Statement of work definition: – The narrative specification of the needed work for the project is referred to as the Statement of Work (SOW). The desires of the top management, the customer, and/or the user group ascertain the complexity of the Statement of Work. Project office prepares the Statement of Work by taking input from the user groups in case the considered project is internal to the company. It is because the user groups try to write in some scientific terms whose meanings can only be understood by the user groups.
It is the only suitability that the Statement of Work (SOW) should be prepared by the project office and submitted to the user groups for verification & approval purpose, since the project office is generally comprised of personnel with writing skills.
The contract may have to prepare the Statement of Work (SOW) for the customer in case of projects that are external to the organization (like competitive bidding), because the customer may not have specialized team of people for preparation. Statement of Work (SOW) is summated by the contractor to the customer in such case. Generally the project manager can rewrite a customer’s Statement of Work (SOW) so that the line managers of the contractor can price out the attempt.
Types of Statement of Work
There are two Statements of Works (SOWs) in case of competitive bidding. The Statement of Work (SOW) which is employed in the proposal and a Contract Statement of Work (CSOW). There may also have additional statements related to proposal like Work Breakdown Structure (WBS) and a Contract Work Breakdown Structure (CWBS).
Contract & negotiation teams should show special care in ascertaining all the discrepancies between Statement of Work (SOW) / Work Breakdown Structure (WBS) and Contract Statement of Work (CSOW) / Contract Work Breakdown Structure (CWBS). It is not guaranteed for good proposal that the customer of contractor comprehends the Statement of Work (SOW). Fact finding is generally required before final negotiations for large projects, because it is necessary that both the contractor and customer comprehend and agree on the Statement of Work (SOW),what work is suggested, what work is needed, the actual foundation for the costs, and other related components. Furthermore it is necessary that the final Contract Statement of Work (CSOW) and Contract Work Breakdown Structure (CWBS) should be consistent with each other.
Misinterpretations of Statement of Work
Misinterpretations of Statement of Work (SOW) can consequence in the loss of millions of dollars. Following are some of the common causes of misinterpretation
- Using imprecise language
- Jumbling tasks, approvals, specifications and special instructions
- Huge variation in size of tasks
- No structure pattern or chronological order
- Failing to obtain third-part review
- Huge variation in how to specify details of work
It is important to understand that misinterpretations of the statement of work occur commonly even when much effort for perfection is made during the preparatory phase. The consequence is creeping scope. A better specification of the requirements up front can be helpful in controlling the creping scope effectively. But this is constantly possible, unfortunately.
For example creeping scope had become a way of life until recently in some industries like defense, aerospace and management information system. In the appliance manufacturing company related to Information Technology Group, The project manager declared once the definition of requirement was completed, she would not accept any scope changes. The user group tried to change the requirements during the continuity of the project. The project manager rejected the requests of changes into the existing project and put that requests for changes for another new project that would be scheduled and budgeted after the completion of the first project. When the initial project was finished and installed at the location of the users, the users said that they are satisfied from the original package and so the improvement package neither approved nor funded.
In the light of the factors mentioned above, manuals on SOW preparation are developed by both government agencies and private industry.
How to Write Statement of Work – Guidelines
Following are some of important guidelines for preparation of statement of work.
- Table of contents should be included in every Statement of Work (SOW) that exceeds two pages in length. This table of content should conform to the coding structure of the Contract Work Break Structure (CWBS). Rarely the Statement of Work (SOW) should contain items that are not mentioned in the Contract Work Breakdown Structure (CWBS); however it is not always essential to limit the items to those mentioned in CWBS.
- Clear and precise task descriptions are required for the preparation of the Statement of Work (SOW). The writer of the Statement of Work (SOW) must understand that people from various backgrounds (buyers, engineers, accountants, engineers and specialists of various departments etc) will read and interpret the efforts made by him. The desired product or service is precisely stated in a better Statement of Work (SOW). The administration of the contract is affected by the clarity of the Statement of Work (SOW), since scope of the required work is specified in the statement. New procurement with likely increased costs is included in the work that falls outside the scope.
- While writing the Statement of Work (SOW), the most probable affect of the written work upon the reader should be considered. Therefore the element of ambiguity should try to be removed from every effort. All government obligations must be properly mentioned. A time limit should also be set if approved actions are to be provided by the government. The nature, condition & time of delivery should be mentioned if Government-Furnished Equipment (GFE) and/or services are to be provided, if feasible.
- The responsibility of the contractor may be relieved (even temporarily) as a result of a provision taking control of the work away from the contractor.
- In specifying requirements, use active rather than passive terminology. Say that the contractor shall perform an activity rather than an activity should be conducted. In other words when a company need is intended, instead of using the permissive term “should”, the mandatory term “shall” is used.
- Those abbreviations are used that are in common use. At the beginning of the Statement of Work (SOW), list of all pertinent abbreviations and acronyms should be provided.
- A separate section of the Statement of Work (SOW) should be included when it is significant to specify a division of responsibilities between the contractor and other agencies etc. That separate section should properly & clearly mention those responsibilities.
- Procedures should be specified properly. When it is not possible to take quick decisions then procedure should be included to make them possible.
- Over-specification should be avoided. On the basis of the kind of contract and nature of the work, the ideal situation may be to point out the required results or end-items to be delivered and allow the contractor to suggest his effective method.
- Clarity should be assured by describing requirements in detail both for practical application as well as legal reasons. It is simple to ignore many details. Also it is simple to become repetitious. Remain active of performing either. For each immediate action, for each report, for each deliverable item, do not mention something performed “as essential”. Rather mention whether the judgment is to be performed by the government or by the contractor. Remember that these kinds of contingent actions can have an influence on schedule as well as price.
- Incorporation of extraneous requirements and material should be avoided. Unnecessary cost is added by them. Common examples of issues in this area include data requirements. Unnecessary data requirements should be screened out. Only essential data requirements should be mentioned along with their required timing. It is suggested that data requirements should be mentioned individually in data requirement appendix.
- The specifications or requirements that are already mentioned in applicable documents should not be repeated. Rather, mention them by reference. If modification, amplification or exceptions are needed, the applicable portions should be particularly referenced and the change is described.
There are further some additional documents that include Checklists for Statement of Work. At last the Statement of Work preparation interpretation should be reviewed from the management perspective. Frequent reviews with the project and functional analysts should be held by the project manager for ensuring of the adequacy of the content during the preparation of the Statement of Work in order to ascertain the technical & data requirements mentioned do match the provided guidelines and sufficiently support the objective of common system. The completeness of the Statement of Work (SOW) should be analyzed by using the Contract Work Breakdown Structure (CWBS) / Statement of Work (SOW) (CWBS / SOW) matrix. For review of the functional and project managers, a final review team should be held to generate a draft Statement of Work (SOW) after all comments and inputs have been incorporated. Particular problems should be settled and changes made as suitable. If procurement is a major acquisition then a final draft should be prepared and reviewed with the program manager, contracting officer or with higher management. A briefing on the total Request for Proposal (RFP) package should be included in the final review. The concurrence of the other Government agencies or other program offices should also be obtained if they are involved in the procurement.