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Definition: Statement of Work

What is the Statement of Work document?

A Statement of Work (SoW) is a business document. It defines the contractual obligations of two or more parties. These obligations may be to each other, or other stakeholders may be the beneficiaries of deliverables and activities specified within.

Statements of Work are commonplace in procurement initiatives and the setting up of new projects or services. The SoW document defines what needs to be delivered and how, so they are a valuable tool for account managers, project managers or other stakeholders responsible for service or project delivery. SoW documents used by customers (or other stakeholders) ensure that projects or services, from which they benefit, are delivered in full and to the right quality.

Writing the Statement of Work

Frequently, the SoW is developed by a supplier and presented to a customer to review and sign, following sales negotiations. Several revisions to the document may then be needed then as the customer(s) suggests amendments.

Statements of Work also exist between suppliers (a main contractor) and sub-contractors. Sub-contractors are common on large projects, as one supplier cannot typically deliver all the work themselves. On very big projects, the main contractor just project manage the delivery of the work via sub-contractors. Main contractors use SoW documents to specify what, when and how work is delivered by sub-contractors.

It’s important to note that statements of Work include much more detail than a Request for Proposal (RFP), contract bid, commercial tender, or proposal document which can all include a large number of assumptions due to a lack of detail of a customer requirement. The Statement of Work clears up this ambiguity by providing a sufficient level of detail for work (or a project) to be delivered successfully.

If there is any ambiguity about what is in or out of a project’s scope, a well-written Statement of Work document should be able to provide the clarity that is needed to run a successful project.

What to include in a Statement of Work?

Several different inputs, or factors, can influence the final Statement of Work document, depending on the scenario. Some examples of these inputs are: an understanding of the business or customer need, the business case, the project scope, and the strategic plans of the provider and/or the customer.


A SoW should define the scope of the activities (e.g a workshop), deliverables (e.g. a written paper or report) or products (e.g. a widget) that forms the nature of a project, or project work package. A good Statement of Work will define what is in scope, but also those things that are not in scope.


The SoW should include the timescales or deadlines for when activities are to happen, deliverables to be delivered, and products to be produced. These are the things the customer expects to receive by either the end of the project or by an agreed timescale after the project. On bigger projects, these may be split into key milestones or phases.


Include the KPIs that will be used to keep the work on-track or validate that the outputs and benefits of the project have been received by key stakeholders. What specific quality measures will be used? What standards will be imposed? Who and how should the outputs and benefits be approved or signed off? Is an email sufficient, or should a document be provided and signed?

Invoicing, fees and payment

The SoW should contain details of fees to be paid and when they are due (such as on completion of specific work packages). When performance-related payments apply, then the document must clearly specify the criteria for when and how much will be paid. A transparent and clear agreement will prevent disagreements and reduce the risk of legal action. In the same vein of thought, penalties for underperformance or slipped timelines require equal clarity.

Consider how and work should be invoiced and include payment terms, or reference an organisation’s standard terms and conditions of business.


Another consideration for inclusion is communication. The SoW should make clear the communication and reporting lines, reporting commitments, escalation procedures, key persons, responsibilities, approval processes and regular meetings or activities required between specific people or groups.


If not using a separate risk management log, the SoW is a suitable place to document and rank identified risks and countermeasures proposed to keep the work on track.

Change Management

Changes to an agreed SoW would require a new SoW to be developed to supersede the old document. This also needs to be signed by all parties. A new SoW is a better option than creating addendums to the original document. Addendums can quickly become messy and complicated to review and enforce.

Poor change control and management increase the risk of legal disputes at the time of validating work and paying invoices.

Signing the document

Before stakeholders sign the document, it should be reviewed by a suitably qualified legal representative working for the stakeholder, who may recommend changes.

All parties responsible for delivery, approvals or payments should sign the document and duplicate signed copies distributed to each stakeholder.

When and where is a Statement of Work employed?

The SoW document is very common in consultancies and construction projects. It is used to agree the specifications of a project with a customer and helps provide clarity as well as reduce risk.

A SoW is not just used to define what a customer expects from a supplier, but also helps to de-risk a supplier’s project by outlining what the supplier requires from the customer – such as information to be supplied for analysis, or people to be available for meetings, interviews and workshops.

The document should clarify that in a situation where the customer fails to deliver these requirements, the supplier may be released from their responsibilities (or at least will be exempt from any potential penalties related to sub-optimal performance).

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More resources for the SoW business document:


A Statement of Work document template and example: The template is a worked example of general use. It includes a high level overview, the deliverables in scope, any assumptions that are dependent on their delivery, price / tariffs, schedule and criteria for invoice and payment. The template can be downloaded as a PDF, InDesign or Word file for customisation before use.

Statement of Work (SoW) document template >