June 18, 2021MAINTENANCE
How to Write a Statement of Work (for Maintenance Pros)
Have you ever found yourself in disagreement with a contractor?
It happens more often than people realize.
Just ask Ted, the maintenance manager at a Florida concrete plant.
He recently outsourced a specialist to troubleshoot one of his facility’s screw conveyors. It’s a critical machine that transfers materials from cement silos to powder-weighing hoppers.
No one had the necessary skills to fix the issue, and the equipment was essential to meeting his weekly production goal. So, Ted rushed the hiring process and accepted an exceptionally low offer without conducting his due diligence.
The worst part? Ted knew the disagreement could have been avoided had he outlined a Statement of Work (SoW). Doh!
A documented contract with a conditional clause—both parties must agree on extras not included within the original scope in writing—would have protected him from “scope creep.”
Regardless of industry, every project manager should know how to write a statement of work! In this article, we’ll dive into everything you need to know about this crucial project management tool.
How to Write a Statement of Work (for Maintenance Pros)
Before we begin, let’s clarify what a Statement of Work is and isn’t.
What Is a Statement of Work Document?
A Statement of Work (SoW) is a formal document that outlines essential project details such as objectives, expectations, timelines, and prices.
Also referred to as a project charter, and scope, it provides project management teams, third-party contractors, and stakeholders with agreed-upon guidelines for working together.
Most often, managers draft a Statement of Work as an appendix to the terms and conditions of a binding contract. Essentially, the SoW provides parameters that keep everyone on the same page.
Statement of Work vs. Contract of Employment
Though a Statement of Work is a contractual agreement, it doesn’t function as a “binding document” on its own. Alternatively, the SoW can (and should) evolve in response to early negotiations between project managers and contractors.
Translation: your contractor may return your initial draft with requested modifications. Why? Because it hasn’t met their acceptance criteria.
Contract of Employment Definition
A Contract of Employment is a binding document signed between the two parties once a work agreement has been reached. After which, the project kicks off according to a timeline.
With that said, there are no legal requirements to use written Contracts of Employment in most U.S. states. As a result, it’s not uncommon for small businesses to rely on verbal agreements alone.
When properly executed, both documents safeguard businesses and contractors from costly misunderstandings. In summary, the SoW ensures that contractors complete deliverables on time, on budget, and according to quality standards.
3 Types of Statements of Work
Generally, project managers categorize Statements of Work into three types:
- Level-of-Effort: Also referred to as Time and Materials or Unit Rate SoW, this type of agreement provides a general description of services rendered over a specific amount of time. Hourly contractors who want to maintain adaptability after delving into less familiar project requests often prefer this method. Additionally, organizations also use it to set clear expectations for deliveries.
- Performance-Based: This type of SoW outlines a project’s goals, resources needed for completion, and suggested milestones. The primary focus of the performance-based SoW is the outcome, not the process. Thus, the organization grants the contractor the freedom to determine how to perform each task best. Government institutions use performance-based SoWs because they want to completely hand off unfamiliar projects to qualified experts.
- Design: Unlike performance-based SoWs, design SoWs detail exactly how workers should complete tasks. They include information on all job requirements, including materials, measurements, and quality-control standards. In contrast to the other types of SoWs, this type of agreement places the bulk of the risk on the client’s shoulders.
Now, let’s dive into the advantages of using SoWs.
Benefits of Using SoW
It’s not uncommon for new project managers to see the SoWs as an “annoying formality” before drafting final contracts. And we don’t blame them.
Thinking about the individual steps involved in completing a complex project and the many potential scenarios that can occur may feel intimidating.
But a thoughtfully constructed SoW is worth its weight in gold! Writing a good one provides several benefits, including:
1. Mutual Understanding of Expectations
As mentioned above, a Statement of Work outlines project requirements, workflows, parameters, and prices. It also defines expected deliverables to avoid confusion between contractors and clients over expected outcomes.
This detailed approach employs several layers of protection. It eliminates any surprises about how contractors will complete jobs, what steps they will take, and how much money they may charge for necessary equipment parts, project tools, and hours clocked.
2. Confident Decision-Making
A Statement of Work provides contractors with the information they need to make choices with confidence in the face of unexpected obstacles.
A clear SoW specifies when a contractor should “make the call” to move ahead versus when they should stop and ask for input. The precise language around potential roadblocks helps streamline project timelines, prevents revision requests, and reduces unnecessary management involvement.
3. Quicker Project Approvals
Seeking budgetary support for an unexpectedly expensive equipment repair? A well-documented SoW will likely speed up the approval process. Thoroughly researched estimates and clearly articulated mission statements provide executives with the information they need to sign off on unexpected requests for capital.
Alternatively, informal emails that fail to convey the importance of outsourcing, and their projected costs, often result in delayed decision-making. Why not proactively answer the questions you know organizational leadership will ask ahead of time?
4. Money Saved
The most apparent reason to construct an SoW is to avoid or minimize extraneous spending. Again, this is the biggest fear of executives signing off on contracted projects, and rightfully so. We’ve all heard stories of runaway project timelines coinciding with hefty service fees.
The web design community is particularly rife with horror stories told from both client and freelancer perspectives. Organizations routinely receive disappointingly mundane or poor-functioning Websites that don’t meet their expectations. Alternatively, design agencies sometimes lose money from over-delivering because of scope creep.
If your SoW details explicitly which types of tasks should be included and which should not, you will never end up with an unpleasantly surprising bill of services (like Ted from our introduction).
