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What is a Statement of Work and Why Do You Need One?

Free Download SOW Editable Template
14 Mar 2022
What is a Statement of Work and Why Do You Need One?

The role of project manager implies dealing with a lot of documents through the project's lifecycle. One of the most important is, undoubtfully, the statement of work. Statement of work (SOW) is serves as a formal statement that describes the purpose of the project. It contains a list of tasks explained in detail covering topics like timeline, resources, special requirements, expected outcomes, project team, etc. This article describes each of these elements, as well as provides tips and a template for you to create your own statement of work. By clearly defining the tasks involved, the SOW helps the project manager and team members understand their responsibilities and ensures that everyone is on the same page.

statement of work in project management

What Is a Statement of Work (SOW)?

A Statement of Work is defined as a narrative description of products or services or results to be delivered by that project (PMBOK 6 guide).

The SOW is a legally binding agreement between the client or customer and the contractor or supplier. It sets the expectations and responsibilities for both parties, providing a clear framework for the project. The SOW serves as a reference point throughout the project to ensure that both parties are fulfilling their obligations as agreed upon. It also lays the foundation for any future agreements or contracts related to the project, as it provides a documented history of the project's scope and requirements.

In its current form, the definition of statement of work can be construed to indicate merely the products and services to be supplied to the customer. However, it should also include the contractor's needs and requirements in order to properly deliver the products and services.

All parties involved must have their obligations identified in the SOW. Many services and outsourcing providers become so preoccupied with identifying and defining the needs and requirements of their clients that they forget about their own. But, in order for the supplier to deliver a quality product or service, their demands and expectations must also be addressed.

What is the Importance of a SOW?

The statement of work (SOW) creates the foundation for the delivery of services and products. Seeing as the majority of projects fail during the beginning and planning phases ( rather than during the implementation or execution phases), it is crucial to lay the groundwork that will eventually determine whether or not the project succeeds. This is why you need to create a statement that will have a precise description of the work that needs to be done so that you can have a baseline against which you can monitor and manage the progress of a project. This includes having a detailed plan of project scope, cost, schedule etc.

what is sow

If you have an unclear or unknown scope, you are essentially managing a project with no project objectives and because you do not have a baseline, it is doomed to fail. A project failure can also be tied to change - but it is important to note that change does not cause a project to fail, rather the failure is due to an organisation's inability to adequately manage change.

The importance of SOW is also reflected in its role as a contract's supporting document. It lists out exactly what services and products will be provided to the customer and what we, as the deliverer, will require from them in order to efficiently deliver those services and products. Statement of work essentially gives all parties an objective metric for determining when work is satisfactorily done and when payment is justified.

Proposed Finish Date and Documenting Expectations

The SOW includes a proposed finish date or timeline for the project, outlining the expected duration of the project and key milestones. This allows all parties involved to have a clear understanding of the project's timeline and helps with scheduling and resource allocation. Additionally, the SOW documents the expectations for the project, including deliverables, quality standards, and any specific requirements. By documenting these expectations in the SOW, it becomes easier to measure project success and ensure that the final outcome meets the agreed-upon criteria.

Keeping Everyone on the Same Page

One of the primary purposes of the SOW is to ensure that all stakeholders, including the project team, client, and any other involved parties, are on the same page regarding the project's objectives and requirements. By providing a detailed and comprehensive overview of the project, the SOW reduces ambiguity and minimizes the risk of misinterpretation. It serves as a reference point for clarifying any uncertainties or disagreements that may arise during the next project phase, helping to maintain alignment and facilitate effective communication among all stakeholders.

Documentation for Project Management and Auditing

The SOW also plays a crucial role in project management and auditing processes. It provides a documented record of the project's scope, objectives, tasks, and timelines, which can be referenced throughout the project's lifecycle. Project managers can use the SOW to track progress, manage resources, and assess whether the project is on track. Additionally, the SOW serves as a valuable document for project audits, allowing stakeholders to review the project's performance and ensure that it adheres to the agreed-upon terms and requirements.

