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Statement of Work (SOW) : Performance Based Contracting

The document discusses the importance of a well-written statement of work (SOW) for performance-based contracts. It outlines a 9-step process for developing an effective SOW, including establishing scope, listing tasks, organizing tasks logically, identifying inputs/outputs, timelines, and quality standards. The SOW is the "heart" of the procurement and misinterpretations can result in significant losses if it is not clear, specific, and reviewed by third parties.

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69 views16 pages

Statement of Work (SOW) : Performance Based Contracting

The document discusses the importance of a well-written statement of work (SOW) for performance-based contracts. It outlines a 9-step process for developing an effective SOW, including establishing scope, listing tasks, organizing tasks logically, identifying inputs/outputs, timelines, and quality standards. The SOW is the "heart" of the procurement and misinterpretations can result in significant losses if it is not clear, specific, and reviewed by third parties.

Uploaded by

Anonymous 7Un6mnqJzN
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 16

STATEMENT OF WORK

(SOW)
PERFORMANCE BASED
CONTRACTING
1

Statement of Work
What vs. How
Lower costs
Flexibility to achieve a solution
Solution is the responsibility on the
contractor

What Is An SOW?
A formal written description of your minimum
requirements to be performed by a contractor
The statement of work (SOW) is a narrative description of the
work required for the project. The complexity of the SOW is
determined by the desires of top management, the customer,
and/or the user groups.
The heart of your procurement

SOW preparation is not as easy as it


sounds. Consider the following:
The SOW says that you are to conduct a minimum 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 SOW states that the prototype must be
tested in water. You drop the prototype into a swimming pool to test it. Unfortunately,
the Navys 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 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.

These three examples show that misinterpretations of the


SOW can result in losses of hundreds of millions of
dollars. 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 third-party review
5

STATEMENT OF WORK
PROCESS OVERVIEW
The following is a summary of the recommended process steps for
preparing a Statement of Work SOW :
1.
2.
3.
4.
5.
6.
7.
8.
9.

Establish a preliminary scope statement ( i.e., the purpose or


objective of your procurement)
List the tasks to be performed ( i.e., All performance requirements
you intend the contractor to satisfy, all requirements that the
contractor must comply with during contract performance )
Group similar and related tasks.
Organize the tasks in logical sequence
Identify the input ( Required resources to perform the tasks)
Identify the output ( Required results or deliverables )
Identify the timeline or frequency of the deliverables (output)
Develop the parameters for acceptable quality and performance
Determine how you will monitor the deliverables
6

Statement of Work
Step 1
ESTABLISH A PRELIMINARY SCOPE STATEMENT
THAT:

Identifies the objective or purpose of the procurement


Description of work to be performed
Define the magnitude of work to be performed
Defines the boundaries of performance and
responsibilities

Statement of Work
Step 2
List task to be performed that will:
Accomplish the objective of the SOW
Focus of what not how the contractor will perform

Statement of Work
Step 3
Group similar and related task
Categorize tasks as either major or
sub-tasks
Add any additional tasks as you
work through this

Statement of Work
Step 4
Organized task in logical sequence
Chronological order
Time-phase
Discipline

Ensure task required meet the minimum


requirements
Delete unnecessary or repetitive tasks

10

Statement of Work
Step 5
Identify the required resources for each
task (input)
May be labor, equipment and material
May be NAFI or government provided

Identify any operating restrictions or


procedures

11

Statement of Work
Step 6
Identify required results and or
deliverables (output)
Meetings
Reports

Provides information to develop


oversight plan
Contractor responsible for the work
(input to output)
12

Statement of Work
Step 7
Identify the frequency and timeline of
deliverables
Assists in
Refining SOW
Method of surveillance
Surveillance plan
Cost estimate
13

Statement of Work
Step 8
Develop performance standard or acceptance
criteria expressed in

Quality
Quantity
Time
Appearance

Should include elements such as What, when,


where, how many times
Should be appropriate for the contract and
Necessary
Realistic
Objective and measurable

14

Statement of Work
Step 9

Determine how you will monitor the deliverables


Must be appropriate for the contract
Cost effective
Methods include:

100% inspection
Random sampling
Periodic inspection
Customer copleaints
Review of progress milestons
Reports by contractor

15

Statement of Work
Conclusion
Lastly, the key factor in the success of
the Performance Based Contract is the
ability of you, the customer, to write
good requirements.

16

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