Statement of work – the basis for an offer

Gov­ern­ment-financed projects don’t just go out to the first best company. By the same token, national and local au­thor­it­ies cannot just receive offers from companies that, in their opinion, are a good match. UK pro­cure­ment policy is subject to the EU Treaty prin­ciples, which since the 1970s, have adopted le­gis­la­tion to ensure that the EU public pro­cure­ment market is open and com­pet­it­ive.

These laws state that every company, or­gan­isa­tion, or in­sti­tu­tion es­tab­lished in the EU has the right to compete for a public tender. After they’ve fa­mil­i­ar­ised them­selves with the contents of the given tender, companies are able to apply for the tender with relevant documents. In this process, the statement of work is a key component of these files. It provides a detailed overview of what services are expected and under which cir­cum­stances they should be fulfilled.

What is a statement of work? The term is actually quite self-ex­plan­at­ory. Depending on from where you’re standing, it describes the specific services that are required. But it’s a little more com­plic­ated than that, as this key component of bidding for a public tender has very specific re­quire­ments.

A statement of work forms the basis for all incoming offers. In their offer documents, bidders are invited to go over the specific points in detail, by de­scrib­ing what services they can provide under which cir­cum­stances and at what prices. As such, a statement of work must be as detailed and precise as possible, so that the bidding companies clearly un­der­stand what the employer is asking of them and if or how they’re able to do this. At the same time, it shouldn’t include any details that might exclude certain companies right from the start, although their pro­fes­sion­al field might suggest that they are well suited for the project.

In practice, a statement of work comes in two different forms:

• Service spe­cific­a­tions: Here, all re­quire­ments and details for the com­ple­tion of the project are listed with partial services. The advantage of this is that the applicant can not only see the project’s goal but also the required partial services that feed into the goal. As such, they’re able to un­der­stand what resources are required and what kind of tasks they’ll be met with. The im­port­ance of the in­di­vidu­al partial services are also included in detail, so that the con­tract­ing authority can not only see under what cir­cum­stances ap­plic­ants will complete the project, but also what kind of in­stal­ments the total cost is made up of.
• Service program: This kind of statement of work only describes the end result (the goal of the project). There is no catalogue of services; bidders need to define the partial services them­selves, which con­trib­ute towards the project’s goal. The con­tract­ing authority then chooses which concept matches the re­quire­ments mapped out by the project leader, and which method is deemed as the most efficient.

A statement of work must fulfil specific re­quire­ments, which are outlined in a writing guide developed by DPM. This article explains what to bear in mind when for­mu­lat­ing the service re­quire­ments:

• A statement of work must be described in as a much detail as possible and be clearly for­mu­lated (duration, amount, quality, cir­cum­stances)
• An exact de­scrip­tion of function and service re­quire­ments must be included
• Com­pet­en­cies and/or technical spe­cific­a­tions required to complete the project must be named
• National and in­ter­na­tion­al law and norms that are essential for the project’s com­ple­tion must be named

For many of these points, a level playing field that provides all in­ter­ested companies with equal op­por­tun­ity is key. That’s why the project de­scrip­tion em­phas­ises the im­port­ance of clear wording that can be un­der­stood in the same way by all in­ter­ested parties. At the same time, the de­scrip­tion of services can also not be too specific, as to dis­qual­i­fy certain companies from par­ti­cip­at­ing. As such, specifics like the names of tool and machine man­u­fac­tur­ers cannot be mentioned, when the task could be completed just as well with other technical equipment. By the same token, the service de­scrip­tion may not be tailored to the skills of a par­tic­u­lar company and their method of working.

By reading the various re­quire­ments of a proper statement of work, it’s easy to un­der­stand why it plays such a central role in the award procedure. First of all, it makes sure that (often highly sought after) projects ad­vert­ised by public entities are open to all companies within a given field of activity, as long as they meet the project’s re­quire­ments. Whether you’re an industry-leading mega brand or a medium-sized business doesn’t matter.

At the same time, a clearly written statement of work makes it easier to compare incoming offers. This will make the work sig­ni­fic­antly easier for the awarding entity. The ones re­spons­ible for this task don’t have to sift through a massive pile of offers with com­pletely different struc­tures, but can see at first glance to what extent an applicant meets the required criteria. This, in effect, permits a fast and fair award procedure.

After the award procedure, both the con­tract­or and the client will continue to benefit from a clear statement of work, as it serves as the basis for the contract. As such, key points within the contract don’t have to be rewritten. Instead, only the missing details and the terms and con­di­tions need to be ironed out. But after having run through such a detailed award procedure, both parties will already be on the same page about key points.

Please note the legal dis­claim­er relating to this article.