5th Edition PMBOK® Guide–Procurement Statement of Work vs. Project Statement of Work


1. Introduction

The Project Statement of Work is an input to the 4.1 Develop Project Charter process in the Initiating Process Group, in the Integration Knowledge Area.   The output of that process is the Project Charter.    The Procurement Statement of Work is an output of the 12.1 Plan Procurement Management process in the Planning Process Group, in the Procurement Knowledge Area.

The purpose of this post is to make the distinction between the Project Statement of Work and the Procurement Statement of Work.

2. Project Statement of Work (SOW)—What is it?

The best way I can describe the Project Statement of Work is as the “seed” of the project. It is watered during the Initiating Process into the Project Charter which causes it to germinate and become a seedling. The seedling is planted in the ground during the Planning process of creating the Project Scope Statement. It then turns into a plant during the Executing Process (where it is given sunlight and water, analogous to project resources) and Monitoring & Controlling Process (where it is checked periodically to see if there are any adverse conditions such as pests or diseases), and is finally harvested at the time of the Closing Process.

3. Project Statement of Work (SOW)—How does it fit into the flow of PM Processes?

The SOW is the seed or kernel of the idea for the project which is then developed at a high level for the purpose of approval of the project during the Initiating Process Group as process 4.1, Develop Project Charter. As seen in the previous post, this Project Charter, if approved, is developed at a higher level of detail in the Planning Process Group as process 5.3, Define Scope. So here’s the flow of how the documents are connected:

3. Project Statement of Work (SOW)—Who creates it?

This is going to depend on the end result of the project is going to be a product, service, or result that is used internally within the company, or is to be delivered to an external customer.

If the sponsoring organization is the one that is going to use the end result, then the sponsor is the one that originates the SOW. If a customer is the one that is going to use the end result, then the customer is the one that originates the SOW. The SOW may be part of a bid document (request for proposal, request for information, request for bid) or as part of a contract.

4. Project Statement of Work (SOW)—What’s in it?

The PMBOK® Guide references 5 inputs to the 4.1 Develop Project Charter process, two of which are the generic Enterprise Environmental Factors (EEF) and the Organizational Process Assets (OPA), the “company culture” and “company processes” that are inputs to many PM processes. The other three are the Project Statement of Work, the Business Case, and Agreements.

Here are more detailed descriptions of these three inputs.

a. SOW
The components of the Project SOW are as follows:

  1. Business need–why do the project?   It could be because of market demand, technological advance, legal requirement, government regulations, or an environmental consideration.
  2. Product scope description–characteristics of the product, service, or result for which the project is undertaken.
  3. Strategic plan–the project must contribute to the organization’s overall objectives or high-level mission statement

b.  Business Case

How is the business need (the first element listed above) different from the business case? The business case takes the business need outlined in the SOW (element 1 in the chart above) and justifies how the result of the project (element 2 in the list above) will satisfy that need AND align with the strategic goals of the organization (element 3 in the list above).  It is the analysis that ties together the 3 elements of the SOW like so:

c. Agreements

As mentioned above, IF the product is to be made for a customer, then the SOW may come from the contract, a memorandum of understanding (MOU), a letter of intent, or some other form. The key is that the statement of work may come either internally (from the sponsor) or externally (from the customer).

Now that we have established in detail what the Project Statement of Work is, let’s discuss the Procurement Statement of Work.

 

5.  Procurement Statement of Work

The Procurement Statement of Work or SOW is derived from the project scope baseline (which consists of the project scope statement, the Work Breakdown Structure or WBS, and the WBS dictionary), which is one of the inputs to the process 12.1 Plan Procurement Management.    It is that portion of the project scope which is to be included in the procurement contract. As the Project SOW is the “seed” of the project as a whole, the Procurement SOW becomes the “seed” of the procurement, which from the seller’s standpoint will become the seed of that company’s project, which will be to produce and deliver that procurement to the buyer.

Like the Project SOW, the Procurement SOW needs to be clear, complete, and concise (with the understanding that the requirements of being “complete” and “concise” can sometimes seem to be in conflict and need to be balanced).    In terms of being “complete”, it needs to have sufficient detail for the sellers to determine if they are capable of producing that product, service or result.    Such details can include:

  • specifications
  • quantity desired
  • quality levels
  • performance reporting requirements
  • deadlines
  • collateral services required (such as post-operational support for procured item)

The Procurement SOW is then incorporated into procurement documents (another output of this process) used to solicit proposals from sellers.    Examples of such procurement documents include:

  • Request for Information (RFI)
  • Request for Proposal (RFP)

Once the seller makes a proposal to the buyer, the Procurement SOW is refined by both sides and then put into the procurement contract.

Another output of the 12.1 Plan Procurement Management process is the source selection criteria that, together with the Procurement SOW, are put into the procurement documents.    What elements go into the source selection criteria is the subject of the next post.

 

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2 Responses

  1. I passed my PMP today and found your website to be one of the most useful for studying for PMP – even moreso than Kim Heldman’s book.

    Thank you so much!

    • Congratulations on passing the PMP. Because of my love of helping others pass the PMP, I have become the Director of Certification for the Chicagoland chapter of the Project Management Institute. I appreciate your comment, because it validates that what I’m doing is worthwhile and actually does help others.

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