Statement of Work

12 October 2010

A properly documented and worded statement of work or SOW can be the difference in how well a project will progress thru the different stages of its development. This is a formal document that clearly states what a third party vendor will provide, at what time and in what quantities. The vaguer and more generic this formal document is, the great chance it will not provide the purpose it was intended to serve.

In most cases the template used to construct the statement of work will set the format and style of the document. Most project management software programs have one of these to assist the project manager in constructing this document correctly and professionally.

There are many areas of a project that are described in detail in the statement of work. These areas include the scope of the work being contracted for, the location to where it is to be done or delivered. One area that has to be very specific is the acceptance criteria of the raw material, work or components being described in this document.

The statement of work is a formal contract between a company and a third party vendor that is legal and binding. For this reason the information that is included in it must be very specific and focused. Any verbal agreements that are made between the two parties should also be included in this document so there is no ambiguity on any item or situation.

The purpose of the statement of work that is vital is the payment for the deliverable or work that will be completed. If a schedule is to be made so partial payments are to be made, this has to be stated.

Even though a project management template can help the manager construct the statement of work quickly, the review of this document should be done by all parties. This is important so both sides of this legally binding agreement understand what it contains before it is signed.

A statement of work is a very common document, but the seriousness of what it contains is very important. For this reason its construction and wording should never be taken lightly.