What is Statement of Work (SOW)?

The answer to the question of ‘What is Statement of Work (SOW)’ or Statement of Work Definition is simple:

“A Statement of Work is that statement that outlines specific services a supplier is expected to perform, by indicating the type, level and quality of service, as well as the time schedule required”

What’s important is that most conflicts and problems in contract execution result from writing the statement of work (SOW) poorly. So it is essential that if you are involved in contract administration, you need to first understand statement of work definition, then be able to analyze the SOW, plus understand SOW types and finally the 3 common SOW formats – all explained below.

What are Statement of Work (SOW) types?

The basic types of SOW fall mainly into 3 categories:

1. Design/Detail Statement of Work (SOWs)

This type of SOW tells the supplier how to do the work. The statement of work defines buyer requirements that control the processes of the supplier. For example this may include precise measurements, tolerances, materials, quality control requirements etc.

What is important in this SOW type is that the buyer bears the risk of performance, since the buyer requires the contractor to follow buyer’s way of performing the task or making the equipment.

2. Level of Effort or Time & Materials or Unit Rate SOW

This SOW type can be written for almost any type of service. The real deliverable under this type of contract is an hour of work and the material required to perform the service, research repair, development etc.

3. Performance Based Statement of Work (SOW)

This statement of work defines those contracts where a performance based statement of work structures all aspects of an acquisition around the purpose of the work to be performed or equipment to be supplied and does not dictate how the work is to be accomplished.

Out of all 3 types this is the most preferred method of stating the needs in a Statement of work.

Statement of Work (SOW) Format

The format of a statement of work generally include 3 parts:

1. Scope

This simply includes a statement about what the SOW covers.

2. Applicable Documents

All the documents invoked in the requirements of the SOW must be listed in this section by document number and title.

3. Requirements

The arrangement of technical tasks and subtasks within the Requirements section will be dictated by program requirements.

Based on all we discussed above, what is statement of work is a question that can be defined simply. However while SOW is simple to define, it requires much time and effort to write, use & implement an effective SOW. Plus, statement of work is only one part of the whole contract management process, which is much bigger.

To then fully understand SOW as part of the management & administration process, download the “Contract Management & Administration Guide” which outlines how to make sense of the whole contract management process, SOW’s and provides clear guidelines on what you need to do when managing contracts. Click here to download the Guide.

 

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