5 Common Mistakes When Writing a Statement of Work (SOW)
Statement of Work commonly referred to as SOW, can have major impact on the bid process and is an essential part of the procurement process.
A SOW offers a description of a project’s work requirement, project-specific activities, deliverables and timelines for a vendor providing services to the client.
Many companies tie the SOW to performance, quality, level of effort, cost, and clarity in the parts/services being presented to bid on. This post will analyze 5 common mistakes that occur when writing a SOW.
1. Too Specific or too Vague
The most common mistakes when writing a SOW involve it being too specific or too vague, which results in suppliers having a reduced ability to effectively apply creative solutions for the bid. For example, you need to purchase fire truck engines and the SOW is written with extra detail about engine performance metrics, size and features. Only one supplier may be able to bid due to the over-specific requirements. This may result in reduced the competitiveness of the bid, service level, performance, and cost.
2. Internally driven rather than customer driven
The problem arises when internal departments add additional requirements that do not add value to the customer. It is important to communicate equally among internal groups so that finance, engineering, supply management, and marketing have an aligned focus…the customer. Creating a SOW for outsourced resources should be driven with the primary focus of satisfying the needs and wants of the customer.
3. Inferring obligations
A common error arises when inferences are made in a SOW.
- A common example of inferring obligations is the statement, “testing should be done before delivery”; it leads to questions and even loopholes that creates bids to be compared like apples to oranges.
- A much more direct clause, “Supplier duties: test 10 samples using 200PSI water test. Send test report via email to receiving and engineering, attach to packing slip for every delivery”; gives clearly defined parameters and helps to remove time, loopholes, and allows for competitive apples to apples comparisons.
4. Do not sole-source a SOW if competition is undesired
This is becoming more and more common with organizations requiring a paper-trail. If a SOW is not required for every purchase, there is no need to have it for a sole-source that all functions have agreed to. Expedite the process by inviting the supplier to a facility meeting that has spec., performance, schedule, etc. Write the agreed contract or PO and send everyone on their way to more pressing matters. Especially, when dealing with commodities that have low switching costs.
5. Proofread and provide ALL relevant reference documents
The epitome of document errors is proofreading, formatting, and providing correct reference documents. After completing a SOW take at least an hour break before returning to edit, if possible. Read out loud to make sure the words are clear and think from the perspective of the supplier to find ambiguity that may lead to more questions down the road. When coming across a reference, be sure to identify the document in a zip file before sending to selected suppliers.
We hope these tips help you when writing your next statement of work.