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Project Portfolio Management

What is a Statement of Work (SoW)?

Published By Team AdaptiveWork

There are a wide variety of documents that a project manager has to familiarize themselves with throughout the course of their career. Some of them will only apply to specific projects or when dealing with certain industries. Others however are nearly universal across all projects, such as a project plan or the project charter. Another of these common documents is the Statement of Work (SoW), but what is an SoW exactly?

statement of work

What is an SoW?

If you’re dealing with vendors or outside contractors a Statement of Work is a vital element in ensuring they hold up their side of the agreement. It sets out the parameters for your future relationship together and defines what is expected of them.

An SoW will often be initially submitted when a contractor is bidding for an open job or tender. The procurement officer or decision-making board for the project will review the Statement of Work to assess if the prospective vendor is capable of carrying out the work required within the scope of the project, and also whether or not they are a suitable fit for the organization. This is especially applicable when applying for government tenders, as SoWs are one of the most preferred formats for submitting projected work and requirements.

What does a Statement of Work consist of?

There are several details that make up a statement of work, some are always present, and others may be included or excluded depending on the nature of the work required or the industry. Here are the main ones to include:

Purpose of the Project: The business case for why the project is being implemented in the first place.

Scope of Work: This is an overall statement on everything the contractor will provide, including a basic overview of the deliverables, time-frame, cost and requirements. For example, IMG Graphics will deliver five poster designs within three weeks, for $12,000 and will need to be given access to our graphics and image catalogue and marketing briefs.

Location of Work: For many contractors, especially in technology or digital marketing, location can be far more flexible without having to worry about transport costs. This section outlines where people will do the work and also the location of equipment, software and even cloud-based systems.

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Milestones: This is where the two parties agree on what date the contractor should reach specific points by or hand over deliverables.

Deliverables: These are the actual end results of the project, i.e. what the vendor is expected to supply to the organization.

Schedule: An outline of the course of the project, including exploratory meetings, kick-off date, when milestones and deliverables are due and when project sign-off and closure is.

Applicable Standards: This outlines the regulatory or industry standards that need to be met while carrying out work. For example, they might include incorporating GDPR for technology work connected to Europe or sourcing Fairtrade ingredients for an ethical food producer.

Acceptance Criteria: What factors define success for the project.

Payment Schedule: How the contractor will be paid and when, i.e. after certain dates or after reaching certain milestones or handing over deliverables.

Closure: How the deliverables will be accepted and who signs off and ends the contract.

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Written by Team AdaptiveWork