Getting Statements of Work Right

You can draft the best, most protective contract in the world, but if the statement of work (SOW) fails to adequately describe the deliverables and the services to be rendered, the project can fail, cost overruns can result, and project schedules not achieved.  It is amazing how much time and effort goes into drafting an appropriate agreement for an engagement, but so little time spent on the key business documents, particularly the SOW.  The SOW is the roadmap for the engagement.  The parties should take appropriate care in ensuring it accurately reflects the specific tasks and obligations each party will have during the course of performance.  Because so few SOWs are drafted properly, I thought it would be useful in this and the following entries in my blog to provide a checklist of key SOW elements.

This week, we will talk about the scope of work and business requirements.  In drafting the SOW the following should be kept in mind:

  • Detailed explanation of each party’s tasks and obligations.  This explanation should be written such that someone unrelated to the project who is familiar generally with technology could understand the services and deliverables to be provided by the contractor.  Avoid excess use of jargon and our terms, unless such terms are clearly defined in the Statement of Work.

  • Include a project plan with a clear project schedule.  All dates must be able to be readily calculated.  Avoid referring to dates as “estimates.”  Avoid calculation of all dates from the “beginning of the project,” without the date of that being clearly defined.

  •  Include functional and technical specifications 

     
  • Remove or limit extensive lists of contingencies on the contractor’s performance.  Carefully review and limit any contractor “assumptions” in the SOW. The vast majority of contingencies are very general in nature and would create a substantial “out” for the contractor or, at least, provide the means for the contractor to charge additional fees.

  • Avoid references to an associated proposal.  Proposals may contain legal terms that could conflict with the negotiated agreement.  If content in the proposal is relevant, it should be directly incorporated into the SOW.  

  • Remove language that would allow the SOW to override or conflict with the underlying agreement.  

  • Ensure the language in the SOW conforms to the underlying agreement.  This means making sure defined terms used in the agreement are also used in the Statement of Work.

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