Statement of work
A statement of work (SOW) is a formal document that captures and defines the work activities, deliverables and timeline a vendor will execute against in performance of specified work for a client. Detailed requirements and pricing are usually included in the Statement Of Work, along with standard regulatory and governance terms and conditions.
Overview
There are many formats and styles of Statement of Work document templates that have been specialized for the Hardware or Software solutions being described in the Request for Proposal. Many companies create their own customized version of SOWs for use within their industry or vertical that have been either specialized or generalized to accommodate the typical request and proposals they receive.
It is important to note that in most cases the Statement of Work being agreed upon is a binding contract. Master Service Agreements or Consultant/Training Service agreements postpone certain work specific contractual components that are addressed in individual Statement(s) of Work.
Areas addressed
Areas that are typically addressed by a SOW are as follows:
Purpose, Why are we doing this project? This is the question that the purpose statement attempts to answer.
Scope of Work, This describes roughly the work to be done in detail and specifies the hardware and software involved and the exact nature of the work to be done.
Work, This describes where the work is to be performed. This also specifies the location of hardware and software and where people will meet to perform the work.
Period of Performance, This specifies the allowable time for projects, such as start and finish time, number of hours that can be billed per week or month, where work is to be performed and anything else that relates to scheduling.
Deliverables Schedule, This part lists the specific deliverables, describing what is due and when.
Applicable Standards, This describes any industry specific standards that need to be adhered to in fulfilling the contract.
Acceptance Criteria, This specifies how the buyer or receiver of goods will determine if the product or service is acceptable, what objective criteria will be used to state the work is acceptable.
Special Requirements, This specifies any special hardware or software, specialized workforce requirements, such as degrees or certifications for personnel, travel requirements, and anything else not covered in the contract specifics.
Type of Contract/Payment Schedule, The project acceptance will depend on if the budget available will be enough to cover the work required. Therefore payments breakdown whether up front or phased will be negotiated very early at this stage.
Miscellaneous, There are many items that do not form part of the main negotiations but are nonetheless very important to the project. They seem minor but being overlooked or forgotten could pose problems for the project.
References
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The SOW above appears to be taken directly from "Information Technology, Project Management, Fifth Edition" Kathy Schwalbe, pg. 504 Chapter 12
External links
- Statement of Work Writing Guide - A do-it-yourself guide to developing an RFP Statement of Work
- How to write the Statement of Work
- Handbook for Preparation of Statement of Work (SOW)