What Is A Statement of Work - Definition & Examples - ProjectManager

8/18/23, 7:40 PM What Is a Statement of Work?
Definition & Examples - ProjectManager
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PLANNING, PROJECT DOCUMENTS, PROJECT MANAGEMENT
What Is a Statement of Work? Definition &

Examples
by Peter Landau | Apr 28, 2023
There’s always plenty of project management paperwork to create, get approved, file
and archive. All project documents are important, but the Statement of Work (SOW) is
easily one of the most important because it’s made at the outset of a project and
outlines everything that needs to go into your project.
Using effective project planning tools and a thorough and well-written statement of
work (SOW) will set you up to successfully lead a project over the finish line on
schedule and within budget.
What Is a Statement of Work (SOW) In Project
Management?
The statement of work (SOW) is a legally binding document that captures and defines
all the work management aspects of your project. You’ll note the activities,
deliverables and timetable for the project. It’s an extremely detailed work contract that
defines the terms and conditions agreed upon between parties and lays the
groundwork for the project plan.
The statement of work (SOW) is one of the first documents you’ll create to lay out the
entire landscape of the project before you create a project plan and execute it.
Because of the great amount of detail required, the prospect of writing one can be
daunting. Let’s break it down into more digestible parts. Your statement of work will be
much more detailed than your job estimate, which is a simpler document that outlines
the work that’ll be performed and the costs associated with it.
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Statement Of Work Template

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Use this free Statement Of Work Template for Word to manage your
projects better.
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When you’re writing a statement of work, it can help to use a statement of work
template because of the various aspects of the project that it must capture. Most
statement-of-work templates include things such as a glossary of terms defining what
you’re referencing in the SOW. There will be a place for you to write the statement of
purpose as well as administrative information. If you like our statement of work
template, you can also try our free project management templates to manage your
projects.
Statement of Work vs. Scope of Work
While they sound the same, a statement of work isn’t a scope of work. The statement
of work, as we’ve shown, is a formal document that details the goals of the project.
The scope of work is part of the larger statement of work. In it, the way the project
team will deliver the outcomes laid out in the SOW is described, so the scope of work
is a much shorter document.
What Does SOW Stand for In Business and Project
Management?
Now that we’ve cleared the difference between a statement of work and scope of
work, it’s important to note that the SOW acronym stands for statement of work, and
not scope of work, which is a component of the SOW. Similarly, the terms SOW
contract, SOW document and SOW agreement also refer to statements of work in
project management and business.
What Is the Purpose of a Statement of Work
(SOW)?
As noted, the statement of work is a detailed overview of the project scope. It’s also a
way to share the project requirements, acceptance criteria and payment terms with
those who are working on the project, whether they’re collaborating or are contracted
to work on the project. This includes stakeholders like vendors and contractors who
8/18/23, 7:40 PM What Is a Statement of Work? Definition & Examples - ProjectManager
are bidding to work on the project.

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An SOW contract is also helpful to project managers as it provides a structure on

which the project plan can be built. The statement of work helps to avoid conflicts in
the project. With detail and clarity, the SOW helps keep everyone that’s involved in the
project on the same page and works to leave confusion to a minimum.
When building your schedule, it helps to use project management software. It can be
immensely helpful for organizing your tasks and resources, as it’s critical to make an
accurate schedule at this stage in the project. Project management software can also
help you to create a work breakdown structure (WBS) to zoom into your project scope
and identify your project’s activities, deliverables and milestones.
Types of Statement of Work
An SOW can be broken down into three main categories which can be defined as
follows.
Design/detail SOW: When you’re writing this SOW, you’re conveying to the
supplier how you want the work done. What are the buyer requirements that’ll
control the supplier’s process? You can use a requirements gathering template to
ensure you gather them all. These project requirements can run the gamut from
quality acceptance criteria and payment terms to the measurement of materials.
In this SOW, it’s the buyer who’s being held responsible for the performance as
he’s the one directing the project course.
Level of effort/time and materials/unit rate SOW: This SOW agreement is an
almost universal version and it can apply to most projects. It defines the level of
effort as well as the materials and cost per unit. It tends to find use in short-term
contracts.
Performance-based SOW: This is the preferred SOW of project managers as it
focuses on the purpose of the project, the resources and the quality level
expected of the deliverables. It does not, however, explain how the work is
supposed to get done. This allows a great deal of autonomy on how to get to an
outcome without requiring a specific process.
Whatever type of SOW document you choose, you’ll want to use project management
software to streamline the process. ProjectManager can organize the information
you’re gathering in our list view. But our tool does more than make a fancy to-do list.
Choose between online Gantt charts, kanban boards, project calendars and other
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project management views to plan, schedule and track your projects. In addition, our
real-time software tracks your progress and the list shows the percentage
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for each task. You can assign work to your team, set priority, add customized tags and
much more. See for yourself by taking our free 30-day trial today.
ProjectManager’s Gantt chart is powerful enough to keep track of your SOW. Learn
more.
How to Write a Project Statement of Work (SOW)

