How NOT to Write A Fixed-Price Scope of Work

Writing a Scope of Work (SOW) for a fixed price contract? To avoid possible disputes or additional costs and time, don’t make these common mistakes!

1. Not being prescriptive enough. Lack of specifics in a SOW and deliverable requirements leaves room for differing interpretations of contract expectations by both parties. And unless you require your offerors to draft a technical methodology that will be incorporated as the final SOW in the award, it also means the vendor’s pricing may be inaccurate or incomplete. A company who is ordering the SOW must be clear about both the final deliverable requirements and how the vendor is expected to achieve the deliverables. If you expect your vendor to meet with specific stakeholders, travel to certain locations, and research specific materials, you must outline that in your SOW. Do you expect the final deliverables to address specific points, and be presented in a certain format? Write those requirements into the deliverable descriptions. If you fail to take these steps, your vendor may not carry out those activities – resulting in deficient data – or may produce a substandard deliverable. If either of these occurs, you’ll likely wind up expending additional resources and time to achieve the quality product you want.

2. Including activities labeled as “if needed”. Statements like this one are a big no-no. Particularly at the solicitation phase, if you don’t know for sure if you need a service/good, then how do you expect your offerors to know if they should incorporate that service/good and applicable pricing into their approach? They won’t know, and you’re likely to end up with proposals that have been prepared with differing assumptions in mind, resulting in a need to reissue the solicitation. If you absolutely are unsure if a specific good or service will be required, and the need to purchase it will not be known until the initial work is done, then include it only as an option in both the solicitation and the resulting award. Have your bidders price out the option and lay out their methodology. This way you can ensure all bidders are on the same playing field and you are thereby meeting competition requirements and conducting proper cost/price analysis.

3. Blurring the lines between the SOW and the Deliverable Requirements. Simply put, a SOW should lay out “how” the vendor will complete the work, while the deliverable requirements will lay out “what” the vendor is producing. Many times, fixed price awards will blur the “how” and the “what”, making the final contract messy and hard to read. For ease of interpretation, keep any activity requirements (the “how”) under the SOW, and any results/end products (the “what”) under the deliverable requirements.