# Presentation: 660454

## STATEMENT OF WORK(SOW)

***PERFORMANCE BASED CONTRACTING***

- 25 Sep 2005 M Keeney

## Statement of WorkPerformance-Based Contracting

**   ****Performance-based contracting involves structuring all aspects of an acquisition around the purpose of the work to be performed as opposed to either the manner by which the work is to be performed or a broad and imprecise statement of work.**

- 25 Sep 2005 M Keeney

## Statement of WorkWhat vs. How

**Lower costs**
**Flexibility to achieve a solution**
**Solution is the responsibility on the contractor**

- 25 Sep 2005 M Keeney

**Notes:**
A performance based SOW promises to lower costs for both the customer and the vendor, allows more 
flexibility in developing a solution to the customer’s requirements, and places the responsibility for a 
solution that meets the customer’s requirements on the contractor.

A performance based SOW promises to lower costs for
both the customer and the vendor, allows more 
flexibility in developing a solution to the customer’s 
requirements, and places the responsibility for a 
solution that meets the customer’s requirements on the 
vendor.

## 

A formal written description of your minimum requirements to be performed by a contractor

The “heart of your procurement”

**A formal written description of your minimum requirements to be performed by a contractor**
**The “heart of your procurement”**

- What Is An SOW?

- 25 Sep 2005 M Keeney

**Notes:**
SOWs must reflect the full requirement to include a description of the work to be accomplished, the outcomes or deliverables, any NAFI/Government information to be provided the contractor, All other documents must be consistent with your SOW. We will go into this a litlle later, however some examples are the evaluation factors/criteria, instructions for proposal presentation, 

## Why is a Clear and Concise SOW Important ?

- Provides a clear understanding of the requirements
- Establishes a baseline for proposal evaluation
- Reduces evaluation and negotiation time
- Minimizes need for future changes
- Baselines contractor performance measures

- 25 Sep 2005 M Keeney

**Notes:**
Amendments during the solicitation and evaluation process
Ensures ease of administration – lessens possibility of misinterpretations of requirements.
Additional cost as a result of inadequate specification

## Many Documents Are Based On The SOW

- 25 Sep 2005 M Keeney

**Notes:**
All areas of the RFP are directly related to the SOW.  Refer back to the Acquisition Plan and all the elements that were developed

## 
The following is a summary of the recommended process steps for preparing a Statement of Work SOW :

Establish a preliminary scope statement ( i.e., the purpose or objective of your procurement)
List the tasks to be performed ( i.e., All performance requirements you intend the contractor to satisfy, all requirements that the contractor must comply with during contract performance )
Group similar and related tasks.
Organize the tasks in logical sequence
Identify the input ( Required resources to perform the tasks)
Identify the output ( Required results or deliverables )
Identify the timeline or frequency of the deliverables (output)
Develop the parameters for acceptable quality and performance
Determine how you will monitor the deliverables

**The following is a summary of the recommended process steps for preparing a Statement of Work SOW :**
**Establish a preliminary scope statement ( i.e., the purpose or objective of your procurement)**
**List the tasks to be performed ( i.e., All performance requirements you intend the contractor to satisfy, all requirements that the contractor must comply with during contract performance )**
**Group similar and related tasks.**
**Organize the tasks in logical sequence**
**Identify the input ( Required resources to perform the tasks)**
**Identify the output ( Required results or deliverables )**
**Identify the timeline or frequency of the deliverables (output)**
**Develop the parameters for acceptable quality and performance**
**Determine how you will monitor the deliverables**

**STATEMENT OF WORK**** ** **PROCESS OVERVIEW**

- 25 Sep 2005 M Keeney

## Statement of WorkStep 1

**ESTABLISH A PRELIMINARY SCOPE STATEMENT THAT:**
**Identifies the objective or purpose of the procurement**
**Description of work to be performed**
**Define the magnitude of work to be performed**
**Defines the boundaries of performance and responsibilities**

- 25 Sep 2005 M Keeney

**Notes:**
The scope of work of your SOW should identify the objective or 
purpose of your procurement, and should define the magnitude of the
work to be performed.  It should also define the outside boundaries
of the contractor’s performance responsibilities.  This becomes 
important during contract performance in determining whether 
additional tasks or work is considered within the scope of the 
originally planned responsibilities or is considered new work.