A statement of work is a legally binding agreement between a client and a vendor that
describes the terms and conditions for the execution of a project’s scope of work.
There’s a lot of information to describe in the SOW. You can create this on your own if
you want, but using project management tools to make sure nothing is left out will
prove helpful. You only have one chance to create your SOW document, and you want
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Here’s an overview of the steps you’ll need to follow to write your statement of work:
1. Create a brief introduction for your project

2. Define the purpose of your project
3. Define your project scope
4. Create a work breakdown structure to identify your project tasks, milestones and
deliverables
5. Create a project schedule for your tasks, milestones and deliverables
6. Define project requirements and acceptance criteria
7. Define payment terms and conditions
We’ll explore each of the SOW components involved in this process in the section
below.
In terms of writing the statement of work, you’ll want to be specific with this project
document. You want to clarify the terms used to make them universally understood
and clearly define who’s going to do what and by what time those tasks must be
completed. This avoids confusion later in the project when you can’t afford
miscommunications or disputes.
Besides writing clearly, include visuals in the SOW to help focus the lens on various
project aspects. Including visuals, be they charts, graphs or other illustrations to help
you clarify the project, will make the SOW agreement more digestible.
After all the work you’ve done to detail the specifics of the project, you don’t want to
neglect the final, crucial step — getting the work signed off. You can’t proceed if you
don’t have the authority to do so. Or, more accurately, you can, but it might cost you
the success of the project. Make sure that those in authority have signed off on the
statement of work.
What Should Be Included in a Statement of Work
(SOW)?
There are as many parts in a statement of work as there are in a project, so it’s
advisable to use a project management information system to help you manage its
advisable to use a project management information system to help you manage its
components. If you start by focusing on the parts, you can work yourself up to the
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whole. For a full understanding of an SOW, first, note the major aspects of the project
it addresses.
1. Introduction
Begin with explaining what work is being done and general information about the
project such as who is involved. State these parties. This will lead to a standing offer,
which cements prices for products or services purchased for the project, and a more
formal contract that goes into greater detail.
2. Purpose Statement
Start with the big question: why are you initiating this project? What’s the purpose of
the project? Create a purpose statement to lead this section and provide a thorough
answer to these questions, such as what are the project objectives, deliverables and
return on investment.
3. Scope of Work
What work needs to be done in the project? Note it in the scope of work, including
what hardware and software will be necessary. What’s the process you’ll use to
complete the work defined in your project scope? This includes outcomes, time
involved and even general steps it’ll take to achieve that. You’ll need to create a
project scope statement to capture the information about your project scope.
4. Where Will the Work Be Done?
The team you employ has to work somewhere. The project might be site-specific, at a
central facility or some, if not all project team members could work remotely.
Regardless, here’s where you want to detail that and where the equipment and
software used will be located.
5. Tasks
Take those general steps outlined in the scope of work and break them down into
more detailed tasks. Be specific and don’t leave out any action that’s required to
produce deliverables and accomplish the project objectives. You can use a work
breakdown structure to break the tasks down into milestones or phases.
6. Milestones
Define the amount of time that’s scheduled to complete the project, from the start
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date to the proposed finish date. Detail the billable hours per week and month, and
whatever else relates to the scheduling of the project. Again, specificity

