Statement of Work

What is a statement of work?

The statement of work (SOW) is a document, commonly used in project management, in which a contracting officer specifies the objectives and deliverables for a particular project or service contract. It lists the goals of the project as well as all the activities, deliverables, potential schedule, and financial details for the project. It’s an extremely detailed document and lays the groundwork for the project plan.

An SOW is often included as part of a request for proposal (RFP), a document used to solicit sealed bids from potential vendors and service providers. The SOW will be one of the first documents you take the time to create to lay out the entire landscape of the project. Because SOWs include so many details, using project management software is highly recommended to make writing one a more seamless process.

Types of statement of work documents

Depending on what a statement of work is being used for or the industry a company is in, one of the three different types of statement of work documents will be utilized.

• Design/Detail Statement of Work: Tells the vendor, contractor, or supplier exactly how to do a task and what steps to follow. This clearly defines requirements and is often used in government contracts.
• Level of Effort/Time and Materials/Unit Rate Statement of Work: Typically used for hourly service workers, like temporary or contract workers. This is based on work hours and the material needed to complete the service. 
• Performance-Based Statement of Work: Covers the purpose of the project, the resources that will be provided, and what the end results will be. It should be noted that this SOW does not tell the contractor how to perform the task, so it offers more flexibility and instead focuses on the outcome. 

Benefits of using a statement of work for business

Prospective service providers use the information found in an SOW to determine whether or not they can meet the objectives and deliverables for a particular project or service contract and would like to submit a proposal. Some of these determinations include: 

• Providing a means of understanding between the client and project manager
• Helping project leaders provide a structure for their project plans
• Giving project leaders a place to explain all of the project details for clients
• Saving time and money once delivered
• Assisting in avoiding conflict and confusion within the project by keeping everyone on the same page

Basic elements of a statement of work document

No matter the end goal of the project that needs to be completed, a cohesive statement of work will include the following elements:

• Goals: Outlines the objectives of the project while answering the question of why a company is contracting outside employees. This section serves as an overview to help contracted employees understand what is hoped to be accomplished.
• Explanation of scope: The scope will be communicated as the specific work that will be completed and the extent of the project’s impact. It will define how much work a company wants to accomplish. 
• Project deliverables: Outlines the tasks a company would like performed and the specific requirements a contractor needs to have before being considered for the job.
• Supporting tasks and responsible parties: Sets the framework of who will do what within the project and the various tasks needed to ensure the project is successful.
• Schedule and milestones: A structured project life cycle or timeline that allows all parties to prepare for what’s ahead as well as expected major accomplishments within the timeline.
• Necessary resources: Specifying any materials or equipment that needs to be bought or rented in order to complete the project.
• Financial details: Outlines payment information such as what a company is paying employees. Will also specify if there are resources for an increase in budget.
• Regulations and guidelines: A catchall for anything that has been failed to mention. It can detail what is expected from the completed product, or cover specifics such as who is expected to for any necessary travel.
• Determining criteria: Details what is considered a quality job and provides an explanation for how a vendor will determine if the project is completed successfully. 
• Signed agreement: To make it all official, both parties involved need to sign that they’ve read all of the guidelines, criteria, scope, objectives, and more and that there’s an understanding of all expectations.

Best practices for writing a statement of work document

As a project manager, it’s crucial to record the ins and outs of an SOW as far in advance as possible. It needs to be comprehensive, thorough, and well-polished as it should answer any questions before the assignment begins.

Creating a statement of work document is not an easy task. In order to make the process of writing one smoother, follow these best practices:

• Ask questions from the beginning and as everything is being carried out
• Consider the problem from the point of view of the client
• Define success and failure 
• Understand the major deliverables and when they’re expected
• Outline which tasks will support the deliverable
• State the resources needed to complete the project
• Summarize who will pay which costs and when

Statement of work vs. scope of work

There is a clear difference between a statement of work and a scope of work. The scope of work is one defined section within the statement of work. While a statement of work is a comprehensive document with a variety of details regarding the project that will be carried out, the scope section outlines how those goals will be met, as well as milestones and tasks for the project team.

Having a scope of work within a SOW gives an understanding of project outcomes and the type of work that will be done to ensure success.