“Dear Elizabeth: I am working with a vendor and they have sent over a statement of work (SOW) for me to review. The problem is that I don’t know what I’m looking for. What should I take note of in the document so I can give them feedback and also protect the interests of the company and project going forward?”
Statements of work are very common in project management, so you are going to come across many more in your career. A SOW is a description of what the project is going to deliver and how the work is going to be done. You’ll often have a master services agreement too, which includes all the main contractual requirements and clauses. That frees up the SOW to focus solely on the description of the project work.
Let’s consider what you should be looking out for in your SOW.
The most important aspect of the SOW is the scope. The overall objective listed in the SOW should make sense and support what you have asked the vendor to do.
Check to make sure the documented, detailed scope aligns to what you think the scope should be, and includes everything. Dependencies on other tasks or projects should also be included so you can adequately manage them together.
There should also be a statement of what is explicitly excluded from the scope. The more detail the better!
2. Timelines and resourcing
The second thing to consider is the timeline laid out in the SOW. Does it fit with your expectation of project delivery dates? Are there requirements made of your team that you need to achieve by a certain date, for example, provision of brand assets or making resources available? And can you meet those?
Check that the vendor has specified a date from which the work can begin, or at least made a statement like, ‘within three weeks of the SOW being approved’. Lead times for starting work can often be quite long because they might have other projects with different clients to finish first.
Talking of resourcing, check whether you are securing dedicated resources to complete the work, or whether these will be shared with other clients. Typically, if the resource is available to you only on a part-time basis, they will be doing other chargeable work for other clients during the rest of their time. That might be OK by you, but if you need people to be constantly available, you may want to challenge that assumption and negotiate exclusive use of their resources during your project.
Rates of pay for each resource should be included, especially where these are on a per-project basis or different to the rates agreed in the master services agreement, if you have one.
The SOW should also include payment milestones and how these are linked to time and deliverables. Check you are clear about when they expect to be paid – and that you are happy to meet those expectations.
The SOW should also talk about project governance.
Check that the change control process is documented, along with risks, assurance, and quality measures. The SOW should clearly state who owns the deliverables (although this might be covered by the master services agreement).
You can ask them to include any performance measures or warranties that you feel are appropriate so that both parties understand how success will be judged.
Project documentation often includes assumptions, and the SOW is no different. If there aren’t assumptions clearly documented, ask them to make their assumptions explicit. For example, do they need you to have any base infrastructure or processes in place before their solution can work?
If they have documented assumptions, are you OK with what they have written? Check the assumptions do not limit your ability to complete the work the way you want to.
The process for getting deliverables approved should also be included, along with a list of stakeholders or roles with authority to sign off on deliverables and approve payment milestones.
4. Working practices
Check that their working practices are documented clearly and that they meet your expectations. Things to check include:
- What location do they assume they will be based in? If one of your locations, can you support that? If not, where do you want them to be working from, and how much time on site are you anticipating?
- What are their standard working hours? If the contractor is based abroad, will they be working your local hours or theirs? Will they be taking their national holidays off, or working to your national holiday timetable?
- What is the legal jurisdiction for disputes? (This might be included in the master services agreement.)
- What software will they be using to track their progress? Do you want them to use your project management tools?
- Do you need a non-disclosure agreement or any other documentation related to intellectual property and confidentiality?
- Is there a code of conduct for behavior that your own team adheres to that you would expect the vendor to adhere to as well?
The answers to these questions won’t stop the project going ahead, but they help both sides understand expectations and start the working relationship with an appreciation of how it is going to unfold.
5. Anything unclear
Finally, look for things you don’t understand. Question anything where the language is unclear or uses too much jargon. The success of the project depends on whether the SOW is comprehensive and clear, so ask for clarification if there are clauses that don’t make sense to you.
Assess whether or not what is written in the SOW is reasonable. Does the overall document feel like a partnership, or does it feel weighted towards their commercial expectations (or yours)? Once you have read through the SOW, go back to the master services agreement and check anything that isn’t in the SOW is adequately covered in there. If it is, the SOW should make reference to the relevant clause or information. If it isn’t, ask the vendor to add the information.
Statements of work can be amended, but that’s a project management effort you could do without. The best approach is to make sure the SOW is complete and useful. Then get it approved by both parties and get to work!