Business Tips

What to look for in a Scope of Work

Building something without a Scope of Work would be a little like setting off for a work trip without an itinerary. You remember that your flight leaves around noon, but you don’t know the exact time, the gate, or where your layover is and for how long. You also don’t know what time you arrive at your destination or whether you have a hotel reservation. Your boss bought your ticket but he didn’t tell you who was responsible for lodging, him or you.

Do you have time to use the restroom before you go through security? Should you buy something to eat on the plane, or will you have time to do so during your layover? Should you check your bag, or are you connecting in a huge airport like O’Hare, where the trek between gates will be long? And when you arrive, will you need a ride to your hotel—or is it an airport hotel that you can grab a shuttle to?

Talk about flying by the seat of your pants—right? That’s like embarking on a project without a project scope, or a Scope of Work.

Whether you are a general contractor for an upcoming project or a subcontractor preparing to sign on with a GC for a new job, a well-written Scope of Work (also known as a Statement of Work, or SOW) on a project should be high on your list—and may well dictate whether you profit or lose money on the project.

Who prepares the Scope of Work?

The Scope of Work is typically “prepared” by the owner of a project, as in the property owner or developer, or someone working for them—i.e. the project engineer, project manager or construction manager.

What is the importance of a Scope of Work?

The Scope of Work spells out the specific deliverables of a project, so that all parties can agree to them. When bidding on a project, a general contractor will want to see the owner’s Scope of Work so they can assess what the “ask” is as well as the desired completion date. This will give the GC an idea of whether he has the skills and experience to complete this specific project, the wherewithal to gather the right team, and if he feels the timeline is realistic and achievable.

A high-quality Scope of Work also spells out who will be responsible for what. It may be modified once a bid is won to include subcontractors who will be involved for specific tasks. It will state what kind of electrical work has to be completed, and who is responsible for making sure that it meets specifications—as well as who is liable if it does not.

Owners might prefer a contract to be less clear about liability, because then there is always a chance of some liability being assessed on the contractor’s side. Contractors and subs, on the other hand, benefit from very specific Scopes of Work.

What should a Scope of Work include?

A great scope of work can be understood by all parties, leaves no room for interpretation and ensures everyone knows their duties for the duration of the project. Easy, right? If only it were that simple. But here are the essential elements of a good scope of work:

  1. It identifies the General Contractor and other stakeholders. This sounds very obvious, but every party on the project needs to know who they are working with or for.
  2. It’s very clear. A good scope of work is easily understood by both the general contractor and the construction manager. Trade contractors on a project should ask to review a scope of work so that they know exactly what they are responsible for.
  3. There’s a glossary. Not all construction terms are known by every party working on a construction project, and acronyms might mean different things to different trades. The inclusion of a glossary in a Scope of Work gives everyone a quick reference for what terms mean and ensures all parties are on the same page.
  4. It addresses risk allocation and “changes in the work”. You might not find these elements in just any Scope of Work, but a thorough one will have them. Risk allocation simply means that there is language in the Scope of Work that sets up a chain of authority stating who is responsible in the case of miscommunication between owner and contractor, or which documents produced in pre-construction should be interpreted as more authoritative than others. A “changes in the work” clause establishes in advance a process for making changes to the work and pricing those changes. According to a paper for the American Bar Association’s Forum on the Construction Industry, “A clear ‘changes in the work’ clause diminishes the disputes between the parties.”

The Scope of Work is the brain of a project, or at least its memory and higher-level functions. You probably wouldn’t want to travel across the country or overseas without an itinerary or reservations—especially if the trip had an end goal, say to climb Kilimanjaro before the fast-approaching rainy season, or to attend the 2020 Olympics.

In the same way, time is of the essence with construction projects, and profits are hinging on everything going as smoothly as possible. That’s why you should read the Scope of Work carefully, and speak up if something doesn’t seem quite right—before you’re mired in a dispute.