You are not able to select project based service in the contract.
SAP Business ByDesign
Reproducing the Issue
Go to the Sales Orders work center.
Go to the Contracts view.
Click New to open the new contract window, enter the necessary data in General tab.
Go to the Items tab, click Add Row and open the value help of Product, the service ABC is not available. (ABC represents the ID of service item).
The item group of the service item ABC are all project based. Project based services are not supported in contract.
This is the correct system behavior as designed.
Contract, Project based, Service , KBA , SRD-CRM-ORD , Orders & Contracts , Problem