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example, if there’s a maximum amount of billable hours for vendors and/or contracts,
note it here.
Use project management software to monitor your progress and ensure you’re
meeting your milestones. ProjectManager has a real-time dashboard that’s built into
the tool, unlike other software that makes you build your own. We not only have a
dashboard embedded but it automatically calculates and displays the metrics in easy-
to-read charts and graphs. Keep up with more than milestones but also project
variance, costs and more.
7. Deliverables
What are the project deliverables? List them and explain what’s due and when it’s due.
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What Is a Statement of Work? Definition & Examples - ProjectManager
Describe them in detail, such as quantity, size, color and whatever might be relevant.
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8. Schedule
Include a detailed list of when the project deliverables need to get done, beginning
with which vendor will be selected to achieve this goal, the kickoff, the performance
period, the review stage, development, implementation, testing, close of the project,
etc.
9. Standards and Testing
If there are any industry acceptance criteria or quality standards that need to be
adhered to, list those here. Also, if there will be testing of the product, list who will be
involved in this acceptance testing process, what equipment is needed and other
resources.
10. Define Project Success
Note what the sponsor and/or project stakeholders expect as successful project
completion.
11. Project Requirements
List any other equipment that’s needed to complete the project and if there’s a
necessary degree or certification required of team members. Also, note if there will be
travel or other project requirements not already covered.
12. Payment Terms
If the project budget has been created, then you can list the payments related to the
project and how they’ll be delivered: upfront, over time or after completion. For
example, you can pay after the completion of a milestone or on a fixed schedule,
whichever is more financially feasible.
13. Other
There will be other parts of the project that aren’t suited to the above categories, and
this is the place where you can add them so that everything is covered. For example,
are there security issues, restrictions around hardware or software, travel pay, post-
project support, etc?
14. Closure
This determines how the deliverables will be accepted, and who will deliver, review
and sign off on the deliverables. It deals with the final admin duties, making sure
everything is signed and closed and archived.
Statement of Work Example
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We’ve been talking a lot about a statement of work, but a statement of work example
can help make the subject more understandable. Let’s take a look at what a statement
of work sample would look like in a real-life scenario.
Construction Statement of Work
For our statement of work example, let’s explore what one would look like in a
construction project. We’re not going to go into detail, but rather sketch out a general
SOW and how it would be built around the erection of a generic building.
Background
The first thing you’ll want to do is give the project some context. That is, provide a
short profile of your company. You can talk about its history, executive team, area of
expertise and, especially, highlight similar construction projects. Other buildings that
you built can be added here, and it’s even better if you can show that you’ve built
similar structures in the past.
Purpose
Now you’ll want to explain the why of the project. Why is it being built? That’s the most
important question, but it’ll lead to further questions. Some of the questions you’ll
want to pose and answer are what the deliverables of the project will be, certainly
explain the objective of the project and what its return on investment (ROI) is. There
are other questions, but those are a start.
Scope of Work
The scope of work is a summary of the project scope, or in other words, everything
that has to be done in the project. You’ll want to list all of it, from drawing up plans to
getting the site ready, preconstruction, building the frame, drywall, electrical and
plumbing, HVAC and the rest. Not only that, you’ll want to detail the hardware and
software you’ll need. Finally, don’t forget to include the outcomes, a timeline, duration,
the steps you’ll take to go from start to finish, etc.
Location
Obviously, a building exists in space. This is where you’ll name the location of the
build, the equipment that you’ll need, including software, to get the site ready for
construction and anything, such as scaffolding, signage, etc., you’ll need on-site to be
ready to start construction and make sure it’s done safely and to code.
Project Schedule
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You’ve touched on a timeline, but now you’ll write out a project schedule. It should
include all the project deliverables, start and finish dates for all the tasks, but also the
team members, subcontractors, vendors, et al., who are responsible for the
construction. You need to include all stages of the project, from kickoff to completion.
Project Deliverables
You’ve mentioned deliverables before in the SOW document, but now you want to list
all of them and go into greater detail. This includes a description of the deliverable and
its due date.
Project Milestones
Use milestones to break up your timeline into phases. A milestone can mark the
beginning or the end of a project phase. But project milestones can also indicate any
major deliverable. They’re a good tool to keep stakeholders updated and track
progress.
Project Tasks
Tasks are the small pieces of work that make up the larger steps of the project scope.
They’re detailed and collected within each project phase. Here’s where all the
construction tasks will be outlined, from blueprints to the removal of garbage from the
construction site.
Success Criteria
It’s important to have some metrics to define success in the project. Success is, of
course, defined by the project owner. But the general contractor needs to be able to
measure that success and show the owner that the project is moving forward as
planned.
Project Requirements
Whatever requirements you have for the construction project are listed here. These
can range from degrees required of skilled workers to certifications and code
requirements.
Payment Terms
Note the type of construction contract and how that determines payment for work
rendered, such as in what installment, frequency, delivery, etc.
This statement of work sample explains how statements of work are used in project
management. You can download our free statement of work templateStart freetotrialcreate a
similar SOW document that fits your project. In addition, we offer dozens of free
project management templates you can use to plan, schedule, track and manage your
projects.
SOW Related Documents
An SOW is one of many project management documents that you’ll need to manage
your projects. Here are some that are closely related to a statement of work.
Master service agreement: A contract that defines the terms that’ll govern
future transactions and agreements between two parties. The master service
agreement includes basic terms and conditions that can be waived in future legal
agreements. Use a master service agreement to start a relationship with a client
or vendor, and then use an SOW document for each project.
Project charter: A project charter provides an overview of your project. It
includes things like the project objectives, stakeholders, goals and project scope,
among others. It’s a very helpful document to help you write your SOW.
Work breakdown structure: A work breakdown structure it’s a project
management tool that allows project managers to break down the project scope
into tasks, deliverables, milestones and project phases. It’s a visual
representation of all the work needed for a project.
Request for proposal: A request for proposal (RFP) is used to seek out vendors
and contractors that can supply a project with products and services. The RFP
provides a project overview to give the bidding parties a clear description of
what is needed from them. Once the client chooses a vendor, the next step is to
give them a statement of work with more detailed information about the scope of
work.
ProjectManager Can Improve Your Statement of

