A Statement of Work (SOW) is a written agreement that includes detailed specifications of a project or service contract. An SOW is usually found as the following document after a Master Service Agreement. This document functions as the guideline for a single project to be fulfilled by a party and to reduce the chance for miscommunication.
When writing statements of work the key is to be as specific as possible for each task and written in language and terminology relevant to the particular industry. Outlining project requirements so that both parties can clearly define the scope and understand expected outcomes is essential when writing a SOW.
This will eliminate the possibility for misinterpretation and aid all parties in achieving a successful project. The following provisions and tips should be included and considered.
1. Scope of the Work: project scope is essential for project planning and is basically a brief overview describing the purpose of the project, special requirements involved in the project, work breakdown structure, the goals of the project and what resources are needed to achieve the goals of the project.
2. Deliverables: items to be provided to the other party as part of the work required to fulfil the contract. Deliverables should be clearly outlined so each party and project teams know what to produce and what the project includes.
3. Tasks: the foundation of the SOW. Tasks are the duties that each party must perform to bring about the expected result or the deliverables. Tasks can be written as an Itemized list that provides what the vendor is expected to perform.
4. Schedule: includes the milestone dates for task completion or specified timetables for the percentage of task completion. Schedules help parties stay on track. If a schedule is not included in a contract, a party runs the risk of not completing work on time and this can lead to higher overture charges. The amount of time expected for one party to complete the project (period of performance) should be clearly stated.
5. Industry Standards and Customs: definitions that state the expectation of the quality of the work. This is important so you know that you are getting what you paid for. Both parties should have a clear understanding of what defines success in terms of completing the project to a satisfactory standard.
It is also worth mentioning that additional points such as payment terms, quality control for products or services should be adequately outlined. Team members for both external and internal projects should be well versed and possess a high level understanding of protocols for handling scope creep.
As a SOW is a document which is situationally unique there is no perfect ‘one size fits all’ template for a Statement of Work. While every transaction differs, the guidelines above should ensure that your SOW touches key considerations. Click here for drafting advice on Master Service Agreements.