In project management, a Statement of Work (SOW) is a formal document that outlines the entire scope of work involved for a vendor and clarifies deliverables, costs, and timeline. It is a legally binding document that captures and defines all the work management aspects of a project. A SOW is needed when a project involves vendors and external contributors in addition to the internal project team. It is usually created as part of a bid document or part of a contract. The SOW is a comprehensive description of the work to be performed and serves as a contractual agreement between a vendor and a client. It is vital that the SOW is clear to all stakeholders in order to clarify the metrics for success and avoid disputes involving deliverables, budgets, or timelines.

The statement of work should include the following:

• All deliverables and due dates
• The individual tasks that lead to the deliverable, and who these tasks are assigned to
• The resources needed for the project including facilities, equipment, and QA procedures
• The governance process for the project
• Costs and deadlines for payment

There are different types of SOWs, including:

• Performance-based SOW: This focuses on the purpose of the project, the resources, and the quality level expected of the deliverables. It does not, however, explain how the work is supposed to get done.
• Level of effort: This details work hours and any material needed to perform the service over a given time.
• Design: This is focused on the design and development of a product or service. It outlines the specific tasks related to design, such as research, prototyping, and testing.

A SOW is an important part of managing a project, and it helps to avoid conflicts in the project. It provides a structure on which the project plan can be built and helps keep everyone involved in the project on the same page. A clear statement of work should protect against any disputes and negotiations when the project is in motion.