A Statement of Work (SOW), also referred to as Statement of Requirements (SOR), is a detailed description of the goods and/or services to be supplied under a contract. The job of the document is to clearly stipulate all services and deliverables required to fulfill a contract by defining the tasks or services to be completed in clear, concise and unambiguous terms.
As the SOW is the underpinning of contracts and is used to resolve disputes between purchaser and vendor, all details and requirements must be explicitly defined, leaving no assumptions or uncertainty.
A good SOW will clearly define the scope, nature, and quality of the good or service required. A good Statement of Work should:
Be written in the imperative mood. What’s an “imperative mood”? In English grammar, imperative mood is a verb form that inflects a direct command or request and can include orders, instructions, warnings, and advice.
Adhere to any regulations, policies, rules or legal framework regulating the specific goods and services to be procured.
Be clear and complete.
Be drafted in a manner that allows for fair and free competition between vendors.
Is the SOW really that important?
As establishing an SOW can be arduous and time-consuming, it is tempting to leave it until the very end to buy you more time to consider desired outcomes and inclusions, expecting that requirements will “come out in the wash” during the procurement or project development phase. While it’s true that defining exact goals and detailed requirements may be the most difficult part of a project, a solid SOW is crucial for a project’s overall success.
Instead of being thought of as an evil necessity, SOWs should be prioritized and valued, presenting an opportunity for risk mitigation. In addition, by providing potential tenderers with ALL the information they need to determine if they can perform the required work and estimate costs, vendors are empowered to create value.
While it is often undervalued and maybe even be altogether forgotten, an effective SOW is more than just paperwork. The SOW represents an opportunity to remove obstacles by providing parties with the chance to thoroughly decipher, plan and communicate needs. It is fundamental to effective project execution and implementation, achieving objectives, and ultimately, extracting maximum value from the contract. Simply stated, a project lacking a clear and effective SOW is much more likely to fail, or at the very least, achieve more limited outcomes for both parties.
Therefore, rather than being left to the tail end and rushed through, the SOW should be developed during the initial project stages, allotting the time necessary to give careful consideration to everything you want to ensure to achieve. If designed correctly, the SOW can be leveraged for more effective contract negotiations.
The SOW should be considered the framework that guides procurement throughout the procurement lifecycle. During the vendor selection process, the SOW should be used to assist in preparing tenders and evaluating responses. Once negotiated with the selected vendor, the SOW should also play a central role in contract creation, implementation, and management, stating what the contractor must deliver to receive payment and critical evaluation criteria tracking progress and, ultimately, evaluating project success.
How to Create an Effective Statement of Work for Optimized Outcomes
To optimize outcomes, you’ll want to elevate your statement of work from simply good to highly effective.
So, what should be included in an effective SOW?
As we previously mentioned, the SOW should intelligibly state the outcomes you’re looking to achieve, the breadth of the work and all requirements that must be satisfied. But what is just as imperative for optimizing success is what is not to be included.
Unless your project has very specific constraints or requirements required by internal or external policies or regulations, instead of explaining exactly what is currently happening, you’ll want to leave room for vendors to think “outside the box” in how they can deliver value.
Vendors are experts in what they do and should have esoteric knowledge that allows them to innovate and advocate the most effective and efficient way to meet outcomes while providing you with the best value for your money.
To do this, ensure your tender avoids telling bidders exactly how they are to perform the work. Instead, focus on final objectives and requisite outcomes when approaching the market. This will enable tenderers to suggest different, perhaps more advantageous, options.
The High Costs of Over-Specifying
Yes, a high-value contract may garner the attention of potential vendors. But suppose you overplay your cards by overspecifying or overstating your requirements or listing overly ambitious or technically unachievable demands. In that case, you may not only be inadvertently adding unnecessary costs but dissuading potential tenderers from participating in the tendering process at all.
The tendering process can be a high-resource time-constraining endeavour filled with potential risk. If the project itself is deemed to have a high risk of failure, potential tenderers may opt to simply mitigate the risk of any resulting damage to their reputation and opt out of the process.
To attract tenders and maximize outcomes, you’ll want to avoid creating unnecessary obstacles. Therefore, when determining what is truly essential, ensure you take time to separate the “nice-to-haves” from the “must-haves,” giving careful consideration to potential impacts on costs.
That being said, you still need to ensure all relevant information, functional requirements, and documentation are included, along with a full description of the nature and scope of what is to be procured. This should include quantity of goods, requirements to be fulfilled, technical specifications to be adhered to, plans, drawings, instructional materials, certifications of conformity, etc.
Although you may want to sideline it, a robust, carefully planned and executed SOW created at project kickoff can set you on the path to success and is critical to effective tendering and optimized contract outcomes. It is the essential framework for getting the best value for every dollar, and it’s important to get them just right. For your training and consulting needs on public sector procurement, we welcome you to explore our offerings at https://theprocurementschool.com/public-sector-procurement-program-pspp-trainingforme/
By The Procurement School A Statement of Work (SOW), also referred to as Statement of Requirements (SOR), is a detailed description of the goods and/or services to be supplied under a contract. The job of the document is to clearly stipulate all services and deliverables required to fulfill a contract by defining the tasks or […]
The era of whistleblowing and the need for transparency and supportive legislation in public procurement By The Procurement School Whistleblowers can change the world. And the world needs changing. As dramatic as it may sound, real change requires brave actions and loud voices. However, unveiling corruption and fraud can come with repercussions and grave consequences, […]
By The Procurement School On September 21, 2021, Justin Trudeau, Canada’s Liberal party leader, was re-elected with a minority Government. As Trudeau will be leading the country for the next 18 months, we thought we would look at what re-election means for public procurement. It seems the Liberals are investing heavily into keeping up with […]
As a company that provides education in public procurement, this is perhaps the most common question that arises. While there are many similarities, the nuances of public legislation and free trade requirements create a procurement environment that is more regulated, demands a greater level of transparency, and requires vigilance to stay on top of the constantly […]
Staying Safe in Uncertain Times As many of our valued clients have now implemented pandemic protocols, we thought the following information from the Canadian Bar Association on the legal implications for the workplace might be useful: Here is also some useful information on the business and legal implications of Covid-19 from Blakes: With respect to […]
Expanded Impact of Trade Agreements Although they have been in place for two years, we are just beginning to see the impact of the new trade agreements in Canada. When the single point of access (“SPA”) mechanism is implemented by the Federal government then all bidders will be able to see all opportunities in Canada, […]
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.