What is a Statement of Work (SOW)? and what type of information does in contain?

A statement of work (SoW) is a document routinely employed in the field of project management. It defines project-specific activities, deliverables and timelines for a vendor providing services to the client. The SOW typically also includes detailed requirements and pricing, with standard regulatory and governance terms and conditions. It is often an important accompaniment to a

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master service agreement or request for proposal (RFP).

Overview

Many formats and styles of Statement of Work document templates have been specialised for the hardware or software solutions described in the Request for Proposal. Many companies create their own customised version of SOWs that are specialised or generalised to accommodate typical requests and proposals they

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receive.

Note that in many cases the Statement of Work is a binding contract. Master Service Agreements or Consultant/Training Service agreements postpone certain

. work-specific contractual components that are addressed in individual Statements of Work. The Master Services Agreement serves as a master contract governing the terms over potentially multiple SOWs. Sometimes it refers to Scope of work. Areas addressed

A statement of work typically addresses these subjects.

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To write a statement of work, you should address certain areas, such as the purpose of the project, the scope of the work being done, the location of the work being performed, the time period of performance, expected deadlines for deliverables, timelines for reviews, industry standards that must be adhered to, acceptance criteria, special requirements if applicable, and finally, the payment schedule. If needed, you can also add what resources and testing will be required to complete the project and who will pay the costs associated with them and when. If you’re going to need post-production support of any kind after the job is done, make sure to add it to the statement of work to ensure the contractor doesn’t just deliver and walk away.

Purpose: Why are we doing this project? A purpose statement

attempts to answer this.

Scope of Work: This describes the work to be done and specifies

the hardware and software involved.

Location of Work: This describes where the work is to be

performed, including the location of hardware and software and where

people will meet to do the work.

Period of Performance: This specifies the allowable time for

projects, such as start and finish time, number of hours that can be billed

per week or month, where work is to be performed and anything else that

relates to scheduling.

. and when.

Deliverables Schedule: This part lists and describes what is due

Applicable Standards: This describes any industry specific

standards that need to be adhered to in fulfilling the contract.

Acceptance Criteria: This specifies how the buyer or receiver of

goods will determine if the product or service is acceptable, usually with

objective criteria. See Acceptance testing.

. Special Requirements: This specifies any special hardware or

software, specialised workforce requirements, such as degrees or

certifications for personnel, travel requirements, and anything else not

covered in the contract specifics.

Type of Contract/Payment Schedule: The project acceptance will

depend on if the budget available will be enough to cover the work required.

Therefore, a breakdown of payments by whether they are up-front or

phased will usually be negotiated in an early stage.

Miscellaneous: Many items that are not part of the main

negotiations may be listed because they are important to the project, and

overlooking or forgetting them could pose problems for the project.

It’s important to understand the project that needs to be completed and all

of the requirements before writing the document to ensure that you do not

miss a vital piece of information.

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It may seem simple, but it’s no easy task to write a proper statement of work. If the writing is poor — if the SOW is too broad, generic, or vague — it could be misinterpreted by the contractor and your organisation could have trouble down the road. When there are misunderstandings due to the way the statement of work was written, it may not be properly executed and disputes can arise.

To get the project completed correctly the first time around, it’s critical that you write an effective SOW. The more precise you can make it, the better. Be clear and unambiguous. Ensure that you use language that is understood by everyone involved — industry jargon and acronyms can lead to confusion and hinder performance, which will lead to poorer results.

Define Success

Detailing your specific needs and your precise expectations in writing in the beginning of your relationship with the vendor, before the work begins, enables your contractor to follow your directions, get the job done correctly, and provide results that are acceptable to your standards, because you’ve defined success.