What Is A Statement Of Work?

Jul 16, 2019
Reading Time: 3 minutes
Written by Paul Taylor

With significant growth in development in recent years, you may find yourself at the foot of a big project. You and your business may be responsible for conducting, overseeing, and organising this project. Accordingly, it is good to know how best to equip yourself with legal documentation that can make these mountainous tasks more easy to structure and keep on top of. One of these documents is a Statement of Work. A Statement of Work refers to the engagement of a contractor to carry out an agreed project to its completion. Usually these types of projects are carried out on site for the client and certain deliverables are mapped out in advance.

This document forms part of the overall contract. It is a fantastic way to maintain your client’s expectations. It protects both you and your client from miscommunication, and keeps the project parameters concise and clearly defined. Having this document from the outset of a project will help avoid uncertainty in your work. All of these benefits can go a long way to keeping your head above water during grand scale professional challenges. Regardless of the size of the project, they are useful when you have on-going demands with a client. We have put together some of the key takeaways for you to read about below.

Common Components

Whilst each Statement of Work will vary depending on the circumstances, there are a number of key elements. Common components of this document can often include the following:

  • firstly, the purpose of the work
  • secondly, the scope of the work, which includes what is to be done
  • thirdly, location of the work – this includes the location of hardware, software, resources needed, and and may be across multiple locations
  • it may also include who specifically is doing the work, applicable if you are sub-contracting out some of the tasks – a sub-contractor agreement may be useful in this process
  • in addition, the period of performance, which also includes amount of hours dedicated per day, days per week, and how much time will be billed for this period
  • importantly, the deliverable schedule – this dictates deadlines, and is one of the more integral parts of the document
  • applicable standards of the relevant industry
  • the threshold or standard of acceptance criteria
  • special requirements, including anything which might need to be specified differently about the proposed work
  • type of contract and payment schedule agreed upon – this will depend largely on deadlines, and delivery schedule
  • a miscellaneous section dedicated to any necessary things otherwise not mentioned

Legal Requirements

Under the Commonwealth Procurement Rules, there are a number of specific legal requirements that the Statement of Work must adhere to. As well as the general principles of contract law, these requirements must be met in order to satisfy procurement standards. Under the CPRs, any specifications set out in the document must:

  • not create an unnecessary obstacle to trade
  • when possible, be set out in terms of performance and functional requirements
  • be based on international standards for technical specifications, when they exist and apply to the relevant procurement, except when the use of international standards would fail to meet the relevant entity’s requirements or would impose greater burdens than the use of recognised Australian standards. This would fall within the relevant industry codes of practice.

What if things change during the project?

Work does not always go as planned. Sometimes you might face setbacks. It is important to include contingency plans within the document. These plans might outline leeway with proposed dates in the event that the unforeseen happens. It is also best practice to estimate your deadlines conservatively. Whilst it might be desirable to impress a client with your efficiency, this is no substitute for doing the job properly and dedicating a realistic amount of time to the project. Keeping your clients informed of the difficulty or time-consuming nature of certain tasks is always wise. This way, your clients know what to expect from the start. Some clients may prefer a quicker, cheaper option. This is never worth underestimating costs or time simply to win a bid for a new client. Being truthful to the process is paramount.

It is always best to get a Statement of Work in the frame early on in the contractual process. Making obligations for all parties known at the start of any agreement makes for smooth sailing. If you are unsure about this process, or if you are facing setbacks throughout the project and failing to meet your contractual demands, it is recommended you consult with a contract lawyer for advice. The Australian Government Finance Department lists more information on procurement on its website.

Don’t know where to start? Contact us on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest lawyer marketplace.

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