Often I find clients struggling to write their statement of work, not knowing really where to start. While I am a firm believer that writing a good statement of work does not happen overnight, through practice our skills become stronger. Simply put, writing a statement of work does not have to be as challenging as some believe it to be.
NRECA uses a parent-child relationship (as some call it) when it comes to contracting. There is the master agreement that is more or less an administrative document and that sets forth the terms and conditions of the relationship: how are the parties going to act over the life of the agreement when it comes to items such as terminating the contract, breaches and indemnification obligations. Then there is the statement of work that sits below the master agreement — this is what I like to call the meat and potatoes of the deal: what services is the vendor going to do or perform for the organization in a particular instance. A statement of work is the place where the business gets to document their story of why they are hiring a particular vendor and what the vendor is going to do. In other words, it is the formal way of documenting what the obligations are of the parties around a particular delivery of a product or service.
When broken down, a statement of work can be viewed no differently from writing a story consisting of the five Ws (who, what, when, where and why, and sometimes how) we all learned in school. A statement of work usually consists of the following pieces to make up the business story, which can essentially become a working template for any organization:
So the next time you are tasked with assisting in drafting a statement of work or take on the task by yourself, do not feel overwhelmed — take a deep breath and ask yourself, "what is this business story all about?"
Contact:
Tracy Warren , NRECA
Phone: (703) 907-5746
Mobile: (703) 517-3411
WASHINGTON, DC; July 7, 2011 – By the end of July, 2011, the National Rural Electric Cooperative Association will close on contracts worth $13.7 million for smart grid components to be deployed at 23 cooperatives participating in the cooperatives’ regional Smart Grid Demonstration Project (SGDP).
Supported by a matching grant from the U.S. Department of Energy, over the course of the project, participating cooperatives will deploy more than 75 technologies and kinds of equipment in twelve states.
NRECA has made these purchases for research and evaluation of the following smart grid features:
Communications
AMI systems and digital communications software and infrastructure to
enable smart grid features including demand response over AMI, load
management, prepaid metering and in-home energy displays.
Efficiency and Demand Response
Software and equipment to improve efficiency both at the operational and
end-user level, and enable automated demand response and load control.
Components include load control switches, in-home displays, advanced
Volt-Var control, demand response over AMI, meter disconnect collar
sealing kits.
Reliability and power quality
Software and equipment to improve reliability by implementing SCADA,
self-healing capability, power quality monitoring and regulation and
improved conservation voltage regulation.
Distributed generation and renewable energy
Equipment to assist the integration of renewable energy and distributed generation resources.
NRECA has executed contracts with the following vendors: Cooper Power Systems, Inc., HD Supply Utilities, Ltd., Stuart C. Irby Company, Larson Communications, Inc., RFIP, Inc., Ruggedcom, Inc., and VFP, Inc.
|
Contract Type |
Fixed-Price
(Using Firm-Fixed-Price Example) |
Cost-Reimbursement
(Using Time and Material Example) |
|
Basic Description |
A firm-fixed-price contract provides for a price that is not subject to any adjustment on the basis of the seller’s cost experience (other than buyer-initiated modifications such as change orders) in performing the contract. This contract type places upon the seller maximum risk and full responsibility for all costs and resulting profit or loss. It provides maximum incentive for the seller to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. |
A cost-reimbursement contract type provide for payment of allowable incurred costs, to the extent prescribed in the contract. |
|
Application |
Use when requirements and acceptance criteria are known with sufficient accuracy. |
Use when uncertainties involved in contract performance do not permit requirements, acceptance criteria, costs, etc. to be estimated with sufficient accuracy. |
|
Performance |
Deliverable |
Effort |
|
Level of Requirements Detail |
Well-Defined |
Unknown or Broad |
|
Level of Acceptance Detail |
Well-Defined |
Unstated or Vague |
|
Payments |
On Delivery |
As Incurred |
|
Buyer-Specified Type of Resources (e.g., Skills) |
No |
Yes |
|
Buyer-Specified Quantity of Resources (e.g., Headcount, Hours) |
No |
Yes |
|
Contract Administration Effort |
Low |
High |
|
Change Controls |
As Needed |
Primarily for Extensions |
|
Risk to Buyer |
Low |
High |
|
Risk to Seller |
High |
Low |

The Gartner Supply Chain Executive Conference provides a unique
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informal networking
opportunities, including end-user case
studies, workshops and hospitality suites.
Gartner Outsourcing & Vendor Management Summit 2011 (9/12 - 14, Orlando) provides an in-depth exploration of the significant developments and trends shaping vendor and strategic sourcing management practices, as well as the sourcing marketplace.
The Summit provides CIOs, IT Directors, Sourcing Executives, Procurement Managers & Vendor Managers with a useful set of best practices, frameworks and tools to create long-term impact back at the office.
Economic, business and technology changes demand innovative actions from both buyers and providers of IT services in how they form long-term sourcing relationships. In an environment in which consolidation, mergers and acquisitions, and new entrants are the norm, sourcing strategies must become more agile and responsive to change.
At the summit, you'll learn how to: