PROJECT PLANNING (CONTD.)
The Statement of Work (SOW)
Guideline for Preparing Statement of Work (SOW)
21.1 The Statement of Work (Sow):
As already mentioned in Lecture 15, the Statement of Work (SOW)
is a narrative description of
the work required for the project. The complexity of the
Statement of Work (SOW) is
determined by the desires of top management, the customer,
and/or the user groups. For projects
internal to the company, the Statement of Work (SOW) is prepared
by the project office with
input from the user groups. The reason for this is that user
groups tend to write in such scientific
terms that only the user groups understand their meaning. Since
the project office is usually
composed of personnel with writing skills, it is only fitting
that the project office prepares the
Statement of Work (SOW) and submit it to the user groups for
verification and approval.
In case of projects external to the organization, as in
competitive bidding, the contractor may
have to prepare the Statement of Work (SOW) for the customer
because the customer may not
have a team of people trained in its preparation. In this case,
as before, the contractor would
submit the Statement of Work (SOW) to the customer for approval.
It is also quite common for
the project manager to rewrite a customer's Statement of Work
(SOW) so that the contractor's
line managers can price out the effort.
As far as a competitive bidding environment is concerned, the
reader should be aware of the
fact that there are two Statements of Works (SOWs)— the
Statement of Work (SOW) used in
the proposal and a “Contract Statement of Work” (CSOW). There
might also be a proposal
“Work Breakdown Structure” (WBS) and a “Contract Work Breakdown
Special care must be taken by contract and negotiation teams
that all discrepancies between the
Statement of Work (SOW)/ Work Breakdown Structure (WBS) and
Contract Statement of
Work (CSOW)/ Contract Work Breakdown Structure (CWBS) are
discovered, or additional
costs may be incurred. A good (or winning) proposal is
that the customer or
contractor understands the Statement of Work (SOW). For large
projects, fact-finding is usually
required before final negotiations because it is
that both the customer and the
contractor understand and agree on the Statement of Work (SOW),
what work is required, what
work is proposed, the factual basis for the costs, and other
related elements. In addition, it is
imperative that there be agreement between the final Contract
Statement of Work (CSOW) and
Contract Work Breakdown Structure (CWBS).
It is important to note that the Statement of Work (SOW)
preparation is not as easy as it sounds.
Consider the following:
• The Statement
of Work (SOW) says that you are to conduct a
of fifteen tests to
determine the material properties of a new substance. You price
out twenty tests just to
"play it safe." At the end of the fifteenth test, the customer
says that the results are
inconclusive and that you must run another fifteen tests. The
cost overrun is $40,000.
• The Navy gives
you a contract in which the Statement of Work (SOW) states that the
prototype must be tested in "water." You drop the prototype into
a swimming pool to test it.
Unfortunately, the Navy's definition of "water" is the Atlantic
Ocean, and it costs you $1
million to transport all of your test engineers and test
equipment to the Atlantic Ocean.
• You receive a
contract in which the Statement of Work (SOW) says that you must transport
goods across the country using "aerated" boxcars. You select
boxcars that have open tops so
that air can flow in. During the trip, the train goes through an
area of torrential rains, and the
goods are ruined. The customer wanted boxcars that were aerated
from below. The court is
currently deciding who should be blamed for misinterpretation of
the word "aerated."
These three examples show that misinterpretations of the
Statement of Work (SOW) can result
in losses of hundreds of millions of dollars a year. Common
causes of misinterpretation are:
- Mixing tasks,
specifications, approvals, and special instructions
- Using imprecise
language ("nearly," "optimum," "approximately," etc.)
- No pattern,
structure, or chronological order
- Wide variation
in size of tasks
- Wide variation
in how to describe details of the work
- Failing to get
Note that misinterpretations of the statement of work can and
will occur no matter how hard the
quest for perfection during the definition phase. The result is
creeping scope, or, as one
telecommunications company calls it, "creeping elegance." The
best way to control creeping
scope is with a good definition of the requirements up front.
Unfortunately, this is not always
For example, in some industries, such as aerospace, defense, and
System, creeping scope had become a way of life until recently.
In the Information Technology
Group of a major appliance manufacturer, the project manager
made it clear that she would not
accept any scope changes once the definition of the requirement
(prepared by the user group)
was completed. Midway through the project, the user group tried
to change the requirements.
The project manager refused to accept the changes and, against
the wishes of the user group, put
all requests for changes into a follow-on enhancement project
that would be budgeted for and
the initial project was
completed. When the initial project was completed and
installed at the user's location, the users stated that they
could live with the original package,
and the enhancement project was neither funded nor approved.
Keeping the above-mentioned factors in view, today, both private
industry and government
agencies are developing manuals on SOW preparation.
21.2 Statement of Work (Sow) Preparation Guidelines:
1. Firstly, every Statement of Work (SOW) that exceeds two pages
in length should have a
table of contents conforming to the Contract Work Breakdown
Structure (CWBS) coding
structure. There should rarely be items in the Statement of Work
(SOW) that are not shown
on the Contract Work Breakdown Structure (CWBS); however, it is
necessary to restrict items to those cited in the CWBS.
2. For the preparation of Statement of Work (SOW), clear and
precise task descriptions are
essential. The Statement of Work (SOW) writer should realize
that his or her efforts will
have to be read and interpreted by persons of varied background
(such as lawyers, buyers,
engineers, cost estimators, accountants, and specialists in
security, audit, quality, finance, and contract management). A
good Statement of Work
(SOW) states precisely the product or service desired. The
clarity of the Statement of Work
(SOW) will affect administration of the contract, since it
defines the scope of work to be
performed. Any work that falls outside that scope will involve
new procurement with
probable increased costs.
3. One of the most important things to keep in mind when writing
a Statement of Work
(SOW) is the most likely effect the written work will have upon
the reader. Therefore, every
effort must be made to avoid ambiguity. All obligations of the
government should be
carefully spelled out. If approval actions are to be provided by
the government, set a time
limit. If Government-Furnished Equipment (GFE) and/or services,
etc., are to be provided,
state the nature, condition, and time of delivery, if feasible.
4. It is essential to remember that any provision that takes
control of the work away from the
contractor, even temporarily, may result in relieving the
contractor of responsibility.
5. Use active rather than passive terminology in specifying
requirements. Say that the
contractor shall conduct a test rather than that a test should
be conducted. In other words,
when a firm requirement is intended, use the mandatory term
"shall" rather than the
permissive term "should."
6. Always remember to limit abbreviations to those in common
usage. Provide a list of all
pertinent abbreviations and acronyms at the beginning of the
Statement of Work (SOW).
When using a term for the first time, spell it out and show the
abbreviation or acronym in
parentheses following the word or words.
7. When it is important to define a division of responsibilities
between the contractor, other
agencies, etc., a separate section of the Statement of Work
(SOW) (in an appropriate
location) should be included and delineate such
8. Do not forget to include procedures. When immediate decisions
cannot be made, it may be
possible to include a procedure for making them (e.g., "as
approved by the contracting
officer," or "the contractor shall submit a report each time a
9. Do not over-specify. Depending upon the nature of the work
and the type of contract, the
ideal situation may be to specify results required or end-items
to be delivered and let the
contractor propose his best method.
10. It is important to describe requirements in sufficient
detail to assure clarity, not only for
legal reasons, but also for practical application. It is easy to
overlook many details. It is
equally easy to be repetitious. Beware of doing either. For
every piece of deliverable
hardware, for every report, for every immediate action, do not
specify that something be
done "as necessary." Rather, specify whether the judgment is to
be made by the contractor
or by the government. Be aware that these types of contingent
actions may have an impact
on price as well as schedule. Where expensive services, such as
technical liaison, are to be
furnished, do not say, "as required." Provide a ceiling on the
extent of such services, or
work out a procedure (e.g., a level of effort, pool of
man-hours) that will ensure adequate
11. Avoid incorporating extraneous material and requirements.
They may add unnecessary cost.
Data requirements are common examples of problems in this area.
Screen out unnecessary
data requirements, and specify only what is essential and when.
It is recommended that data
requirements be specified separately in a data requirements
appendix or equivalent.
12. Do not repeat detailed requirements or specifications that
are already spelled out in
applicable documents. Instead, incorporate them by reference. If
modification, or exceptions are required, make specific
reference to the applicable portions
and describe the change.
In addition to the guidelines, some preparation documents also
contain checklists for
of Work (SOW) preparation.
A checklist is furnished below to provide considerations that
Statement of Work (SOW) writers should keep in mind in preparing
statements of work:
1. Is the Statement of Work (SOW), when used in conjunction with
the preliminary Contract
Work Breakdown Structure (CWBS), specific enough to permit a
contractor to make a
tabulation and summary of manpower and resources needed to
accomplish each SOW task
2. Are specific duties of the contractor stated so he will know
what is required, and can the
contracting officer's representative, who signs the acceptance
report, tell whether the
contractor has complied?
3. Are all parts of the Statement of Work (SOW) so written that
there is no question as to what
the contractor is obligated to do, and when?
4. When it is necessary to reference other documents, is the
proper reference document
described? Is it properly cited? Is all of it really pertinent
to the task, or should only portions
be referenced? Is it cross-referenced to the applicable
Statement of Work (SOW) task
5. Are any specifications or exhibits applicable in whole or in
part? If so, are they properly
cited and referenced to the appropriate Statement of Work (SOW)
6. Are directions clearly distinguishable from general
7. Is there a time-phased data requirement for each deliverable
item? If elapsed time is used,
does it specify calendar or work days?
8. Are proper quantities shown?
9. Have headings been checked for format and grammar? Are
subheadings comparable? Is the
text compatible with the title? Is a multi decimal or
alphanumeric numbering system used in
the Statement of Work (SOW)? Can it be cross-referenced with the
Breakdown Structure (CWBS)?
10. Have appropriate portions of procurement regulations been
11. Has extraneous material been eliminated?
12. Can Statement of Work (SOW) task/contract line items and
configuration item breakouts at
lower levels be identified and defined in sufficient detail so
they can be summarized to
discrete third-level Contract Work Breakdown Structure (CWBS)
13. Have all requirements for data been specified separately in
a data requirements appendix or
14. Have all extraneous data requirements been eliminated?
15. Are security requirements adequately covered if required?
16. Has its availability to contractors been specified?
Lastly, but most importantly, there should be a management
review of the Statement of Work
(SOW) preparation interpretation. During development of the
Statement of Work, the project
manager should ensure adequacy of content by holding frequent
reviews with project and
functional specialists to determine that technical and data
requirements specified do conform to
the guidelines herein and adequately support the common system
objective. The Contract Work
Breakdown Structure (CWBS)/ Statement of Work (SOW) (CWBS/SOW)
matrix should be
used to analyze the Statement of Work (SOW) for completeness.
After all comments and inputs
have been incorporated, a final team review should be held to
produce a draft Statement of
Work (SOW) for review by functional and project managers.
Specific problems should be
resolved and changes made as appropriate. A final draft should
then be prepared and reviewed
with the program manager, contracting officer, or with higher
management if the procurement is
a major acquisition. The final review should include a briefing
on the total Request for Proposal
(RFP) package. If other program offices or other Government
agencies will be involved in the
procurement, obtain their concurrence also.