Project Management Practitioner Course Lesson 24: Statement of Work
Before we get started, I need to qualify a reference that may not be consistent with the Project Management Institute (PMI). From time to time the term “government” will be used and the descriptions of how the SOW is used may be slightly different from that of most private/commercial sector businesses. Government is in direct reference to United States federal government and U.S. military project and program management environments. Therefore, anytime the word “government” is used, it is in reference to U.S. federal and military organizations. The U.S. Department of Defense has its own Extension, to the Project Management Body of Knowledge (DoD Ext-PMBoK) that mirrors much of what is in the PMI PMBoK; however, it is adapted to include and tailor the content to government and military needs.Credit: Cory Stophlet, 2014
Statement of Work (SOW) is a commonly used term in project management, and yet, its role and long reaching impacts are not always recognized. In this Project Management Practitioner lesson we will look at definitions, the role and flow in procurement, brush on government procurement and contracting, and considerations for inclusion of relative information impacting the strategy, business case, scope and reporting. We will finish up with a few comments on consultant assistance and lessons learned.
This is one of those times I prefer to quote the Project Management Institute’s doctrinal definition: thus, “The project statement of work (SOW) is a narrative description of products, services, or results to be delivered by a project.” (PMBoK 68)
The definition is simple enough but the implications of this term are monumental. It is the primary description and requirements tasking in procuring and contracting. The SOW is a direct source for scope documentation, work and product breakdown structures, project breakdown structures, design and specification documents (detailed design docs), scope verification, quality management, change management and risk management, just to name a few of the critical functions influenced by this descriptive statement.
At this point it might pay dividends to briefly describe a typical procurement process involving an SOW first:
- Initiator(s): Someone or group has an idea for a project and submits it to a sponsor.
- Submission includes the reason why, the concept, purpose, outcome, expectations, goals and objectives and deliverables for a formal scope statement.
- Sponsor (authority for funding and resourcing): Sponsor reviews and approves, rejects, requires more information or feedback.
- Sponsor and initiator(s) reconcile necessity, requirements and SOW content.
- SOW written by Sponsor or prepared sponsor’s agent (this can be an administrative assistant, procurement and contracting officer, direct report PM consultant, or one of the project initiators, etc.). Government SOW is written by PMO.
- SOW is submitted to Procurement and Contracting (P&C) for bid proposal
- P&C solicit bids from vendors
- Bidders’ conference/meeting with accepted vendors
- Bidders’ option to revise bids based on new/revised/clarified information from Bidders conference/meeting
- P&C receives final bids
- P&C and Sponsor Review Bids and Select Winner
- P&C award bid to the selected vendor
- Vendor meets with P&C, Sponsor and Initiator(s), clients, customer(s), user(s) etc. for project initiation and kick-off.
Who prepares and approves the SOW?
Doctrinally speaking, the project initiator or sponsor should be the person preparing the SOW. Often times it is the procurement and contracting (P&C) office in concert with the project management or program management office that prepares the actual SOW; then, possibly reviews it with a technical expert on the related issues, revises and forwards to the project sponsor for approval and signature. In any case, the project sponsor must be someone who has the authority to appropriate and commit funding and resources; otherwise, the sponsor is really nothing more than a person requesting something with no authority to make it happen. A sponsor with appropriate authority is a “big-deal” and crucial in managing resources (cost, people, materials) throughout the lifecycle of the project.
Internal versus External
“For internal projects, the project initiator or sponsor provides the statement of work based on business needs, product, or service requirements.”
“For external projects, the statement of work can be received from the customer as part of a bid document, (e.g.., a request for proposal, request for information, or request for bid) or as part of a contract.”
Who prepares the government SOW?
A government program management office (PMO) or procurement office will normally prepare the initial SOW and have it refined based on either technical input and or based on an industry standard. The PMO may be internal to the procurement and contracting office or a PMO organic to another department. For the military and government folks, you might have a J3 (Operations) department that requires new or additional IT equipment and those items are funded by J6 (Information Technology) department. Thus, J6 will be handling the funding and the project while J3 serves in the client/user role of the project. J3 submits their requirements and J6 creates the SOW that meets those requirements. J6 as the funding authority manages the project, unless other arrangements have been made (i.e. an outside vendor hired to manage the project but still assigned to J6). Bottom line: He who holds the purse strings controls the project and the SOW.Credit: Cory Stophlet, 2014
Content of a SOW
The SOW specifies deliverables; deliverables that are quantifiable and qualifiable. This means there must be information included that makes it possible to verify that the deliverable(s) has been achieved to the desired standard. No vague language that can turn into a debate as to meaning by the client, customer(s), user(s), project team, and technical experts etc. No flat unqualifiable statements like: “Build me a house with two doors.” While one team member interprets that as one palace of 20,000 square feet made of metal and glass; another team member will interpret it as a 12’x12’ wooden shack with cardboard doors and no roof. Both would be correct. It is okay to reference a specification document, appendix, annex or addendum to the SOW for additional details.
