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Outsourcing & Engagement Models

Statement of Work (SOW)

A statement of work (SOW) is the project document that defines what a vendor will deliver under a services agreement: the scope, deliverables, milestones, timeline, acceptance criteria, pricing model and responsibilities of each side. A statement of work usually sits under a master services agreement, which holds the general legal terms.

The SOW is where most outsourcing disputes are won or lost. Vague phrases such as "a user-friendly admin panel" invite disagreement; specific deliverables with acceptance criteria, such as which roles exist and what each can do, give both sides the same definition of done.

An SOW should also state what is out of scope, who provides content, access and test data, how changes are requested and approved, and how acceptance works. On time and materials engagements, the SOW describes the team, rates and reporting rather than a fixed feature list.

Scope and deliverables

What will be built, and what is explicitly excluded.

Milestones and timeline

When each deliverable is due and how payment links to it.

Acceptance criteria

How each side will agree that a deliverable is complete.

Change process

How new requests are estimated, approved and billed.

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Statement of Work (SOW)
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Common questions about statement of work (sow).

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  • A master services agreement (MSA) sets the general legal terms of the relationship, such as IP ownership, confidentiality, liability and payment terms. A statement of work describes one specific project under that agreement. One MSA can have many SOWs over time.