What Is a Statement of Work (SOW)?

In project management, a statement of work (SOW) is a formal document that outlines the specific tasks, deliverables, and requirements of a project. It serves as a contractual agreement between a vendor and a client, providing a comprehensive description of the work to be performed. 

The SOW includes all the necessary information and terms and conditions to ensure both parties have a clear understanding of their roles, responsibilities, and expectations. It serves as a legally binding agreement that governs the project's scope, timeline, resources, and other essential aspects. A clear statement of work should protect against any disputes and negotiations when the project is in motion.

Statement of work vs. scope of work

A statement of work and scope of work are related, but they are not the same thing. A scope of work is a specific section within the SOW that focuses on the detailed description of how the vendor will execute and deliver the work. It defines the specific tasks, activities, resources, and methodologies that will be employed to complete the project successfully. The scope of work provides clarity on the approach and specific requirements for the vendor to meet the client's expectations. 

Components of a statement of work

While you can follow any format you choose when writing your statement of work, you should include some important components: 

Objectives

Clearly state your objectives. Think about why the project is happening and what you expect to achieve. It’s important to make objectives measurable so you know exactly when you achieve them. 

Scope of work 

Here is where you outline the work the vendor will undertake to achieve the project objectives. This section includes who will work on the project, what they will do, and the processes they will use. Details include tools and resources you will use and how you will report results and updates.

Milestones

Include milestones in your statement of work to show when you expect each deliverable. This helps ensure an understanding of when to expect completed tasks across the project lifecycle. Often, delivery of these milestones corresponds with payment for that phase of the project. 

Timelines

A timeline is an estimate of the project duration and when to expect each milestone, deliverable, and payment. This is a flexible part of the document that is subject to change if you include specific dates or may span a set of dates to allow for flexibility. 

Costs

The costs section outlines overall project costs, with breakdowns for any phases, along with costs for equipment, staffing, travel, and any other expenses. It includes details of how you will deliver payments and when. 

Signatures

Both parties sign and date the statement of work documents to signify agreement with the terms. 

Related terms

• Project plan

• Gantt charts

• Sprint plan

• Procurement

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