Project Server 2013 - New - Project, creates groups at the root site level, Server is in Project Server Permission mode

I created an Enterprise Project in PWA and moving up to the root site settings I see there was the four basic groups created there just for this project. This is not acceptable when there will be 500 projects on the server. Is there a setting to turn this
off. I guess we will rarely create projects with PWA, so I will see if creating a Project in Desktop has the same effect.  Still would like to understand why this is happening.  Thank you.
Site Provisioning settings are located under Central Administration -> Manage Service Applications -> Project Application Service -> Manage ->
Project Site Provisioning Settings
Turning that off allows the group creation to cease.
Then PWA Settings -> Operational Policies -> Connected Sharepoint Sites
allows selective creation of a Project Site (Workspace)
This set up is perfect for what I require.

I assume that you're talking about the SharePoint security groups for each Project site? If so, then this is as designed. Each site can have different users, so this is absolutely necessary when you use SharePoint. If you do not want to create project sites
for your projects automatically, you have already discovered how to turn off automatic site creation.
If you turn off the Project application service, you disable Project Server. I don't think that is what you want to do. I don't understand your objection to the groups because if you are running in Project Server classic permissions mode, Project Server
manages the group membership for you.
Gary Chefetz, MCITP, MCP, MVP msProjectExperts
Project and Project ServerFAQs
Project Server Help BLOG

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