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A statement of work (SOW) is a document used to manage vendor relationships established during the project management life cycle. Essentially, this written narrative of vendor expectations is created to define and describe the work to be completed as well as minimum requirements and responsibilities. The planning document ensures project vendor relationship is performance-based and allows the contractor to realize lower costs and maintain project flexibility. This article describes the document’s purpose as well as two statement of work samples for entry-level project managers.
The statement of work includes all aspects of performance requirements as well as how performance will be assessed. A SOW can be produced separately or along with a request for proposal (RFP), which vendors respond to with an actual proposal. Two great statement of work samples can be found on NYSERDA's website (New York State) and Foundstone's website. Both are helpful templates that can be used in creating your own SOW.
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Elements of an Effective SOW
The following components should be included when preparing and approving a comprehensive SOW agreement:
- Scope of Work - Briefly defines the work to be done by the contractor.
- Deliverables Schedule - List the specific deliverables, describing what is due and when.
- Period of Performance - Specify the allowable time for the project, i.e. start and finish times and key scheduling considerations.
- Location - Specifies the location where the work will be completed to include any necessary resources such as hardware, software, and office space.
- Reporting - Explain reporting requirements to include content, design, and frequency.
This document also includes any policies that address sensitive and proprietary information, confidentiality and non-disclosure agreements, and any other terms and conditions. A well-written SOW provides vendors an understanding of project requirements; provides evaluation guidelines; minimizes overall project evaluation and contract negotiation requirements; and reduces the need for future project changes.
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8 Steps to Prepare a SOW
1. Establish a preliminary scope statement that identifies the project objective or purpose. Be sure to include a description of the type of work being performed including any boundaries associated with performance and duties.
2. List the tasks to be performed to indicate any performance requirements and all project requirements that the contractor must comply with during contract performance.
3. As much as possible, group similar or related tasks and organize each task in logical order.
4. Identify any resources that are necessary to complete each task that includes labor, equipment, or materials.
5. Identify project deliverables required for the project to be successfully completed.
6. Identify any time-sensitive milestones or deliverables.
7. Describe quality expectations and applicable deadlines in terms of quality, quantity, time and appearance. Performance deliverables should be realistic, objective, and measurable.
8. Determine how you will monitor the deliverables. Some methods used include random sampling, periodic inspections, and reporting.
Of course, a key component to successfully preparing the SOW is the contractor’s ability to provide a comprehensive document that fully represents your company and project requirements.
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