Purpose

The statement of work (SOW) serves as a guideline of the agreements on performance between a purchasing organization and a seller of goods and/or services. It is frequently an attachment to a contract or a memorandum of understanding between two organizations. The SOW affirms how the purchasing organization wants the work to be performed and the context of that performance, including any specific management practices or protocols the contractor must follow.

Application

The SOW is normally used as an attachment to the contract or agreement and is one of the very earliest documents developed to clarify communications between organizations. As a component of the contract, it is frequently used to settle disputes over what work should or should not be included in a project. It establishes expectations for a variety of issues in the contract relationship, including (but not limited to) the following:

•  Overall project scope;

•  Primary tasks and/or deliverables; •  Costs;

•  Reviews and reports; •  Testing;

•  Support;

•  Performance requirements; •  Period of performance; •  Payments and invoicing.

Because the SOW is normally an attachment to the contract or agreement, it is a primary reference document fr the project manager throughout the life of the project.

Content

Because the SOW is most often developed by the organization requesting the project product or service, it normally reflects a functional, rather than technical, perspective.  Although  the  customer  may have technical  expertise,  the  work they will identify in the SOW is frequently performance oriented or performance based.

An outline for a SOW might look like the following:

1.0 Project Scope and Objectives

This is often a rewrite (or a copy) of the scope statement for the project, providing a general, overall perspective on what the project is intended to accomplish.

2.0 Description of Deliverables/Services

If the project can be defined into the key components or elements of the deliverable or service, they should be defined in sufficient detail to guide the project organization on the buyer’s desired approach. This may include physical deliverables or reports, testing, and support components of the project. The description of deliverables and services is normally the single longest section of the statement of work.

3.0 Costs

In an internal or cost-reimbursement contract situation, a table for the anticipated costs by deliverable, month, quarter, or fiscal year may be provided. This would not be included in a firm fixed-price contract. This may include personnel and materials usage and rates, particularly in a time-and-materials contract.

4.0 Reviews and Reports

This is a detailed description of the regular reporting requirements associated with the project and the level of depth anticipated for those reports. It may include not only timing for the reports, but also the forms and formats required.

5.0 Testing

The testing component details what types of tests are considered mandatory and how and when they must be applied. This may include both formative (in-process) and summative (upon completion) evaluations.

This component may describe support both during and immediately following the project. It should include some details about response times, type(s) of support (telephone, on site, e-mail, chat, and so forth), and what general areas may or may not be covered as a component of the support agreement.

7.0 Performance Requirements

If any specific organizational protocols must be followed, they should be included in the SOW. This might include security, team behavior, configuration management, risk management. and other managerial requirements of the purchasing organization.

8.0 Period of performance

This should be a date-certain window of performance for the contract, from [date] to [date], with no work to be performed outside that window without a contract amendment.

9.0 Payment and Invoicing

This should provide specific guidance on any provisions for interim payment and identify  any specific individuals responsible for ensuring payment in a timely fashion. It may also cross-reference any protocols for invoice submission.

Approaches

In some contracting organizations, the SOW is used as a place to incorporate any special contractual clauses that may not normally be embedded in the contract. If the organization does not normally have a “furnished property” clause or other clause that may directly affect performance, such clauses are sometimes included here. In other organizations, clauses that are nestled deep within the contract, but which are often overlooked, are repeated here for emphasis. The purpose of the SOW is to clarify what work is to be performed by the project organization. If those clauses have direct influence over how the work will be performed, their inclusion here may be appropriate.

Some organizations use SOWs even for internal projects. In such environments, the SOW is used to emphasize the contractual nature of the relationship among the functional managers who may be responsible for the effort.

Considerations

Project managers frequently use the SOW as virtually the sole arbiter of how they will move forward on the project. In some organizations, the SOW is the only customer-authored documentation the project manager ever sees. The project managers may not have access to the full contract, but they almost always have access to the statement of work. As the guiding force for project performance, regardless of legal consequence, the SOW is likely to be seen by the project organization as the final determinant of what the customer wants.