How to Create a Statement of Work Outline
According to project management experts and entities, most Statement of Work Outline forms share some basic components, regardless of industry. It is important to discuss what needs to be included in each section. Common elements of an SOW or Statement of Work Outline include:
- Project objectives
- Project scope
- Major Deliverables
- Tasks that support the deliverables, and which party will complete them
- Timeline for completion of work
- Location of work and resources, equipment, and facilities needed
- Payment costs, terms, and deadlines
- Internal and external standards and guidelines
- Criteria used to determine whether deliverables are acceptable and how they will be accepted
- Signatures of both parties
Three Types of Statements of Work
There are three different categories of SOWs, some of which may be more popular than others in different industries. The main types are:
Design/Detail Statement of Work
This category of SOW tells the vendor, contractor or supplier exactly how to do the work and what processes to follow. It clearly defines the buyer, client or entity’s requirements, whether they be materials, measurements, quality control requirements, or something else. This type of SOW is often used in government contracts, where contractors are required to follow specific regulations, and is the preferred SOW for manufacturing or construction projects.
In this type of SOW, the buyer, client or entity assumes most of the risk, since the contractor is obligated to follow the standards laid out for them.
Level of Effort/Time and Materials/Unit Rate Statement of Work
This is a flexible SOW that is frequently used for hourly service workers. It is simply based on work hours and the material needed to perform the service. The SOW describes the service being performed over a given period of time in a general way. It is often used for temporary or contract workers, or for delivery order contracts.
Performance-Based Statement of Work
This is the preferred type of SOW by most government entities and the standard SOW for most American and Canadian government procurements. It covers the purpose of the project, the resources and equipment that will be provided, and the quantifiable end results. However, it does not tell the contractor how to perform the work. This SOW offers the most flexibility in terms of how the contractor works and focuses on outcomes over processes.
In this model, more accountability is placed on the contractor or supplier, since they are responsible for delivering results using whatever methods they think are most effective.
So what is the Best way to Create a Statement of Work?
- Risks of an incorrect SOW – An SOW is a document with legal weight, which is used in the contract creation and management process. As a result, there are real legal, financial, and operational risks for an organization that writes an SOW improperly. For example, if the client is unclear in their specifications, which causes the contractor to perform the work improperly, a legal battle could ensue over which party is responsible for correcting the mistakes—and both parties’ reputations could be at risk. For this reason, a good professional Construction Consulting firm, one well versed in SOW’s such as Nationwide Consulting, LLC may be a cost saver in the long run in more ways than one.
- Time commitment – Writing an effective SOW can be a time-consuming process. Due to the risks involved, a project should not be rushed, nor should any shortcuts be taken. Using a professional Construction Consulting firm like Nationwide Consulting, LLC will save the learning curve involved in proper formatting and inclusion of an SOW. In fact the whole process can be transparent to you as it becomes a function of the Construction Consulting firm, if you so desire.
- Expertise – If you don’t have the knowledge and experience to write an SOW, it can be hard to find qualified writers who understand all the guidelines and requirements. The SOW is typically written by larger clients, but authors may vary, and more than one author may participate. This may include anyone from the project manager to a third-party. A good experienced consulting firm can help coordinate in this situation, and Nationwide Consulting, LLC has on too many projects to mention here over the last 3 decades.
Nationwide Consulting, LLC can help with all aspects of SOW’s as well as SOO, RFP or any other contracts and bid offerings that may be needed. Give us a call to discuss your next project, you will discover a firm, qualified, licensed and ready to serve all you Construction and Development needs based in Central Florida, but a quick flight to anywhere in the world. No project is too large, but we can help with the smaller ones as well, call us today: 407-688-2657