Language Matters: Scope vs. Statement
The recently-published public procurement practice provides Practical Guidance for Distinguishing between Scope of Work and Statement of Work. The idea for the practice topic began by listening to discussions during the development of an online Specifications course and face-to-face workshop, and was confirmed by working on the Specifications practice. Conversations regularly returned to scope of work and statement of work.
Each week, participants wrestled with explanations of what these terms looked like in their agencies, a focus that spotlighted the confusion surrounding the two terms. Scope of work and statement of work were being used interchangeably, the SOW abbreviation could mean either. Were we talking about the solicitation or the contract? Goods or services? Agency outcomes or contractor solutions?
It turns out that the two terms have been evolving. The first Dictionary of Procurement Terms, published in 2007, defined the terms as follows:
Scope of Work/Statement of Work (SOW): A written description of the contractual requirements for materials and services contained within a Request for Proposal. The SOW can be compared to the specifications contained within an Invitation for Bid. A well-conceived and clearly written SOW serves four main purposes:
- Establishes clear understanding of what is needed;
- Encourages competition in the marketplace and promotes economic stimulus;
- Satisfies a critical need of government; and
- Obtains the best value for the taxpayer.
During discussions of the 2011 version of the Dictionary, the desire for distinguishing between the two terms arose. Procurement professionals cited numerous conflicting sources concerning definitions of scope of work and statement of work, and shared their views about how to reach clarity. Ultimately, the two terms were separated and made their way into the 2012 version of the Dictionary. Each term is presented with its own distinct definition.
Scope of Work: A detailed, written description of the conceptual requirements for the project contained within a Request for Proposal. The scope of work should establish a clear understanding of what is required by the entity.
Statement of Work: The response from the supplier/contractor outlining specifically how the supplier proposes to complete the work as outlined in the Scope of Work. It defines what will be done, how, by whom and cost factors.
Scope of Work and Statement of Work were each coming into their own, distinct from, but related to one another. The 2012 definitions drew a connection between scope of work and requests for proposals (RFP). The scope of work laid out what was required, at least, conceptually. The statement of work responded to those requirements with specific details.
Today, the public procurement practice distinguishes between scope of work and statement of work. The definition for each term has evolved. In the current definition, the scope of work becomes the basis for any resulting solicitation whether Invitation for Bids or Request for Proposals. The statement of work becomes the basis for the contract.
A scope of work is developed at the beginning of the procurement cycle and is a written description of the entity’s needs and desired outcomes for the procurement and becomes the basis for any resulting solicitation. The scope of work helps to ensure that the product or service meets the stated outcome and establishes the parameters of the resulting contract.
- A scope of work must provide sufficient information for the supplier to:
- Determine whether the solicitation aligns with their business.
- Decide whether responding to the solicitation is profitable and worth the effort.
- Determine whether they can submit a responsive and responsible offer.
This January, an NIGP webinar featuring the task force presented examples of scope of work and statement of work in both an IFB, with its corresponding bid and contract, and an RFP with its corresponding proposal and contract.
The webinar revealed the transformation of a scope of work into the statement of work and resulting contract. Practiced this way, the procurement professional can much more easily match the offeror’s detailed statement of work to each requirement of the scope of work.
The scope of work evolves into the statement of work during the procurement process and differs depending on the solicitation method used, i.e., IFB vs. RFP. With an IFB, the agency knows the requirements and is interested in the lowest price for a responsive bid and responsible bidder. The transformation is more visible in an RFP, with a scope of work that describes a desired outcome without specifying how to achieve that outcome. The offeror responds with a proposed solution, negotiations may be conducted, and the resulting statement of work becomes the basis for the contract.
The statement of work is a written description in the contract detailing performance expectations and deliverables between the contracting parties. After a supplier has been selected, the statement of work becomes the basis for the contract and must provide sufficient information to:
- Meet the entity’s needs and achieve successful outcomes.
- Describe and define the expectations of the parties.
- Set price and payment schedules.
- Mitigate or avoid disputes.
Why distinguish between scope of work and statement of work? Procurement progresses more smoothly when we communicate with the same “thought bubble” over our heads. Sharing the same terminology helps establish a professional language and elevates the public procurement profession. Distinguishing between the scope of work and statement of work helps us clarify and conceptualize what we are doing. It draws our attention to what changes and evolves during the procurement process, and provides another example of the continuous growth and refinement within our profession.
Whether developing a public procurement practice document or planning a procurement, we are most effective when we start with a shared understanding. Using “SOW” creates confusion. One person may interpret SOW as contract, another may infer solicitation, and others may be thinking services or outcomes or specifications. Let’s transform our operations by using a precise and shared terminology, accessible to us through the useful guidance and clear definitions in this public procurement practice. Practical Guidance for Distinguishing between Scope of Work and Statement of Work is available on the NIGP website.
NIGP Global Practices Manager Lisa Premo collaborates with public procurement practitioners and academics to conduct research and develop useful guidance on public procurement topics. The task force that developed the public procurement practice includes Sally Barkley, CPPO, PMP, C.P.M., M.B.A.; Terri Gerhardt, CPPO, CPPB; Jon Walton, CPPO, CPPB, JD, CPM; Christine Weber, CPPB, C.P.M.; Kevin Yin, CPPB.