How to Prepare a Procurement Statement of Work
As a Project Manager, you are responsible for acquiring project resources from outside your organisation at a fair and reasonable cost and in an efficient and appropriate manner.
You are the project manager for a brand of organic pasta source. In order to meet the product launch deadline. You purchase tomatoes from a wholesale distributor in South America. unfortunately, the tomatoes that arrive are small, green and hard.
Immediately, you call your seller to let him know that you wanted large, red, juicy tomatoes to meet the recipe requirements. You seller says ” Your ordered tomatoes and we sent your tomatoes”.
Clearly , describing the exact type and specifications of the product you want to buy from the supplier in a procurement Statement of Work ensures that you will avoid costly outsourcing errors.
An effective Statement of Work describes the work being procured in sufficient detail so that potential sellers can evaluate their capacity to perform this work. .In addition, the procurement documents during the solicitation process.
#1 Review the product description
There is a need for you to review the product description to ensure that you fully understand the scope of the work being procurement.
#2 Consult technical experts
You have to consult technical experts to define specifications clearly, concisely, and completely.
#3 Use the right format
If your organization has a preferred or mandated procurement SOW format, be sure to use it and comply with any standards and polices content. if there is no standard procurement SOW format for any organisation, you may be able to modify a procurement SOW from a previous, similar project.
#4 Logical sequence
There is a need for you to present the information in a logical sequence. You have to make sure that they are arranged in such a way that the conclusion can be drawn from the documents.
#5 Consistent terminology
There is a need for you to use consistent terminology throughout the time that you are preparing the document. You also have to make sure that you provide clarifications or definitions that you feel stakeholders will find difficult.to understand.
#6 Collateral service
You have to determine whether any Collateral service will be required of the seller as a part of the contract. What are the seller’s performance reporting requirements? Will the seller be required to provide any post-project operational support?
#7 Acceptance criteria
There is a need for you to determine the acceptance criteria for the products and services. The company awarding the contract must have come up with terms and conditions that must be met before the contract can be accepted.
#8 Vital elements
You have to make sure the procurement SOW includes the following key elements: Clear identification of the project name and deliverable name or identification number. A clear description of the deliverable. When, where and how delivery is required. Specifications to which the deliverable must be produced and methods for ensuring that the specifications have been met. Acceptable standard for the deliverable. Documentation requirements the seller must complete as part of the bidding process(references, compliance documents, confidentiality agreements
You got to have the procurement SOW reviewed by a knowledgeable third party to ensure that it is complete, correct and understandable.
Above all, you need to document a make-or-buy analysis decision for the contract.
The City of Butterfield Visitor’s Association decided to hold a public carnival or increase tourism to Butterfield. To create a procurement SOW for the project, the project manager Racheal, enlisted the help of her organisation ‘s chief negotiator and a lawyer. She also hired a consultant to define the specifications of the various carnival rides and attractions that will be utilized.
The organisation had no existing preferred SOW format, so the project team researched SOWs used by other companies for similar events. The SOW is laid out in a logical sequence and uses consistent terminology throughout.
The statement also defines acceptable service criteria and includes key elements such as a schedule and acceptable standards. before sending this SOW to prospective bidders, the project team had the document reviewed and validated by an independent legal firm.
Skills necessary to prepare SOW
To prepare a procurement SOW, you will need to identify procurement resources with the necessary expertise. If a formal contracting group or department within your organization is not available to support you in your procurement efforts, you will need to obtain those resources and expertise from within your project team. Some of the skills and expertise required for a full-blown procurement effort include:
- Supplier base and supplier qualification
- Contracting expertise
- Legal service
- Knowledge of company policies and forms.
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