In conclusion, the statement of work is a detailed and comprehensive document that outlines the purpose, tasks, deliverables, timelines, and expectations of a project. It serves as a legally binding agreement, helps keep all parties on the same page, and provides a foundation for effective project management and auditing. By carefully crafting and documenting the SOW, project managers can set clear expectations, mitigate risks, and increase the chances of project success.

Project Scope

Project scope is a critical element of the statement of work (SOW) as it defines the boundaries and extent of the project. It outlines the specific goals, deliverables, and features that will be included in the project, as well as what will be excluded. The scope defines the project's boundaries by clarifying the project's objectives, constraints, and assumptions. It helps to ensure that all stakeholders have a clear understanding of what will be achieved within the project and what falls outside its scope. By clearly defining the project scope in the SOW, project managers can effectively manage expectations, allocate resources appropriately, and minimize the risk of scope creep or uncontrolled expansion of the project's goals. It also serves as a reference point for evaluating the success of the project, as the project deliverables and outcomes can be assessed against the defined scope.

3 Common Types of Statement of Work (SOW)

There are a few different ways to write a statement of work. Which type suits your needs the most is usually dependent on the industry and type of service or project you are writing a statement for. Most commonly, there are three SOW types:

1. Design/Detail Statement of Work

This type of SOW instructs the vendor, contractor, or supplier on how to complete the task and what procedures to follow. It is focused on the special requirements of a project. In other words, this statement of work specifies the criteria of the customer, client, or business, whether they be for materials, measures, quality control, or something else. This is the recommended SOW for manufacturing or construction projects, as it is frequently used in government contracts where contractors are expected to meet strict standards. Because the contractor is expected to meet the standards given forth for them, the buyer, client, or entity bears the majority of the risk under this sort of SOW.

2. Level of Effort/Time and Materials/Unit Rate Statement of Work

This is a versatile SOW that is commonly used by hourly service providers. It's frequently used for temporary or contract personnel, as well as delivery orders. It is simply based on the number of hours a service provider worked and the materials required to complete said service. The SOW is a general description of the service that will be provided over a set period of time.

3. Performance-Based Statement of Work

Performance-based SOW is preferred by most government institutions. It includes information about the project's goal, the resources and equipment that will be provided, and the measurable end results. However, it does not instruct the contractor on how to complete the work. This type of SOW allows them maximum flexibility in terms of how they work and emphasises results over processes. This type of SOW places accountability on the contractor or the supplier's process, since they are responsible for providing outcomes using whichever tactics they believe are most effective.

how to write a statement of work

How to Write a Statement of Work?

No matter which type of SOW you choose to use, an SOW needs to explain key elements like project budget, timeline, scope, team, deliverables, etc. Here are some general things to keep in mind while creating a statement of work:

  • Brainstorm about what should be included and which details would be better negotiated during later phases of the project or contract management process before writing an official statement of work.
  • Start developing it in the early stages of a project when most projects are still taking shape. That can help you define and develop the project itself.
  • Clearly define what is the project's acceptance criteria. Defineboth the success and failure of a project. This defines not only what deliverables should look like but it should also include any criteria that would deem a project unacceptable.
  • Schedule times for formal reviews throughout the project lifecycle to ensure the work is on the right track. This allows the client to ensure that the contractor is adhering to their standards, as well as provide feedback to the contractor on what they're doing well and where they can improve.
  • It is very important that the objectives, scope of work, requirements and tasks sections are defined in a precise way so that nothing is misinterpreted after the work begins. Avoid listing options or alternatives since it can lead to misinterpretations.
  • One of key things to keep in mind is the the SOW should document an already reached agreement, not be used to negotiate project guidelines.
  • When writing an SOW make sure your whole project team is involved. It is best to have everyone involved in a project review and update statement of work as soon as there are new process or milestones progresses.
  • Do not make the statement of work too long. Yes, an SOW should capture all the necessary details, but try to keep it as brief as possible.

