diff --git a/modules/project-factory/README.md b/modules/project-factory/README.md
index f95815588..4180e7e22 100644
--- a/modules/project-factory/README.md
+++ b/modules/project-factory/README.md
@@ -898,11 +898,11 @@ compute.disableSerialPortAccess:
 
 | name | description | type | required | default |
 |---|---|:---:|:---:|:---:|
-| [factories_config](variables.tf#L170) | Path to folder with YAML resource description data files. Exclusions match the start of file paths, relative to their containing folder. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> | ✓ |  |
+| [factories_config](variables.tf#L194) | Path to folder with YAML resource description data files. Exclusions match the start of file paths, relative to their containing folder. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> | ✓ |  |
 | [context](variables.tf#L17) | Context-specific interpolations. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
 | [data_defaults](variables.tf#L47) | Optional default values used when corresponding project or folder data from files are missing. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
-| [data_merges](variables.tf#L112) | Optional values that will be merged with corresponding data from files. Combines with `data_defaults`, file data, and `data_overrides`. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
-| [data_overrides](variables.tf#L131) | Optional values that override corresponding data from files. Takes precedence over file data and `data_defaults`. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
+| [data_merges](variables.tf#L124) | Optional values that will be merged with corresponding data from files. Combines with `data_defaults`, file data, and `data_overrides`. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
+| [data_overrides](variables.tf#L143) | Optional values that override corresponding data from files. Takes precedence over file data and `data_defaults`. | <code>object&#40;&#123;&#8230;&#125;&#41;</code> |  | <code>&#123;&#125;</code> |
 | [folders](variables-folders.tf#L17) | Folders data merged with factory data. | <code>map&#40;object&#40;&#123;&#8230;&#125;&#41;&#41;</code> |  | <code>&#123;&#125;</code> |
 | [notification_channels](variables-billing.tf#L17) | Notification channels used by budget alerts. | <code>map&#40;object&#40;&#123;&#8230;&#125;&#41;&#41;</code> |  | <code>&#123;&#125;</code> |
 | [projects](variables-projects.tf#L17) | Projects data merged with factory data. | <code>map&#40;object&#40;&#123;&#8230;&#125;&#41;&#41;</code> |  | <code>&#123;&#125;</code> |
diff --git a/modules/project-factory/projects-defaults.tf b/modules/project-factory/projects-defaults.tf
index 4a7f5e6a1..9cc672f41 100644
--- a/modules/project-factory/projects-defaults.tf
+++ b/modules/project-factory/projects-defaults.tf
@@ -51,16 +51,56 @@ locals {
         local.data_defaults.defaults.contacts
       )
       factories_config = {
-        aspect_types           = try(v.factories_config.aspect_types, null)
-        custom_roles           = try(v.factories_config.custom_roles, null)
-        data_catalog_taxonomy  = try(v.factories_config.data_catalog_taxonomy, null)
-        observability          = try(v.factories_config.observability, null)
-        org_policies           = try(v.factories_config.org_policies, null)
-        pam_entitlements       = try(v.factories_config.pam_entitlements, null)
-        quotas                 = try(v.factories_config.quotas, null)
-        scc_mute_configs       = try(v.factories_config.scc_mute_configs, null)
-        scc_sha_custom_modules = try(v.factories_config.scc_sha_custom_modules, null)
-        tags                   = try(v.factories_config.tags, null)
+        aspect_types = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.aspect_types, null),
+          try(v.factories_config.aspect_types, null),
+          try(local.data_defaults.defaults.factories_config.aspect_types, null),
+        ), null)
+        custom_roles = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.custom_roles, null),
+          try(v.factories_config.custom_roles, null),
+          try(local.data_defaults.defaults.factories_config.custom_roles, null),
+        ), null)
+        data_catalog_taxonomy = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.data_catalog_taxonomy, null),
+          try(v.factories_config.data_catalog_taxonomy, null),
+          try(local.data_defaults.defaults.factories_config.data_catalog_taxonomy, null),
+        ), null)
