) – Owner Funded Overview !The Subcontractor Change Order (SCCO) process does not change based on the PCO funding source. !Subcontractor Change Order (SCCO) Processing Transaction: ZPSSCCO

1. Follow Steps 1-7 of the Contingency Funded example to create and describe a new SCCO.

Practice:


Contract Number (PO Number): Select Baker Concrete


SCCO Description: Type Concrete for heated walkway

Issued Date: Enter today’s date

2. Click the button to show the available PCO line items to choose from.

3. Select the check box of the PCO line items you want to add to the SCCO.

Practice: Click the check box for PCO 1 – Item 20 – BP 2 – Remove concrete columns.

Click the check box for PCO 6 – Item 20 – Poured concrete for heated walkway.

4. Click the button.

5. Click the PCO Number field to view the PCO if necessary.

Practice: Select PCO Number

Oops! Look at Baker’s line item 20 in PCO 1. It is funded from contingency – you can quickly tell the item is funded internally because the funding WBS is different from the commitment WBS. Also, because this is an external contingency controlled by the owner, we must obtain approval prior to expending contingency funds. In short, we are not ready to write a SCCO to Baker for this cost. We will need to remove this PCO from the SCCO.

To remove PCO line items from a SCCO

! !1821

User Manual

Change Management

!!

! !1921

User Manual

Change Management

!Potential Change Order (PCO) – Allowance - Overview !In this scenario, an allowance is included in the base bid of the subcontract and does not require owner approval to spend it. You will be using an Allowance (ALW) PCO to track time and material spending on a monthly basis against the allowance. Once the allowance spending is complete, the remaining funds will be deducted from the subcontract and placed into contingency. !Allowance PCOs do not impact budget or planned cost, but are useful to provide written directives to authorize the use of allowance funds. ALW PCOs allow you to easily determine how much remains in a certain allowance line as well as verify monthly invoice amounts. Allowance PCO types do not require all of the fields required for INT/EXT type PCOs, but can be used as an EXT PCO if you choose to fill out the fields. !Potential Change Order (PCO) Processing Transaction: ZPSPCO

!

1. Start the transaction using the menu path or transaction code.

!2. In the Project Definition field, enter the project number or click

the Look Up button to search


1. In the PCO Type field, click the drop down . Pick the necessary PCO type.

Practice: Select



Note: In the PCO Number field, the system generated PCO number appears.

!4. In the PCO Description field, enter a description of your PCO.

Practice: Type Baker – Winter Conditions Allowance – Concrete

!!!

! !2021

User Manual

Change Management

!

! !2121

Documents

test doc DMS