Vendor Management: Write Statements of Work That Keep IT Projects on Track

Don't let contractors define their own deliverables. Negotiating detailed statements of work reduces project delays, cost overruns and even the likelihood of failure.

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Watch their language

Vendors frequently insert legal language into SOWs that conflicts with—and may make unenforceable—the terms of the services agreement. For example, vendors tend to insert new limitations of liability, disclaimers of warranties and provisions relating to intellectual property ownership into SOWs. These terms seldom help you and often redefine key provisions in the original agreement that the vendor wants to dilute or override.

Dont let this happen: Except in rare circumstances, once the services agreement has been negotiated, the legal terms should be fixed and uniformly applicable to all SOWs. Otherwise you open the door to contract renegotiation every time you consider a new SOW.

You can protect yourself further by adding language to the services contract that favors its terms over any conflicting language in SOWs, purchase orders or other documents.

A Solid Foundation

Drafting effective SOWs involves preparation, careful attention to detail, and a clear understanding of the business goals and requirements of the project. In addition to avoiding the pitfalls described above, the following steps provide the foundation for drafting effective SOWs:

  • Include an overview section at the beginning of each SOW providing a brief, plain-English explanation of what the vendor is expected to do and deliver. This explanation should be written clearly, so that someone who is not involved with the project but who is generally familiar with technology could understand the services and deliverables the vendor is providing.
  • Include a project plan with a clear schedule for all deliverables and tasks. Don't refer to deadlines as estimates, and don't calculate dates from the beginning of the project without clearly defining the date of that beginning.
  • Remove or limit lists of contingencies on the vendors performance, and carefully check the vendors assumptions about your companys performance. Most of the contingencies are very general, creating an out for the vendor if the customer doesnt meet its obligations and allowing the vendor to charge additional fees. Define your own obligations and performance as precisely as possible.
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