Work
ProjectManager has a suite of project management tools that can help you put
together a statement of work (SOW) that accurately depicts the forthcoming project.
For starters, you can use our Gantt to start listing the tasks you can think of for the
project.
Plan and Schedule Project Tasks With Gantt Charts
The online Gantt has the basics of a visual timeline and the ability
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dependencies to avoid bottlenecks and set milestones. Assign costs to tasks and see
your planned costs for the project or specific phases. But you can use the sheet view
to only see the grid, filter the critical path to know what tasks can be skipped if
necessary and set the baseline once your schedule and budget are done. That means
you’ll be able to track in real time whether you’re staying on track and under budget.
ProjectManager has the tools you want and delivers more functionality than the
competition.
As you can see, using our Gantt chart software can go a long way to making an
accurate statement of work for your project. Accuracy means a lot to stakeholders
when it comes time to deliver on the work that you scoped out.
Keep Track of Progress, Costs and Schedules With Real-Time
Dashboards
Dashboards
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ProjectManager’s project dashboard tracks progress, costs and workload in real time
so you can monitor the execution of your statement of work and quickly determine
whether your project team is delivering tasks on time and on budget. In addition, Gantt
charts and kanban boards have built-in risk and resource management features for
better project tracking.
The statement of work is a foundational document of any project. Once created and
approved, you’ll have to create a plan and implement it. That’s where ProjectManager
comes in. Our online project management software provides real-time data to help you
manage and track your statement of work. Take it for a test spin and see how it can
help you with this 30-day free trial.
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PLANNING, PROJECT DOCUMENTS, PROJECT MANAGEMENT