3210 PR.04 Statements of Work
2. Requirements for Inclusion with Services Agreements
3. Format for Statements of Work
4. Completing the Statement of Work
This procedure supports Policy 3210 Purchase Contracts. It provides guidance on statements of work (“SOW”), describes the appropriate format, and explains each element to be included in the SOW.
A SOW, also sometimes referred to as a Scope of Work, is a contractual document that describes the services a Supplier will perform under a Services Agreement, and the requirements and expectations for those services. It should include, among other things: a project overview; a detailed description of the tasks that will be performed; a timeline for the performance or delivery of services; key milestones and deliverables; rate of compensation; and a clear payment plan connected to a defined approval process of specific milestones completion and/or deliverables, prior to issuing payments.
All University Services Agreements must include an adequate description of the work to be performed and the price for the services. Unless the Procurement Department approves an exception, all University Services Agreements that are memorialized on Form 3210 FR.01 Services Agreement must include a SOW. The SOW forms part of the contract and must be included as an attachment (typically as “Exhibit A”) when the Services Agreement is executed.
Form 3210 FR.05 Statement of Work/Exhibit A to Services Agreement is appropriate to use for a wide variety of services. Depending on the complexity and specifics of a project, a different format may be used as long as the SOW contains all of the information detailed in Form 3210 FR.05 Statement of Work/Exhibit A to Services Agreement, including at a minimum:
- Project overview (objective, scope);
- A detailed description of the services to be performed (including location of work);
- A detailed and clear timeline;
- The milestones for completion of the services, if applicable;
- A description of the deliverables;
- Supplier resources on project;
- Requirements of Yale (resources, equipment, facilities access etc.);
- An account of all checkpoints and approvals, if applicable (including process for issue escalation with the Supplier, process for project changes arising from the Supplier;
- Pricing and payment plan;
- Service level agreements and/or key performance indicators, if applicable; and
- Any additional project-specific terms that are not covered elsewhere in the contract.
If a project is unusually complex or costly, involves a high degree of risk of injury to persons or property, or if it has the potential to significantly disrupt the University’s operations if the services are not performed correctly or in a timely fashion, please consult with Procurement for guidance on the appropriate format and additional SOW requirements that may apply.
Provide a description of the project and the business need and include a high-level summary of the services the supplier will provide.
B. Description of Services
Include a detailed description of all services the Supplier will provide to the University. It is very important to describe clearly and accurately what the University expects from the Supplier.
This section should be specific and comprehensive enough that, if a dispute were to arise about whether the Supplier has performed the services promised, a third party with little or no background knowledge about the transaction would be able to evaluate whether the Supplier has performed as promised.
C. Timeline and Milestones
Milestones are the key events by which the success of a project is measured. There are different ways to organize a project’s milestones and the appropriate approach to milestones will depend on the specifics of each project. Typically, milestones are listed chronologically, often described as “phases” with a predetermined length. Together, the milestones or phases form a project timeline.
Please consult with the Procurement Department if you have questions regarding how the milestones should be drafted.
The project deliverables are the tangible or intangible products or results the Supplier will provide to the University. A deliverable could be written work product, such as a report. Or it could be a software that achieves a specified objective, or a measurable improvement to some process or system of the University.
The deliverables should have as much detail as possible, including any specifications and requirements the University has regarding the anticipated performance, output, or results. Having these details helps to ensure that the University will have a remedy if the deliverables do not conform to the University’s requirements.
If the SOW involves consulting services, consider what kinds of work product the University will receive from the Supplier (e.g., monthly progress reports and required content; other written work product; final report and required analysis).
Whenever possible, the deliverables should have concrete deadlines that are integrated into the milestones.
A SOW generally should include an approval process or checkpoints for deliverables that are tied to the University’s payment obligations. The University should not pay for a deliverable until the University project manager or other responsible Yale employee confirms that the deliverable is satisfactory. Similarly, the University should not make final payment to a Supplier until the University project manager or other responsible party confirms that all services have been satisfactorily performed.
When establishing the University’s checkpoints/approvals, consider:
- Who should review and approve the deliverables?
- Is there a need for a formal checklist outlining each deliverable on which the parties can memorialize the approvals?
- Are there specific criteria the reviewer will apply when reviewing the deliverables and do those criteria need to be specified in the contract?
- At what point(s) during the project should checkpoints/approvals be introduced? (checkpoints early in the process may ensure better outcomes).
This section should detail the amounts the University will pay for each phase of the project. It may include the hourly rates and anticipated time the Supplier will spend delivering services for the University, and any additional cost breakdowns. If applicable, it should also include the costs of goods the Supplier will use or supply in performing the services.
The payment section should also contain a payment plan. The payment plan should outline the frequency and amount of the payments. Wherever possible, each payment should be linked to a deliverable or a milestone and released only after the department’s review and approval.
University personnel should not pay in advance for services, except in limited circumstances. For example, partial advance payments or deposits may be appropriate where the Supplier needs to incur costs (e.g., for manufacturing or procuring goods related to the services) prior to beginning work.
Where necessary, complex cost breakdowns and associated payment plans may be described in a separate exhibit attached to the Services Agreement.
G. Additional Information
This section of the SOW should include any additional project-specific terms that are not covered elsewhere in the Services Agreement. The SOW terms must not conflict with the terms of the Services Agreement, as the Services Agreement’s terms will generally prevail over the SOW.
Please consult with the Procurement Department if you have questions regarding whether the terms in the SOW conflict with the Services Agreement.