Table of Contents
‘A document that provides a description of a given project’s requirements. It defines the scope of work being provided, project deliverables, timelines, work location, and payment terms and conditions.’ Moreover, it is a fundamental piece of a Request for Proposal (RFP) and describes what the company is looking to achieve as a result of the RFP. Quite an undertaking! So, let’s take a look at why a SOW is so important for your business RFP plans. You will usually use a statement of work when you can describe work according to specific instructions or directions. Likewise, you should have tasks, conditions, and requirements that both parties can easily understand when creating an SOW. Put simply:
** Although the statement of work and the scope of work are often abbreviated the same, SOW, they are not the same thing. The scope of work is a subsection of the statement of work. It describes how the project will be achieved and can be used by all involved to determine the progress and eventual success of a project.
In a word, yes. A statement of work is legally binding, but it is not the same as a formal contract which would be signed by the parties at the end of a contracting process. It is a separate section within a contract and can be thought of as the formal foundation of the final contract and will be agreed upon and signed by the parties involved. The SOW ensures that both parties have established a common ground and have an understanding, in clear and concise terms, of what is expected of them over the life cycle of the project.
There are three types of SOWS, and these are:
This type of agreement is frequently used in government, construction, and manufacturing and provides a detailed description of how the project is to be accomplished. The government entity, or individual/company requiring services, clearly defines how the work is to be done and what is required to do so. If an individual is contracted to perform a task, the SOW will precisely outline what materials to use, required dimensions, assembly instructions, and project deadlines. Because the contractor is instructed to follow detailed guidelines for operation, the buyer, client, or entity bears most of the risk.
A Level of Effort SOW, also known as a time and materials/unit rate statement of work, outlines the hourly service fee and materials required to perform a task. Because of its flexible guidelines and general task description, it is well-suited for short-term or temporary contracted services.
This is a common type of SOW used by American and Canadian businesses in both the public and private sectors. Performance-based SOWs focus on performance rather than “how” the service is completed. These SOWs detail the project’s purpose, resources, results expected, and quality. In other words, a performance-based SOW focuses on what is completed. And because there is an absence of micromanagement here, the liability rests with the contractor.
The Statement of Work would usually be written by the client, but this may vary, and more than one author may participate. For example, the project manager and the client, as one of them is usually providing the product and the other is contracting the same. It may include anyone from the project manager to a third-party contractor to the Chief Information Officer in the case of IT and software development projects.
The main benefits, it could reasonably be argued, are probably the most obvious ones; a well written SOW will prevent conflict down the line and keep your costs on track.
Joking aside, being clear, concise, and paying attention to detail when writing your statement will do more than simply avert disagreement. Spending time and effort in preparation will, in turn, save time and avoid delays to the project. It will help to avoid ‘scope creep’. By including all of your information in a SOW, you will make sure you are covered for insurance reasons, as well as fines, penalties (for delays and overruns for example) and lawsuits. Further benefits can include
A well-presented statement of work will help to underpin your reputation for professionalism, attention to detail, and reliability. It will establish trust with a client, showing you are serious about the work you do. This will help to build good relationships and help to secure future clients.
Your statement will cover the entire landscape of a project. It will be detailed and precise. Will take time and effort. It is a document of great benefit to all parties. Therefore, although it must be prepared before the project begins, it is not a good use of anyone’s time to prepare a SOW when a client is still making up their mind. Get all your deliverables agreed upon first!
The above list is not a definitive one and it may appear a little daunting. We can simplify this even further with some clear pointers for structuring your SOW:
Although there are no secrets to success, it is the result of preparation, hard work, and learning from failure (Colin Powell), spending time and effort on a well-written SOW is never time wasted!
Creating RFP proposals yourself and putting your business into words can be challenging. This can be especially daunting when you consider your potential competitors.
Get in touch with Hudson Succeed now for help in constructing high-quality, persuasive proposals!
You are one step closer to providing your services to the best in the business. Tell us what you are looking for and get a free quote from us today!
All information and data on this blog site are for informational purposes only. Hudson Outsourcing LLC makes no representations as to accuracy, completeness, suitability, or validity, of any information. Hudson Outsourcing LLC will not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. All information is provided AS IS with no warranties and confers no rights.
Hudson Outsourcing LLC will not be responsible for any material that is found at the end of the links that may be posted on this blog site.
Because the information on this blog is based on Hudson Outsourcing LLC’s own opinion and experience, it should not be considered professional financial investment advice. The ideas and bidding strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Hudson Outsourcing LLC’s thoughts and opinions will also change from time to time as the market changes and as Hudson Outsourcing LLC develops.
