Kahua has published the final version of the Release Notes for the 2021.6 Release which is scheduled for September 18, 2021.  Click the link to access the release notes (updated Sept 9, 2021).

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SOV (Schedule of Values) Breakdown Overview

TABLE OF CONTENTS

1 Overview

The SOV Breakdown allows Kahua users to set up and approve contracts at a high level, then later break the contract into smaller cost items via the SOV Breakdown document. 

NOTE: The SOV Breakdown process is opt-in.  By default, contracts use the existing non-SOV process. If desired, SOV Breakdown can be completely disabled in configuration. 

The SOV Breakdown injects itself between the commitment documents, i.e., the contract and the change orders, and the Pay Request. SOV allows users to:

•    Breakdown the contract line items into as much detail as required.

•    Approve some or all line items for inclusion onto the pay request.

•    Control line-item numbering as needed in the pay request.

•    Control which contract change orders are included on the SOV, and hence in the pay request.

•    Incorporate updates from contracts and change orders into the SOV Breakdown, and thus to pay request, if allowed by user’s cost process. 

•    Help support contingency and allowance processes via controlled changes to the SOV Breakdown.


2 System Requirements

The Schedule of Values Breakdown application coordinates data between Kahua’s Expense Contract, Contract Change Order and Pay Requests.  Only Kahua supplied versions of these applications, without custom extensions, will work with SOV Breakdown. 

Clients’ need the following applications installed without custom extensions:

•    kahua_Contract_Extension

•    kahua_ContractInvoice_extension

•    kahua_Cost_Workflow_extension

•    kahua_SOVBreakdown

•    kahua_WorkBreakdown_extension

Installed applications for a user’s Kahua installation can be found under Installed Apps:

 

3 Configuring SOV Breakdown

SOV Breakdown may require setup for a given Kahua domain.  

The SOV Breakdown application is a standard Kahua application. 

•    Standard group security permissions controls who can access the application. 

•    It can be enabled, or disabled for the domain.

Enable the SOV Breakdown in Configuration in SOV Breakdown/General.


 

In addition, the “Use SOV Breakdown” attribute on Expense Contracts must be visible and editable for users to control which contracts leverage the SOV Breakdown. Make sure this field is visible in Expense Contracts/Fields configuration.

 

4 Using SOV Breakdown for a Contract

SOV Breakdown can be enabled on a contract as long as no pay requests exist for that contract.  

 

If pay requests exist for the contract, it is impossible to change the Use SOV Breakdown setting.

 

 

If all Pay Requests are subsequently deleted for a contract, then Use SOV Breakdown option may be changed. See Deleting SOV Breakdown section below.


4.1 Contracts not Using SOV Breakdown

Contracts not using SOV Breakdown will work the same as before, with one minor change to the Item Number on the Pay Request.  We’ve added a Source Number to pay request grid.

Pay Requests use Auto-Sequence numbering rules for line items’ Item Numbers.  Historically, the order that items appeared was based on the order they were added.  With the new SOV Breakdown functionality, we now order items first by the item’s source: Contract then Change orders, then by Contract Item (or SOV item number) under Contract and change order number under Change Orders. If change orders are added out of sequence, the auto-sequence number for pay request line items change.


For example, in the first screenshot below, a line item with source number 0003 has been added to the pay request from a change order and assigned item number 0005.

 

In the next picture, a line item from a different change order with source number 0002 was added to the pay request before the source 0003 line item. The source 0002 line item is assigned item number 0005 , while the item with source number 0003 is assigned item number 0006.

 

The Source Number is a new attribute we have introduced to line items on the Pay Request. This maps the Pay Request line items to their related source items on contracts and change orders for non-SOV Breakdown contracts. 


For non-SOV contracts, the Source number is based on the contract line item number and change order numbers. Therefore, we recommend using this new Source Number for all pay requests going forward, but it is not required.


4.2 Use SOV Breakdown on an Expense Contract

When selecting to use the SOV Breakdown in an expense contract, pay requests may not be raised for the contract until the contract’s SOV Breakdown has been created.

 

Before a user can create a pay request for this contract, they must process the contract to an SOV. Process to SOV will appear as an option while the Expense contract is Approved until an SOV Breakdown is created for the contract. Then, click the Process to SOV button. Once the user saves the resulting SOV Breakdown for the contract, pay requests are allowed. 

      


4.3 Contract Line Items and the SOV Breakdown

Contract Line Items form one of the primary groupings of line items on the SOV Breakdown, and, eventually, the pay request. The other primary grouping on SOV Breakdown is by change orders.

There are a couple of key considerations for how many contract line items you need when using SOV Breakdown. 

The contract line items form ‘buckets’ for breaking down the contract in the SOV Breakdown. 

•    For a given contract line item, all related SOV items must use the same activity code, or a child activity code, as the contract line item. 