The project initiator, sponsor, customer, P&C office must know what they want; have a clear vision of the end-state and “what done looks like.”
As you write the SOW, think about the process you go through when you are shopping for a new home, especially a new build home that where you are selecting all the pieces, parts, paint, flooring, exterior material, type of doors and windows, utilities and appliances. If you were to tell a PM, “I want you to build me a new home and this is what I want……” Go from big to small; macro picture down to micro requirements that will be used to determine whether or not the project has work has met the goals and objectives.
SOW may include or reference as attachments that include:
- Strategic planning such as the future state desired by the organization.
- The Business Justification: The purpose and reason the project exists in relation to a market demand, technology changes or advancement, legal or regulatory requirements. When an SOW is going to be submitted to outside vendors, the owning organization may want to limit the business case included in the SOW submitted to the bare essentials as they relate to deliverables. Vendors serve many masters and it would not be unheard of for your business or organization’s information to leak to competitors.
- Performance reporting requirements if those are considered deliverables, beyond the normal project performance tracking. It is reasonable to require a vendor to provide weekly or monthly project briefings and performance reports. Government projects will, without question, have a reporting requirement and may require the use of Earned Value Analysis or some other cost-to-duration-to-work-completed numerical calculations.
- Quality planning and Scope verification planning requirements: This could be a specific deliverables or P&C inspection and evaluation tool that the business requires. This is common in government projects. Reference to a project completion or deliverable evaluation checklist is acceptable, as long as it’s available to the vendor so that they know what they are being measured against.
- Skills or Expertise – The SOW can include a requirement for the vendor to provide personnel with specific skill set(s) or qualifications.
Note: Any time constraints or time tables that must be considered in the bidding process. Be aware that the more restrictive the time requirements, the more costly the project.
It’s an Iterative Development Process
Regardless of whether it is a government, military, civilian organization, or private sector business, the SOW usually starts as a working draft document, reviewed, refined and rewritten multiple times with multiple sets of eyes, and as much as possible reviewed and refined by a technical expert.
The U.S. Federal Government General Services Administration (GSA) publishes sample SOWs for use and examples.Credit: Cory Stophlet, 2014
What does the SOW impact or provides input to?
- It is used in defining schedule activities and sequencing.
- It is used to identify tangible deliverables like objects, pieces and parts, documentation, etc.
- It is used to identify intangible deliverables like the conduct of training, evaluation and assessments, gap analysis, etc.
- It is the source of deliverables used to verify and expand the Work Breakdown Structure (WBS): The SOW is used to expand the WBS, Product Breakdown Structure and or the Project Breakdown Structure into lower levels and in more detail leading to work packages.
- It is the primary requirements document in Procurement of externally acquired work, products or resources to include human resources (consultants, contractors, temporary employees, etc.).
- It is used to determine performance measures, scope verification plan, quality management, measures, and assurance.
- It is used to establish project completion and level of performance; as in have all the goals and objectives been met.
- It is used in the early stages of risk identification.
- It is crucial in change control management. Anytime a change affects the project scope, the change MUST be reconciled with the documentation of the SOW.
- It is an input to the Project Charter and may be an attachment to the Charter.
Keep in mind that throughout the lifecycle of the project changes to scope must be reconciled across all the project documents. Changes to scope open up potential new risks, requiring risk response planning.Credit: Cory Stophlet, 2014
SOW Assistance: Consider bringing in an outside consultant for project administrative assistance. On an occasion when a project is particularly unique and unfamiliar to the organization, it can be very beneficial to hire a project management consultant (on an hourly basis/Time and Materials Contract) who has the necessary relevant skills needed to assist the sponsor and procurement/contracting office in developing, preparing, writing, processing, and evaluating vendors for a project. Outside project management consultants can be used as extensions of an internal program management office, procurement and contracting office, direct assistant to a sponsor for the purposes of coordinating, reporting and administrative assistance for project recording keeping as well as an advisor and PM trainer.
Lessons Learned: It is important that any consultant reports to the person with overall project and funding authority. Never have a consultant assigned to a non-funding/contract authority subordinate user/employee. Consultants are hired under a contract to do specific work and deliver specific tasks and skills – even consultants have a scope statement that is used to measure and verify performance. The quickest way to conflict in the work force is to have an employee with “no skin in the game” supervising a consultant and the employee gives tasks and requirements that contradict the consultant’s SOW/contract.