Key Elements of a Procurement Statement of Work

As already mentioned, a document like SOW may have some differences across different organisations that depend on project requirements. However, each statement of work document has all of the following key elements.

sow statement of work


Begin to write a statement of work with the general information about the project and an explanation of the work that needs to be done and who is involved in which parts. Introduction needs to address the purpose of the project. This element will then lead to a standing offer, fixing the prices for products or services purchased for the project. After that comes a more formal contract that goes into greater detail.

Project Objectives

Creating a purpose statement provides a more thorough answer to the question of why this project is initiated in the first place. It defines the project's objectives, deliverables and returns on investment.

Scope of Work

This element of the statement of work focuses on what work needs to be done in the project. It includes information about both hardware and software necessary and a more detailed explanation of the process, including outcomes, time involved and steps to achieve success. This element also requires you to create a project scope statement to capture all the information about your project scope.

Location of Work

This part of the document notes if the team members will work remotely on the project or if the project is site-specific, contains details about where is it, and where the equipment and software used will be located.


Tasks are created from the general steps that are outlined in the scope of work. By breaking down each step further, you can make sure you didn't leave out any action necessary to produce deliverables and fulfil project objectives. Tasks can also be broken down into milestones of phases, depending on how specific you want to be.

Project Deliverables

Deliverables should be listed down and they should define what is due and when. Besides that, deliverables should also contain details regarding the quality, size, color and other relevant information about them.


This element of SOW includes a detailed list of when the project deliverables need to be done. Timeline begins with which vendor will be selected to achieve this goal, the kickoff, what the period of performance is, the review stage, development, implementation, testing, close of the project, etc.

Testing and Standards

Tesing and standards contain information about industry acceptance criteria or quality standards that need to be adhered to. It also contains a list of who will be involved in the testing process as well as what equipment and resources are needed.

Definition of Success

This element of the statement of work notes on what what the sponsor and/or project stakeholders expect as successful project completion.

Project Requirements

Contains a list of any other equipment that is needed in order for project to be completed. This element also concerns with the skills, education or certifications team members are required to possess.

Payment Terms

For payment terms, you already need to have created project budget. Then, you can start listing the payments related to the project and the way they will be delivered.

Sign off

This element of SOW establishes how the deliverables will be accepted and who will deliver them as well as who will review and sign off on them. It also details other admin duties.

Statement of Work - Download Template

The process of creating a statement of work template can be overwhelming. That is why we are providing you with a statement of work template as an example of how this document could look.

statement of work sample
statement of work example doc

A statement of work is one of many documents needed for managing a project. Other than SOW, there are a few other documents that are necessary for every project manager to create. They are all closely related and used for referencing one another.

1. Master Service Agreement

A master service agreement is a contract that defines the terms that will apply to all future transactions and agreements between two parties. Basic terms and conditions are included in the master service agreement, which can be waived in future legal agreements. You can start a relationship with a customer or vendor with a master service agreement, and then utilise a SOW for each project.

2. Project Charter

The project charter is a document that contains the main project goals and the designation of roles and responsibilities. The purpose of the project charter helps the involved project managers and the stakeholders understand what the given project is supposed to accomplish. It defines the project's scope, offers deadlines and milestones, and provides information on identified risks and the budget. Because of all this, it is often confused with the project statement of work.

3. Work Breakdown Structure

Work breakdown structure (WBS) is a project management method used on a complex, multi-step projects. It divides them into smaller ones that are easier to conquer. This method allows for tasks to get done faster and more efficiently which leads to better productivity and easier management.

4. 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. It provides an overview of project so that the bidding parties have 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.

If you want to boost your project management skills and write these documents with ease, we recommend checking out our PMP Passport course.