•    For a given contract line item, the sum of allocated Amounts for all related SOV items must be between 0 and the contract line item amount.  

For a simple WBS coding structure, one contract line item may suffice to cover the entire contract. However, if you need to differentiate among many activity codes, multiple contract line items may be required.

Here’s an example. 

Contract line item 02 has WBS activity code 0001.03 Concrete.


In the current project’s WBS, activity code 0001.03 Concrete has multiple child activity codes denoting more specific types of Concrete cost items.

 

When creating an SOV from the expense contract, the user can apportion the amount assigned to code 0001.03 Concrete in the expense contract into SOV line items containing any of 0001.03’s child activity codes from the WBS.

 

IMPORTANT: To use the WBS hierarchy to select child activity codes for SOV Breakdown items, ensure the setting Expense only at leaf nodes is disabled. See Cost Configuration overview for instruction.  


If different branches of the WBS need to be segregated inside the contract, use different contract line items with different activity codes to do this. 


For example - the Temporary Power activity code needs to be included on the same contract as other the main electrical work.  In this case, either use a single contract line item with the top level (i.e., SOV Level) activity code, or use two contract line items, one with activity code SOV.00026 and the other with activity SOV.26.  

Alternatively, move temporary power under electrical contract node in the WBS. 

 

NOTE: the SOV Breakdown line items can be assigned to the same activity code as the related contract line item, or a child activity code. For example, in the above scenario, assign the SOV Items under the Contract Item containing activity code SOV.26 to any of SOV.26, SOV.26001, SOV.26500, or SOV.26999.  

Contract Line Items:

 

Related SOV Items:

 


4.4 Approve Contract and Process to SOV

To create the SOV Breakdown for a contract, first approve the contract.

 

Then select Process to SOV.

 

NOTE: if edits to the contract line items are a) allowed and b) made, some edited values, such as item number and description, will automatically be updated on the SOV Breakdown.  Other edited values, such as Activity code and Total Amount, may be refreshed on the SOV Breakdown. For more details on refreshing the SOV Breakdown, see the Refresh SOV Breakdown section below.

NOTE: The activity code of a Contract line item can only be changed to another value where all the sub activity codes on the related SOV breakdown line item are still child items of the revised activity code, otherwise the data in the SOV cannot be refreshed.

 For more detail on SOV activity codes, see the Activity Code section below.

NOTE: The Total Amount of the contract line item will need to be greater than or equal to the progress amounts of the related SOV Breakdown. For more detail, see the Amount section below.

 


4.5 Deleting SOV Breakdown for a Contract

Unselecting the Use SOV Breakdown checkbox and saving the contract will delete the related SOV Breakdown, if no pay requests exist for the contract. 

 

 

 

When attempting to remove SOV for a contract with pay requests, the user sees the following error message and is unable to remove SOV from the contract.

 

NOTE: If pay requests do exist for the contract, deleting all pay requests will allow the user to remove the SOV from the contract.


5 The SOV Breakdown Document

The SOV Breakdown is an intermediary document where contract line items can be broken down, or allocated, into SOV line items. These SOV Items form the line items on the related Pay Request. Contract Change Orders and their lines can also be included on the SOV Breakdown and the related pay requests. 

NOTE: Changes order line items are not treated the same as contract line items in the SOV Breakdown. Contract change orders come onto the SOV already broken down by their line items, with their activity codes and their amounts locked. No additional SOV line items can be created, or deleted, for change orders that have been added to the SOV Breakdown.


5.1 SOV Items - Key Concepts

SOV line items become the top-level items on the pay request. In the below example, the contract item 02 Concrete has been split into 5 SOV line items.


These SOV line items can then be found as top-level items on the subsequent pay request.


The SOV Breakdown is separated into two main parts. The Contract Items, and Change Orders. 

Contract items are just that. Each section represents a contract line item, with its related SOV Items entered by the user as required.

Change Orders are just that as well. Each section represents a change order, with its SOV items mapped one-to-one with the change orders line items. 


5.1.1 Item Number

The Item number on the SOV is editable. It defaults to “the next number” on the UI, but it can be updated to any number.

 


NOTE: The automatically populated next number functionality is only a helper.  It can be easily outsmarted. The intent is to follow the pattern a user sets up, but this can be overridden to any value.


If the item number is updated in the SOV after pay requests have been created, the next pay request will use the revised value in its Source Number.


The SOV Item Number is concatenated with SOV Items’ parent number on the pay request to form the Source Number.  See Source Number vs Item Number section below.


NOTE: the item number for a Change Order SOV Item is not editable. It matches the related Change Order items number.

 


5.1.2 Activity Code

The activity code of an SOV line item must be equal to, or a child of, the SOV item’s parent activity code in the contract. 

 


The activity code cannot be edited after the line item is used on a pay request.


