A statement of work (SOW or SoW) is a specialized type of contract, typically used in the project management field, that contains considerable detail as to the work to be performed. The purpose of an SOW is to clearly set forth the project details so that both parties fully understand the expectations and the measure of success in meeting those expectations.
A well-written, comprehensive statement of work can avoid conflicts between the contract manager and the client. The document is also sometimes called a scope of work, although it is common to call the document the statement of work and use the phrase scope of work to describe the content of the document.
Preparation of a Statement of Work
A statement of work is often prepared by the project manager, who is usually in the best position to understand the details of the work to be performed. After negotiations with the client are completed, the project manager drafts the SOW, which forms the final agreement.
A statement of work may also be prepared by the client and included as part of the client's request for proposal (RFP). Even if the RFP includes a statement of work, there can be some negotiation before a final statement of work is agreed upon. There may also be a master service agreement, which is more generalized and may be use for two or more projects, each with its own statement of work.
Statement of Work Content and Format
While the exact provisions of a statement of work depend upon the nature of the project and the requirements of the client, it generally contains the following types of information:
- The purpose of the project. This is a general statement of the basic project objective.
- The scope of the work. A description of the product to be created or the services to be performed should state what is included in the work and may also state what is not included.
- Where the work will be conducted. Depending upon the nature of the work and the project, the work may be performed at the vendor's place of business or at the client's site.
- The time period for commencement and completion of the project. This may also be broken down into a timetable for the completion of various project steps.
- The cost and terms of payment. Such a clause may also include a payment schedule and how the payment is to be made.
- The industry standards that are to be used in completing the work. For example, a software development project may be required to comply with the standards set by the American National Standards Institute (ANS) or a building construction project may be required to comply with certain building and safety codes.
- The criteria by which the client will determine whether the outcome is acceptable. For example, if the project is to develop a new website, the criteria might include a certain percentage of increase in website visitors and a certain increase in purchases.
The format for the statement of work may be dictated by the client or created by the vendor.
If you are entering into a contract with the United States government, you may use a statement of work or a similar document called a statement of objectives (SOO) or performance work statement (PWS). The name used depends upon what is required by the government agency for the particular project.
A well-written statement of work can avoid ambiguity about what each party expects, thereby reducing the chances of conflict. Questions that arise along the way can hopefully be resolved with reference to the statement of work. The assistance of an online service provider can help you prepare a statement of work document.