## Statement of WorkStep 2

**List task to be performed that will:**
**Accomplish the objective of the SOW**
**Focus of “what” not “how” the contractor will perform**

- 25 Sep 2005 M Keeney

**Notes:**
Now you should identify all tasks that may be required to accomplish the objective or purpose of the SOW.  
The tasks should focus on what the contractor will be required to do rather than how the contractor should 
accomplish the effort.

## Statement of WorkStep 3

**Group similar and related task**
**Categorize tasks as either major or sub-tasks**
**Add any additional tasks as you work through this**

- 25 Sep 2005 M Keeney

**Notes:**
From the list of tasks generated, now identify the 
major tasks and sub-tasks.  You need to group similar and related 
requirements; make sure you separate the major tasks from one 
another and list the sub-tasks under their appropriate major task.  If 
you find that additional tasks (i.e., major or sub-tasks) are identified 
as you group and categorize, then add them to your outline 
accordingly.

## Statement of WorkStep 4

**Organized task in logical sequence**
**Chronological order**
**Time-phase**
**Discipline**
**Ensure task required meet the minimum requirements**
**Delete unnecessary or repetitive tasks**

- 25 Sep 2005 M Keeney

**Notes:**
The major tasks and their corresponding sub-tasks must be arranged in a logical sequence (e.g., chronological order, time-phase, grouped by discipline 
or task, or some combination).  This is a good time to make sure all the tasks required to meet the NAFI’s minimum requirements and successfully perform the 
contract have been identified.  Repetitive orunnecessary tasks should be deleted at this step.

## Statement of WorkStep 5

**Identify the required resources for each task (input)**
**May be labor, equipment and material**
**May be NAFI or government provided**
**Identify any operating restrictions or procedures**

- 25 Sep 2005 M Keeney

**Notes:**
You need to identify the required resources (the input) for each task in your final task list.  Inputs are the resources such as labor, equipment and material that 
are necessary to perform the task(s).  The identified input will assist you with developing your list of NAFI furnished property and cost estimate.  You will also 
need to identify any NAFI furnished property that is not necessarily associated with a particular task but that will provided as a part of the contract (e.g., office space, 
telephones, etc.).For NAFI furnished property that involves equipment that is being provided to the contractor, you will need to identify the proper nomenclature, quantity, serial number 
and estimated value for each item that will be provided as NAFI furnished property.  In addition, you will need to identify the condition of the property (e.g.,good/ready for 
use, needs repair, etc.), physical location and when the property will be provided to the contractor. 

You will need to identify any restrictions or operating procedures (force protection level, hours of operation )that must be complied with when facilities are provided.  The NAFI furnished property information 
will be included in your acquisition/purchase request package and will be used by your contracting officer to prepare the solicitation.

## Statement of WorkStep 6

**Identify required results and or deliverables (output)**
**Meetings**
**Reports**
**Provides information to develop oversight plan**
**Contractor responsible for the work (input to output)**

- 25 Sep 2005 M Keeney

**Notes:**
You need to identify the output for each task in your final task list.  Outputs are the services (or the results) provided by the contractor and also deliverables such 
as reports, software, designs or hardware.  The identified output will help you develop your SOW, surveillance plan (if appropriate), reporting requirements and 
cost estimate.
Remember, the contractor will be responsible for the work (transforming the input into the output).  Therefore, the output, should not, to the maximum extent 
practicable, include procedures, methods or processes.  The outputs should identify all deliverables required.  These deliverables should:

          1)  Be necessary;
          2)  Meet the minimum needs of the NAFI;
          3)  Be identified in the quantity required; and 
          4)  Have delivery schedules specified.

