SOW: Here's How You Write the Heart of a Contract

Typically, the statement of work (SOW) serves as the heart of a contract, including all of the work requirements, acceptance criteria, payment terms, and metrics or milestones used to measure success.

A Statement of Work is important because?it ensures there is no misunderstanding between vendors and their clients when they come on board a project. An effective SOW also protects the client from their vendors suddenly claiming they were enlisted for different deliverables, a different project schedule, or other details than were originally agreed to.

A good statement of work contains many details, structured and logically relevant. This helps the negotiations to run more productive and faster. A well-organized statement of work helps you to save time (which, of course, is an important cost saving measure).

However, it’s important for organizations to understand that a SoW is not legally binding. As such, it is often accompanied by a formal legal contract that outlines the specifics of an agreement such as the parties, terms, reporting requirements, payment obligations, etc.

When a SoW is not accompanied by a legally binding contract, it is crucial for both parties to know and understand each other well so the transaction can be completed smoothly.

The SOW begins with the Scope Statement that describes the completed project. The SOW then goes on to provide detailed information on the deliverables. It will consist of several types of information when applicable:

• Purpose and scope of work?– the reason why you are taking up this project and the resources involved to get the work done.
• Deliverables and due dates
• Location of work?– the physical location where the work will take place.?This may not be necessary, but if the work is to be performed offshore, for example, it would be necessary to include this information.
• Tasks?that make up the deliverables
• Task responsibility distribution?– who each task is assigned to
• Deliverables timeline?– indicates when the work will begin, and when the team or organization must complete the task. Here, the project manager would consider specifying the maximum number of hours the organization is willing to pay for.
• Criteria for acceptance?– using objective criteria, the buyer can determine whether the product or service provided to them is acceptable.
• Payment schedule?– includes a breakdown of costs and payment deadlines that must be met

Want to learn more? Tonex offers SOW Writing Workshop, a 1-day course where participants ?learn the best approaches to effectively write each part of the SOW.

You will learn to see the SOW from the contractor’s perspective and anticipate any questions he or she may have.?

Additionally, participants learn best practices, analyze legal cases, and recognize the impact your work has on cost, schedule, and quality.

For more information, questions, comments,?contact us.