What is the ‘Statement of Works’ document in project management?

The statement of works describes the client's specifications for the outcome to be provided within the scope of the project. The client should write the specifications. It then serves as the basis for obtaining offers (tendering). Particularly in construction and plant engineering, the statement of work is also referred to as a bill of quantities (BOQ).

It can still be found that the designated contractor draws up the specifications himself in coordination with the client. For the contractor, this has the great advantage of being able to define the service to be provided by himself. For the client, this results in the risk that the contractually agreed service may not exactly meet his needs. The advantages of this approach are that the executor usually has the higher professional competence and therefore chooses the technically best solution approach and that he only promises what he can achieve.

Contents of the statement of works

The structure of a statement of works should contain the following points:

  • The specification of the work to be performed (deliverables, project product).
  • The requirements for the product in its subsequent use (e.g. temperature range).
  • Framework conditions for product and service provision (e.g. standards, guidelines, materials, etc.)
  • Contractual conditions (e.g. provision of partial services, warranty requirements, etc.).
  • Requirements for the contractor (e.g. certifications).
  • Requirements for the contractor's project management (e.g. project documentation, testing methods)

From the statement of work to the functional specifications document

In a formally correct procedure, the contractor converts the deliverables to be provided into required activities (obligations) and creates the so-called functional specification documents as part of his offer. The simplest form is the specification of the delivery date and the unit prices. The most detailed form already contains the complete project planning (e.g. the contract schedule), as well as all documents that form the basis for it. For projects that require close coordination between the contractor and the client, the functional specification document can be developed by a joint working group. In the case of large-scale projects (e.g. civil engineering), the creation and contractual agreement of the specification sheet can be a project in itself.

The scope of works statement and the functional specifications should always be part of the contract between the client and the contractor.

Statement of works definitions

PMBOK®6

The term ‘statement of works’ does not appear in the PMI's (Project Management Institute) PMBOK® (Project Management Body of Knowledge) definition list current at this time, but means: ‘A narrative description of products or services to be supplied under a contract.

DIN 69901-5:2009-01

According to the German Institute for Standardization (DIN) the statement of works is a ‘By a client through an order determined totality of the deliveriables and services to be provided by a contractor under a contract.’ („Vom Auftraggeber festgelegte Gesamtheit der Forderungen an die Lieferungen und Leistungen eines Auftragnehmers innerhalb eines Auftrages.“)

ICB

The Individual Competence Baseline (ICB) does not explicitly name a statement of works. Instead, it only speaks of "project scope" and "deliverables".

Prince2

PRINCE2 takes a different approach and abandons the system of the statement of works and functional specifications, as it does not describe the procurement processes.

In terms of content, the statement of works for the overall project is replaced by the project mandate and the description of the project product. Instead of the statement of works, PRINCE2 uses the product structure plan and the product descriptions as well as the management strategies.

Who prepares the statement of works document?

Generally speaking, the client should draw up the statement of works. Nevertheless, it is often done by the designated contractor in coordination with the client. Occasionally it is also created in a joint working group, whereby the client knows his requirements best, and the contractor is more specialized and has better know-how of what is possible.

What is the difference between the statement of works and the functional specification document?

After receiving the statement of works, the contractor converts the results (deliverables) to be provided into required activities (obligations) and creates the so-called functional specifications as part of the offer to the client.

How to prepare a statement of works?

The easiest way to create a statement of works (SOW) is to start by downloading a template from the Internet. My project management template set contains a SOW template, which is very easy to use and saves a lot of time and consequently money. Just fill in the fields to put together all the information about your project. The template contains easy to follow instructions on how to use the template.

The benefit of a professional statement of works exceeds the effort required for the preparation by far. In addition, with a systematic approach, the statement of works contains the information necessary for further project planning anyway.

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