5. Time Saved
In addition to the time saved not having to coordinate with contractors over minute details—it’s all covered in the document—SoWs save time from not needing to draft additional forms of paperwork.
Request for Proposals (RFPs) and Master Services Agreements (MSAs) are other project management documents that require extensive details. A Request for Proposal is a document that managers use to procure goods or services through formal bids.
And a Master Services Agreement (MSA) is a contract that outlines the responsibilities of organizations and contractors who consistently engage in business with one another. For example, fast-food restaurants routinely require certified maintenance technicians to perform preventive maintenance on complex pieces of commercial kitchen equipment.
In such instances, the parties could save time by developing an MSA to serve as a recurring agreement for ongoing business. Should management need to create an RFP or MSA, they can quickly pull information from their SoW instead of scrambling to hash out the details.
Now that we’ve discussed the benefits, let’s dive into how to write a statement of work.
8 Elements to Include in a SoW
At this point, we’re probably in agreement that every project, regardless of the size, should include a Statement of Work. But what exactly should that include?
The length of SoWs can vary significantly by project type, organization, and industry. Incorporate the following primary sections in your Statement of Work as a starting point:
1. Purpose Statement
Begin by outlining the purpose of the project. What do you want the contractor to accomplish? How will a successful outcome benefit your organization? For example, the objective of a systems upgrade project may be to improve data security and build a more effective eCommerce website.
2. Project Scope of Work
This section emphasizes which type of tasks fall into specified project parameters and which ones don’t. Describe the type of work the contractor will complete, how they should do it, and the project time frame. Additionally, provide an overview of the procedures, tools, and information needed to complete the project.
For larger projects, break individual tasks into realistic start dates and completion dates. Grouping components into bite-sized assignments makes it easier to track progress along the way. In addition, this will help you accurately assess how long the entire project will take.
A good SoW includes the projected results for the contracted job at hand. What outcomes do you expect your contractor to produce for the organization? Provide a detailed explanation of what you are looking to achieve. Include necessary processes, quantifiable deliverables, and the roles responsible for making it happen.
5. Testing Standards
Highly regulated industries, like manufacturing, must comply with established regulatory standards for stakeholder health and safety. If your organization falls into this category, dictate any compliance requirements your contractor should be aware of. In addition, outline company-specific quality control standards to be followed.
6. Payment Terms
This section’s requirements are pretty self-explanatory. List the agreed-upon pricing, terms of payment, and payment schedule. Don’t forget to factor in the cost of labor, third-party expenses, and other essential details. Your organization can pay according to milestones or on another type of fixed schedule.
Include a clause clarifying which party should foot the bill for unexpected setbacks. This step is especially crucial for projects that demand agile timelines from the beginning. According to the Project Management Institute (PMI), 43 percent of projects fail because they exceed their projected billable hours.
7. Special Requirements
Sometimes you may want to communicate relevant information that doesn’t fit into the previous sections. In this case, create a “miscellaneous” section to include, for example, information about travel requirements, security clearances, and other valuable facts.
8. Expected Outcomes
Again, be clear up front. Describe your requested outcomes: what will constitute success versus failure? What will be the criteria for measuring success? How do you expect the contractor to communicate with your team? Articulate who will accept, review, and sign off on the deliverables.
Finally, describe how your organization will archive project records. We recommend using work order software like MaintainX to maintain digital audit trails of all maintenance-related projects.
How to Write a Statement of Work
The best approach for drafting your Statement of Work will depend on your industry and type of project. However, use the following tips to optimize the process regardless of your specific situation:
- Break Project into Stages: As mentioned above, dividing the project into specific tasks makes it easier to predict overall timelines and plan accordingly. In addition, it provides both the contractor and the organization with a less overwhelming view of what must be done. This simplified strategy reduces the likelihood of overlooked details.
- Include Project Team Members: Ask experienced team members to review your first draft. A fresh set of eyes may notice missing essential details, incorrect information, or unflattering grammatical errors. But, most importantly, proofread your final budget estimates for potential mathematical errors—it happens!
- Use Precise Language: The purpose of the SoW is to keep everyone aligned with expectations before, during, and after the project. Therefore, write in a manner that leaves no room for misinterpretation. Use simple language, avoid unfamiliar acronyms, and provide examples of how to navigate potential situations on the job.
- Stay Flexible: One of the most challenging aspects of writing a Statement of Work is balancing the need for specificity vs. the need for flexibility. It’s not uncommon for changes to occur midway through a project. As The Digital Project Manager points out, rigid SoWs may cause contractors to engage in unnecessary steps after determining they’re no longer necessary.
Now that you know how to write a Statement of Work, you may find it helpful to use a template. A good template can save you time, energy, and revisions by providing a proven starting point for success. Essentially, it ensures you cover all of the elements mentioned above in the writing process.
What Is a Statement of Work Template?
A Statement of Work Template is a sample document that already has the sections you need in place. Just customize your SoW template with your unique project objectives, deliverables, and specifications. Here’s an example of a basic template broken into three parts:
Streamline Project Management with MaintainX
Congratulations—you now know how to write a Statement of Work!
The importance of SoWs cannot be understated. Agreed upon parameters yield successful project outcomes by specifying deliverables, lifecycles, and costs. On the other hand, unspecified terms can often lead to unpleasant contractor interactions (to say the least).
If you’re looking for additional ways to increase quality control, and control spending, we invite you to check out MaintainX work order software:
Use MaintainX’s “Email to Vendor” function to send maintenance project instructions to third parties. Our mobile and desktop software makes it easy to share essential documents both internally and externally, ensuring everyone is always on the same page.