Reports should be limited to data which are essential to manage and monitor the 
contract (e.g., Labor Management Report, Quality Control Report, etc.) or those 
which are the purpose of the contractor’s performance (Final Technical Report, 
Environmental Impact Statement, Certifications, Permits, etc.).  If you are procuring 
commercial services, then required reports should be limited to those normally 
required in commercial business.

## Statement of WorkStep 7

**Identify the frequency and timeline of deliverables**
**Assists in**
**Refining SOW**
**Method of surveillance**
**Surveillance plan **
**Cost estimate**

- 25 Sep 2005 M Keeney

**Notes:**
You need to identify how often each output will be furnished.  The frequency of some of the outputs will be easy to count or quantify (monthly reports) while others will not (computer systems contract, respond within 2 hours of notification- you will never know in advance the frequency).  You may use any available historical data plus projected changes to estimate how often the contractor 
will be required to furnish the output.  If this procurement is for commercial services, you will need to consider what the standard practices are in the commercial 
marketplace.  You may have found out how often the outputs are provided in the commercial world while conducting your market research.

The frequencies of the output will assist you with developing your SOW, method of surveillance, surveillance plan (if appropriate) and cost estimate.  Potential 
contractors will need to know how often the outputs are required so that they can understand the magnitude of the work and can propose a reasonably accurate 
price.

## Statement of WorkStep 8

**Develop performance standard or acceptance criteria expressed in**
**Quality**
**Quantity**
**Time**
**Appearance**
**Should include elements such as “What, when, where, how many times**
**Should be appropriate for the contract and**
**Necessary**
**Realistic**
**Objective and measurable**

- 25 Sep 2005 M Keeney

**Notes:**
Performance standards or acceptance criteria may be expressed in terms of quality, quantity, time, appearance, etc. and should include elements such as “what, when, 
where, how many and how well.”  These standards do not need to include all of these elements only those that are appropriate to the acquisition.  Performance 
standards or acceptance criteria should be:
Necessary
Realistic
Specific and to the greatest extent possible:  verifiable, objective, measurable

The use of objective performance standards is emphasized since they are easier to enforce than subjective standards when the contractor’s performance is 
unsatisfactory.  Objective standards eliminate personal biases and normally are not subject to different interpretations.Performance standards or acceptance criteria are those performance levels or 
criteria that a contractor must meet to be considered acceptable during contract performance.  These standards and criteria identify what the contractor’s 
performance or deliverable product will be measured against.  The standards or criteria may be published or recognized industry-wide standards or may be 
developed by you and tailored to identify the results needed for your procurement.

Selection of performance standards or acceptance criteria is critical because they directly affect the cost of service.  Therefore, you have to consider the potential cost 
verses the benefit of the standard or criteria.

## Statement of WorkStep 9

**Determine how you will monitor the deliverables**
**Must be appropriate for the contract**
**Cost effective**
**Methods include:**
**100% inspection**
**Random sampling**
**Periodic inspection**
**Customer copleaints**
**Review of progress milestons**
**Reports by contractor**

- 25 Sep 2005 M Keeney

**Notes:**
Some form of surveillance is necessary to determine the acceptability of the output.  The method and extent of surveillance will depend on what is minimally necessary 
to ensure the contractor complied with the performance standard or met the acceptance criteria.  Careful selection of appropriate surveillance methods enables 
you to determine the amount of resources and associated costs needed to monitor and measure contractor performance.
Surveillance may be accomplished by various methods such as 100 percent inspection; random sampling; periodic inspection; customer complaints; review of 
progress/milestones reports (accomplishments or activities completed) interim or final reports; or a comparison of the delivered output to a set of acceptance 
criteria.As you develop your final SOW, keep in mind how you might what to monitor and measure performance or deliverables to determine acceptability.

## Statement of WorkConclusion

**Lastly, the key factor in the success of the Performance Based Contract is the ability of you, the customer, to write good requirements.**

- 25 Sep 2005 M Keeney