Best Ractices of Drafting Statement of Work

Best Practices: Drafting
Statements of Work and

Technical Schedules
Carolyn L. Craig, Partner, Cooley
Christopher Sundermeier, Partner, Cooley
Peter Burns Senior Associate Cooley Peter Burns, Senior Associate, Cooley
2010 Cooley LLP, Five Palo Alto Square, 3000 El Camino Real, Palo Alto, CA 94306
The content of this packet is an introduction to Cooley LLPs capabilities and is not intended, by itself, to
provide legal advice or create an attorney-client relationship. Prior results do not guarantee future outcome.
SOWs and Technical Schedules
Overview
A statement of work (SOW) is a document that
describes in detail the services to be performed and
d li bl t b d li d deliverables to be delivered.
Other technical schedules document other details of
a partys performance such as service levels (SLA) or a partys performance such as service levels (SLA) or
maintenance and support obligations.
SOWs/Technical Schedules detail critical elements of SOWs/Technical Schedules detail critical elements of
the contract -- the failure to properly document the
performance elements is often the reason parties end
up in dispute
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up in dispute.
Elements of a SOW
Scope of work (tasks, development effort)
Pricing and payments (amount, timing, expenses) g p y ( , g, p )
Roles and responsibilities (assumptions)
Deliverables (product reports) Deliverables (product, reports)
Schedule for performance/delivery (milestones)
Acceptance criteria Acceptance criteria
Change order process
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Other Technical Schedules
Transition Plans (critical
milestones/acceptance
criteria)
Technical Architecture and
Product Standards
Oversight/Management
Data Security Requirements
Network Access Policies
Project Staff Screening
g g
Process
Service Levels (SLAs, SLCs,
Critical Services)
Project Staff Screening
Requirements
Customer/Vendor Equipment
d S ft
Critical Services)
Pricing
Reports
and Software
Business Continuity and
Disaster Recovery Plan
Early Termination Fees
Termination Assistance
Services
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Vendor Update/Refresh
Services
Potential problems with SOWs/Technical Schedules
Too general
Reads like marketing/promotional materials g p
Not treated as part of the contract
Conflicts with main agreement Conflicts with main agreement
Doesnt fill in all blanks left open in main agreement
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What takes precedence and controls?
Main Agreement generally negotiated with
contract/legal review and approval
SOW/Technical Schedules generally negotiated by
business team, but more details on performance
Establish Default Main agreement controls unless a
provision in the SOW/Technical Schedule expressly
states that it is intended to supersede states that it is intended to supersede
What is and is not a conflict?
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Real Life Example #1
Main agreement heavily negotiated as to payment
milestones, specifically tied to functionality that would
b il bl f R l 1 R l 2 t be available for Release 1, Release 2, etc.
In draft SOW, payment milestones were set up as
time based only and identified only final deliverable time-based only and identified only final deliverable
without identifying what functionality was to be
included in any of the interim Releases
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Client procuring software installation, integration and
configuration services for new platform fixed fee of
@$75 000 i ft d @$100 000 i i @$75,000 in software and @$100,000 in services
Main agreement negotiated in detail as to software
license and for Contractor to performservices in SOW license and for Contractor to perform services in SOW
Contractors draft SOW included only bullet points
identifying monthly meetings, reports, training and 1- identifying monthly meetings, reports, training and 1
year term no mention of platforms performance,
end result of the services, or any milestones for
various activities
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various activities
Vague or subjective performance obligations
complies with the specifications and performs to p p p
[Buyers] satisfaction
provide engineers, installers and/or consultants to
assist [Company] with post-sales support
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Practice Tips
Train business team on importance of these
schedules and things to consider in drafting them
Create a checklist of items referenced in the main
agreement to be specified in the schedules
Consider and document what takes precedence and
controls -- avoid conflicting provisions
B i t t i th f d fi iti d th Be consistent in the use of definitions and other
terminology
Contract/legal reviewof SOW
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Contract/legal review of SOW
Practice Tips
Use performance-based requirements, when possible
Requirements/specs to be stated quantitatively q p q y
(how many) and qualitatively (how perform)
Requirements must be verifiable (objective
standards)
Generally, identify what is to be built not how to
b ild it build it
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Contact Us
Carolyn Craig
Partner
Christopher Sundermeier
Partner
Peter Burns
Associate
Palo AltoHanover Campus
3175 Hanover Street
Palo Alto, California 94304
Phone: 650/843-5327
Fax: 650/849-7400
3175 Hanover Street
Phone: 650/843-5684
Fax: 650/849-7400
3175 Hanover Street
Phone: 650/843-5251
Fax: 650/849-7400 Fax: 650/849 7400
[email protected]
Fax: 650/849 7400
[email protected]
Fax: 650/849 7400
[email protected]
www.cooley.com

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