Creating a Successful SOW - New York Business Law — New York Business Law

Creating a Successful SOW

by Fred Abramson on April 21, 2014 · 0 comments

Getting a statement of work (SOW) right is not simple. A properly drafted SOW is vital to the success of a project. If the statement of work is too ambiguous or overboard, it can leave room for various interpretations, which will lead to problems. 

In my experience, the failure to properly execute a statement of work is often the reason parties end up in a litigation. 

What is a SOW? A statement of work (SOW) is a formal document that captures and defines the work activities, deliverables, and timeline a vendor must execute in performance of specified work for a client. The SOW usually includes detailed requirements and pricing, with standard industry terms and conditions.

What should be included in a SOW?

  • Who pays each cost and the timeline of payment.
  • A description of all deliverables and when they’re expected.
  • The tasks that support the deliverables, as well as which side – the hiring company or the service provider – will perform those tasks.
  • The project’s governance process, along with how often governing committees will meet.
  • What resources are required for the project, what facilities will be used and whose equipment will be needed, as well as testing requirements.
  • A timetable covering when each deliverable should be completed. If you are delivering the work, I would recommend that the timetable to be flexible. On the other hand, if you are purchasing the services, a strict timetable could be best. I would also recommend a time for the work to be reviewed prior to it being delivered. 
How about payment? To keep the work moving forward, I would also recommend payment contingent on the successful completion of certain benchmarks. I would also advise that full payment should not be made until it is clear that everything works properly.
Be particular.  Be specific in describing the project’s scope and requirements. If you are not clear about the work being performed, it will be difficult to litigate if there is a breach. 
Keep the language simple. Believe it or not, it is the attorney’s job to keep the language of the SOW is simple as possible. Lots of a legalize is usually a sign of a poorly drafted SOW. Technical jargon should be avoided if possible. 

The task of writing a statement of work could fall to various players on a team working in conjunction with counsel.. The best approach is for team leaders to draft it and then work with the an attorney to perfect it.. After the SOW is completed, it is then sent to the vendor. If you follow these steps, you increase the likelihood of success dramatically.  

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