What is the SOW or "Statement of Work" contract for?

September 17, 2021

Tags: IT Staff Augmentation


Once the confidentiality and the bases of the working relationship are agreed, the partner has to present to the client the Statement of Work, the contract that describes the commercial proposal and the details of the service it will provide to the company. Define everything that will happen in the project in terms of operability, that is, type of service, hours of work, prices, requirements, among other details.


Between a client and the partner there may be several SOWs, each one referring to different services. The partner can write one SOW for the Staff Augmentation service, another for Managed Teams, and so on.


Clauses contained in a SOW or Statement of Work


Before signing the contract, you should pay special attention to these clauses:


  • Requirements


Here the availability and schedule of the partner is described to meet the requirements of the client. This is very important so that any type of doubt, adjustment and request is made in the corresponding period of time and is channeled efficiently, without delays or downtime.




  • Deliverables


In this clause, it is made clear that the partner's team has the commitment to provide deliverables to the client in the period of time that both parties establish, which show the progress of the project based on the tasks assigned in the week or in the sprint.


It is also defined who is going to assign the tasks to the partner's team: in most cases, it is the client who will assign the tasks or tickets to external resources, also monitoring their execution.




  • Compensation and billing


Although it is an issue that is discussed at the macro level in the MSA (Master service agreement), the Statement of Work discusses the economic issue in greater detail. This clause sets the total cost of the service and the period of time in which the payment can be made.


The partner also drafts its procedure for situations such as late payments or lack of. In both cases, generally, compensation is stipulated that can be agreed by both parties. It is important that, if any of these scenarios occurs, the attitude of both the client and the partner is one of reconciliation. Before reaching a major conflict, you should try to negotiate harmoniously and honestly, to reach an economic agreement that benefits everyone.




Performance period


This clause defines in detail the members of the partner's team who will work for the client, how many developers, project managers, QA and what professionals are needed for the development of the project. The name of each of these roles is also reflected, as well as the number of work hours that they are going to fulfill.


Read these clauses of your SOW very well before signing it, since each of the tasks that the technology partner will execute in your project depends on this document. At Rootstack, we have more than 10 years of experience advising different companies. Let us help you with your projects!

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