NOTE: the activity code for a Change Order SOV Item is not editable. It matches the related Change Order item’s activity code.

 

5.1.3 Description

The description is what appears on the pay request item description.

 


If you edit the value here after pay requests are created, the next pay request will use the revised value in its description.


5.1.4 Status

SOV item status controls whether the SOV Item appears on the pay request and, therefore, if it can be billed or progressed.

 

The status cannot be edited after the SOV item is used on a pay request.

 


5.1.5 Amount

Line item amounts in the SOV can be edited, but there are some restrictions:

•    The sum of the amounts must be between 0 and the amount of the parent item.

 

 


•    After the SOV item is used on a pay request, the Amount must be greater than or equal to the Progress amount (or vice versa if the amount is negative).

 

 

NOTE: The Amount for a Change Order SOV Item is not editable. It matches the related Change Order item’s activity code.

 


5.2 Contract Items - specific functionality

The Contract Items section contains the SOV items related to Contract Line items. Contract items in the SOV may only have activity codes that are child activity code to that of the original contract line item in the WBS (they may also have the same activity code as the contract line item).

 



5.3 Change Orders Section

To add Change orders to the SOV Breakdown, the change order must be first approved.


To add an approved change order, choose Select Change Orders from the tool bar.

 

Then, choose the change orders to include.

Click save and the change order and its line items will be added to the SOV.

Restrictions to editing Change Order SOV items:

•    The amount and activity code are not editable.

    o  They need to match the related change processes used to create and approve them.

•    The description can be edited for better readability on the pay request.

•    The status can be edited to choose whether to include these items on the pay request or not.

    o  By default, the status is set to approved. The system assumes the Change Order is ready to roll directly on the pay request.

Differences to non-SOV Contracts for change order items on the pay request:

•    Change order line item are top level items on the pay request, compared to 2nd level or child items created with non-SOV contracts. 

5.4 Refresh SOV Breakdown

The refresh button updates the SOV breakdown with certain modifications to related Contract line items and included change orders.  

 

NOTE: There’s considerable debate on the exact restrictions that should be applied to the Approved Contract and approved Change Orders.  

•    Some argue that once approved, these documents should never be altered.  

•    Others argue it is the overall value of the contract being approved and signed for, not the details of the line items on the contract. 

•    Both approaches are supported by Kahua SOV Breakdown.  

Refresh gathers updates to activity codes and total amounts from the contract line items and change order line items, including new line items and edits to existing line items. There are limitations to what can be refreshed, primarily around activity codes and total amounts. 

PLEASE NOTE: Edits to the activity codes on the contract and change orders will not affect existing pay requests.

 

6 Pay Request and SOV Breakdown

The goal of the SOV breakdown is to provide a detailed breakdown of the contract and change orders on the pay request. 

Once the SOV Items appear on the pay request, everything works similarly to pre-existing pay request functionality. 


6.1 Source Number vs Item Number

The SOV Breakdown introduces source number, a new numbering capability on the Pay Request.

For SOV based contracts, the source number is a concatenation of the SOV item’s parent (contract item or change order) number and the SOV item number.

 

 

For non SOV based contracts, the Source Number is the Contract Line item number or the Change order + Change order line item number.

The historical pay request Item Number remains for backwards compatibility. 

NOTE: It is not quite 100% backward compatibility. See Contracts not Using SOV Breakdown above . 

 

6.2 New Pay Requests Get Data from Previous Pay Requests and Latest SOV Breakdown

The SOV breakdown is a more flexible source of content for the pay request line items.  

When a new pay request is created, it first refreshes its line items with potential updates on existing line items from the SOV Breakdown and pulls in additional line items not previously approved for inclusion on the pay request. 

Once that is complete, the pay request collects the previous pay request data and pulls it forward, mapping the content to previously existing line items. 


7 FAQ

7.1 Not All SOV Breakdown Items Appear on the Pay Request

By design, only Approved SOV items appear on the pay request. They may or may not sum to the current contract. 

 

 

 


The intent is the SOV Breakdown can be the full list of items summing to the current contract, with only a partial amount released (or approved) for inclusion on the pay request.  


7.2 There is No SOV Breakdown Delete Button

The SOV Breakdown is tied tightly to the related contract.  See Delete SOV Breakdown above.


7.3 I Want to Migrate Existing Contracts to SOV Breakdown

Once pay requests are created for a contract, it is not possible to migrate an existing contract over to use SOV Breakdown.  

If desired, all pay requests can be deleted and that contract can now use SOV Breakdown.  This is obviously a significant impact to integrations etc.

The recommended approach is to continue with existing contracts, but make new contracts use SOV Breakdown. 


7.4 I Want All My New Contracts to Use, or Not Use SOV Breakdown

Currently, this cannot be enforced via configuration. This will be updated in an upcoming release.


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