6 October, 2022

What is a Statement of Work (SOW)? | Video

A Statement of Work – often abbreviated to SOW – is a detailed and structured statement of requirements. But what does that mean, and what are the different types of Statement of Work?

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What a Statement of Work Contains

A statement of work – often abbreviated to SOW – is a detailed and structured statement of the requirements, in terms of the:

  • work to carry out
  • products to deliver
  • deadlines or milestones to meet 
  • and processes or procedures that you must comply with

Most often, a Statement of Work is a contractual document – usually as an appendix to the main body of the contract. This allows the contract to be largely standard, with the SOW setting out the detail of what is to be done.

Other Things in a Statement of Work

Of course, an SOW can also include any other matters that the contracting parties consider essential or useful. These could include:

  • background to the project 
  • specifications for the deliverables, or acceptance criteria
  • financial measures
  • managerial and oversight procedures
  • assumptions and variables
  • dependencies and constraints
  • payment terms
  • Work locations

Why We Use Statements of Work

The intention behind a Statement of Work is to reduce risk through clarity and explicit expectations. The parties discuss, negotiate, and agree to the details and then document them in a rigorous way – and often in a highly structured format.

Creating a Statement of Work

To develop your SOW, you would naturally start with a Work Breakdown Structure. And it makes a lot of sense to reconcile your SOW to your WBS Dictionary. We have a video on creating a Work Breakdown Structure.

Contractual Basis of a Statement of Work

Sometimes, a Statement of Work is issued with an Invitation to Tender (ITT) or Request for Proposal (RFP). At other times, these may include looser descriptions of the requirement, with the last details being in the agreement as part of the final contract negotiations. 

As you may expect, more formal processes – like those used by Government or international organizations – tend to favor the former approach. We have a video on the tender process.

Alternative Forms of Statement of Work

What I have described so far is the most common form of a Statement of Work. It is often known as a detailed SOW, or a Design SOW.

The alternatives are:

Level of Effort Statement of Work

This SOW is appropriate for describing a service where what matters to the client are input measures, like:

  • work hours 
  • materials to use
  • staffing levels

This could apply, for example, in a portering or janitorial context. In the project world, consultancy contracts or contracts for freelance contractors often take this form.

Alternatives to a Statement of Work

At the opposite end of the spectrum are alternatives to the Statement of Work principle, like:

  • Statements of Objectives (SOO) 
  • Performance Work Statements (PWS) 

These are becoming more popular because of their performance-based emphasis on outcomes and standards. However, occupying something of the center ground are…

Performance-based Statement of Work

This is much the same as a design SOW, but provides no specification of how the work needs to be performed. Of course, in the real world, a Performance-based SOW may still relate to certain mandatory compliance-related procedures.

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Mike Clayton

About the Author...

Dr Mike Clayton is one of the most successful and in-demand project management trainers in the UK. He is author of 14 best-selling books, including four about project management. He is also a prolific blogger and contributor to ProjectManager.com and Project, the journal of the Association for Project Management. Between 1990 and 2002, Mike was a successful project manager, leading large project teams and delivering complex projects. In 2016, Mike launched OnlinePMCourses.
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