If you are new to project management then you may be asking these questions; “What is a statement of work”? “What does a statement of work mean in project management?” or “How can I draft one?”
Simply put, a statement of work is a project scope statement or a specific statement that highlights the tasks that a contractor would be required to carry out under a contract.
Although it’s usually referred to as a statement, it is actually a document that states all the deliverables that are expected to be accomplished by the contractor and listing them out in a clear and concise manner.
They include:
- Specifying the quality of job that is expected to be executed
- Stating how the project is to be assessed
- Detailing payment schedules
- Identifying the project location
- Listing out terms & conditions
- Establishing a time frame in which these tasks are expected to be implemented.
It is also legally binding as it is a contractual agreement between two parties and should be the first step to procuring any project. It protects the vendor and the client in the case of occurrence of any disputes arising from the project.
The key to the successful execution of any project lies in a well-written statement of work. What this does for the vendor is that it helps the vendor to know and understand what each phase of the project entails and helps to identify Key Performance Indicators (KPIs) during the life cycle of the project.
Writing a statement of work
There are no shortcuts to writing a statement of work; this is because the document like we mentioned earlier, is expected to detail all the tasks that a contractor is expected to carry out during the project. So here is a breakdown of what a project management statement of work looks like and some helpful hints to help you draft one like a pro.
1. The Introduction
Although a SOW differs from industry to industry, you would still be required to write an introduction for it. It outlines what you expect to get out of the document, but you may want to keep this short by simply giving a general summary of the part that contractor intends to play in the actualization of the project.
2. The Objective
Often times, this part is left out but it helps to list out the objectives or purpose of the project. You want to look at questions like: “who is the project targeted at?” “Who benefits?” “What are we reducing?” “What is it expected to increase or improve?”, etc.
3. The Scope
This section typically gives a technical description of the work to be done. It looks at everything from development to integration, quality assurance, maintenance, and support. If there are hardware or software to be utilized or built, this section covers that, listing out all the requirements and what exactly qualifies as work to be done on them.
Be sure to also list any assumptions about the project that you have but remember to differentiate all tasks from deliverables – they are NOT the same thing. The client reviews deliverables and signs off on them but the tasks are assignments you have to carry out to get the job done.
4. Project Location
This section states where the vendor is expected to execute the project; it could be that some elements of the project are expected to be performed on-site for monitoring purposes while other aspects of the project can be carried out in any location of the vendor’s choosing. Whatever the case, it should be listed here.
Also stated, should be the location for milestone reviews, vendor meetings, and training if required.
5. Project Schedule
If you look at an example of a statement of work, you would quickly realize that it has a clear project schedule.
This section answers the question “when?” Endeavor to schedule milestones, set dates for deliverables and each should state the time for commencement and round up.
Remember to also include the number of billable hours in a week, when training is expected to take place and when reviews are to be carried out.
6. Acceptance Criteria
This section outlines the clearly defined criteria for acceptance of the finished work which must be accepted by both the client and the vendor by way of authorized signatures. It should state the minimum basis for acceptance and what compliance procedures are to be followed.
The project should under no circumstances take off without the signatures from key persons on both sides as this is tantamount to opening up oneself to legal disputes in future.
7. Applicable Standards
Every project management statement of work has a section for applicable standards. This section describes the relevant industry standards that should strictly be adhered to and all the work done at different stages should follow the laid out procedures itemized here.
The standards stated would also define what products or services are deemed “non-conforming”.
8. Contract and Pricing
A statement of work should have a section that details the contract or payment options.
In project management, there are three different types of contracts; you have the fixed price contracts, Time and Material Contracts/Unit Price Contracts and Cost Reimbursable Contracts.
The contract model agreed upon would depend on the available budget for the project and the client’s payment policies.
In Summary
A lot of complexities are involved in the drafting of a statement of work, it requires one with the right level of industry expertise to do so without putting the contracting agency at a risk.
In addition to that, it is also quite time-consuming, one would need to pay adequate attention to prevent ambiguous phrasing, not to mention the level of work that goes into researching various industry standards.
Be that as it may, it’s not an impossible task. If you carefully read through this article, then all you require is a bit of practice and you will be well on your way to crafting SOWs like you have been doing it all your life.