+        observability = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.observability, null),
+          try(v.factories_config.observability, null),
+          try(local.data_defaults.defaults.factories_config.observability, null),
+        ), null)
+        org_policies = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.org_policies, null),
+          try(v.factories_config.org_policies, null),
+          try(local.data_defaults.defaults.factories_config.org_policies, null),
+        ), null)
+        pam_entitlements = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.pam_entitlements, null),
+          try(v.factories_config.pam_entitlements, null),
+          try(local.data_defaults.defaults.factories_config.pam_entitlements, null),
+        ), null)
+        quotas = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.quotas, null),
+          try(v.factories_config.quotas, null),
+          try(local.data_defaults.defaults.factories_config.quotas, null),
+        ), null)
+        scc_mute_configs = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.scc_mute_configs, null),
+          try(v.factories_config.scc_mute_configs, null),
+          try(local.data_defaults.defaults.factories_config.scc_mute_configs, null),
+        ), null)
+        scc_sha_custom_modules = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.scc_sha_custom_modules, null),
+          try(v.factories_config.scc_sha_custom_modules, null),
+          try(local.data_defaults.defaults.factories_config.scc_sha_custom_modules, null),
+        ), null)
+        tags = try(coalesce(
+          try(local.data_defaults.overrides.factories_config.tags, null),
+          try(v.factories_config.tags, null),
+          try(local.data_defaults.defaults.factories_config.tags, null),
+        ), null)
       }
       iam                           = try(v.iam, {})                           # type: map(list(string))
       iam_bindings                  = try(v.iam_bindings, {})                  # type: map(object({...}))
diff --git a/modules/project-factory/projects.tf b/modules/project-factory/projects.tf
index 8ad850134..7106d00e3 100644
--- a/modules/project-factory/projects.tf
+++ b/modules/project-factory/projects.tf
@@ -212,6 +212,10 @@ module "projects-iam" {
       lookup(local.self_sas_iam_emails, each.key, {}),
       local.projects_service_agents
     )
+    custom_roles = merge(
+      try(local.ctx.custom_roles, {}),
+      module.projects[each.key].custom_role_id
+    )
     project_ids = merge(
       local.ctx.project_ids,
       { for k, v in module.projects : k => v.project_id }
diff --git a/modules/project-factory/variables.tf b/modules/project-factory/variables.tf
index 2a15d8100..291134dfe 100644
--- a/modules/project-factory/variables.tf
+++ b/modules/project-factory/variables.tf
@@ -53,7 +53,19 @@ variable "data_defaults" {
     }), {})
     contacts        = optional(map(list(string)), {})
     deletion_policy = optional(string)
-    labels          = optional(map(string), {})
+    factories_config = optional(object({
+      aspect_types           = optional(string)
+      custom_roles           = optional(string)
+      data_catalog_taxonomy  = optional(string)
+      observability          = optional(string)
+      org_policies           = optional(string)
+      pam_entitlements       = optional(string)
+      quotas                 = optional(string)
+      scc_mute_configs       = optional(string)
+      scc_sha_custom_modules = optional(string)
+      tags                   = optional(string)
+    }), {})
+    labels = optional(map(string), {})
     locations = optional(object({
       bigquery = optional(string)
       logging  = optional(string)
@@ -138,6 +150,18 @@ variable "data_overrides" {
     }), {})
     contacts        = optional(map(list(string)))
     deletion_policy = optional(string)
+    factories_config = optional(object({
+      aspect_types           = optional(string)
+      custom_roles           = optional(string)
+      data_catalog_taxonomy  = optional(string)
+      observability          = optional(string)
+      org_policies           = optional(string)
+      pam_entitlements       = optional(string)
+      quotas                 = optional(string)
+      scc_mute_configs       = optional(string)
+      scc_sha_custom_modules = optional(string)
+      tags                   = optional(string)
+    }))
     locations = optional(object({
       bigquery = optional(string)
       logging  = optional(string)