The Foundation of Successful Contract Performance
Why They Can Miss the Mark, and How to Make Them More Effective
Work statements are the foundation of any successful contract. Whether they result in groundbreaking prototypes or the delivery of vital information technology (IT) services, the effective development and definition of work statements pays significant dividends to agencies or organizations for current and future needs. Not only do work statements describe the scope of requirements and tasks, but they also bound us to other aspects of contracts; in their “Cost Estimating and Assessment Guide,” the Government Accountability Office (GAO) emphasizes the importance of work statements for maintaining costs that are traceable and based on a work statement’s Work Breakdown Structure (WBS). Whether it relates to scope, cost, or any other aspect of a contract, work statements have an important role. So, what is a work statement exactly?
Contracting professionals are most familiar with three types of work statements. Each differs in the level of details it provides. The Statement of Work (SOW) clearly defines an agency or organization’s requirements to produce goods or services; often times an SOW not only defines the outcome but also the method in which work must be completed. A Performance Work Statement (PWS) on the other hand, grants the contractor additional flexibilities—a PWS defines results in clear, specific, and objective terms with measurable outcomes, however, the contractor is free to employ methods that achieve results so long as they are within the bounds of measurable outcomes. Lastly, the Statement of Objectives (SOO) maximizes contractor potential whereby agencies or organizations establish high-level performance objectives where contractors can develop a wide range of innovative approaches and solutions.
Despite the differences in these work statements and the methods used to define and bound contract performance, contracting professionals may frequently find themselves re-analyzing a contract work statement post-award and questioning a work statement’s accuracy and efficacy. Even when an Integrated Product Team (IPT) of contracting professionals, technical stakeholders, and Subject-Matter-Experts (SMEs) develops the work statement prior to award to describe aspects, such as methodologies, metrics, and scope, find the IPT’s development efforts will not meet expectations. Why does this happen?
Why do work statements go wrong?
Contracting professionals may sometimes find themselves in the uncomfortable position of repairing the work statement of a poorly performing contract. By repairing or incorporating uncaptured elements in a work statement post-award, the risk of additional costs increase. However, incorporating uncaptured or omitted requirements in a work statement can present legal challenges if these changes deviate significantly from the original solicitation (significant changes to a work statement may deem it a completely new requirement altogether). A completely unblemished work statement is unlikely for any requirement, but failing to incorporate key elements or the presentation of certain undesirable characteristics within a work statement can lead to its downfall. What are some of the ways work statements go wrong? Some aspects as to why a work statement can fail to meet expectations are as follows:
- No Clear Purpose – The first step in creating a work statement is understanding the requirement and the impetus needed to establish a contract for a requirement. It should be specific, concise, clear, and outcome oriented. Without a defined purpose and impetus, work statements cannot define aspects, such as the WBS and cost elements cannot tie back to work statement elements.
- Lack of Logical Structure – In order for contractors to propose solutions, work statements must clearly follow a logical structure of tasks and sub-tasks. Work statements lacking a logical structure present difficulty for contractors to accurately estimate the amount of work to be done, the price, and the best delivery method. Work statements lacking a logical structure can result in misaligned personnel and resources, such as IT tools.
- Overly Specific – Over specification occurs when work statements describe tasks and sub-tasks beyond what is needed by potential contractors to understand the work statement and competitively bid. This can occur when a work statement steers a requirement to a specific contractor, agencies or organizations lack confidence in the market, or use jargon and methods that are unique to an agency or organization. As a result, delivery costs increase and flexibility decreases in an industry that requires agility. Furthermore, overly specific requirements can restrict competition leading to a pre-award protest, since contractors with past performances at a specific agency or organization will be most familiar with their needs.
- Ambiguity –When the work statement does not provide enough details to adequately and accurately propose and/or develop pricing, contractors make assumptions or interpret what is needed, often to the detriment of the awarding agency or organization. Post-award, ambiguities can present legal challenges to an agency and organization whereby ambiguities within a work statement work against the agency and organization.
- Contradictions – This is a common occurrence among IPTs where multiple technical experts draft elements of a work statement. If reviews are not conducted, these contradictions will create confusion, require corrections, and hurt competition by driving off contractors who are unwilling to go after the work.
- Personnel Misalignment – This occurs when position descriptions, such as for Key Personnel, do not align with the work activities required. In some instances, agencies and organizations use historical documents to create position descriptions that are no longer relevant.
- Unrealistic Delivery Schedule – If the delivery schedule is created to meet internal deadlines that are not based on validated or historical work or industry estimates. Agencies and organizations may also require an overwhelming number of deliverables that are beyond the required minimum for successful performance and monitoring of contract services. Rather than focusing on the execution of critical tasks, contractors focus their attention on delivering work products that may provide no additional value.
- Flawed Level-of-Effort – When the stakeholders focus a requirement’s level-of-effort (e.g., man-hours) to a specific budget, work statements are bound to financial figures rather than actual needs. In this instance, the developers of a work statement may lack the knowledge needed to create an effective work statement, and did not consult with technical experts and SMEs. Aligning requirements within a work statement to a specific budget can result in misaligned resources and impact contractors’ ability to propose accurately. If a work statement describes a level-of-effort that is too low for the nature of work, it will drive capable contractors away and hurt competition.
- Internal vs. External Priorities – When the requirement is for a product or service that has end users or customers, the IPT focuses on internal needs versus the ultimate recipients of goods and services. Although internal needs may be effectively captured, an IPT may lack sufficient information for internal needs (e.g., performance metrics). In this case, the IPT does not sufficiently address the needs of the ultimate consumers of a product or service.
- Unsupported Technical Requirements – This occurs when the work statement identifies technical requirements but does not include the supporting technical references needed to fully understand, design a solution, or make a product. Including technical references are critical to the contractor’s ability to propose a product or solution.
What are the required elements of effective work statements?
Although contracting professionals may be most familiar with the three types of work statements, many will find that the structure, elements, and level-of-detail within a work statement can vary depending on agency and organization. For example, rather than explicitly defining each of the required elements of a PWS, the Federal Acquisition Regulation (FAR) recommends the following:
Describe the work in terms of the required results rather than how the work is to be accomplished, or the number of hours to be provided; Enable assessment of work performance against measurable performance standards; Rely on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.
Work statements, without regard for agency or organization-specific requirements, can vary widely in detail so long as they describe the work that is necessary. Although this may grant some flexibilities to the authors of work statements, a lack of well-established or explicit guidelines may serve as a detriment to contracting professionals when certain elements are omitted or forgotten. In general, contracting professionals should seek to incorporate the following elements in their work statements to ensure a sufficiently described requirement that enables contractors to propose accurately:
- Introduction and Background – Within this section, contracting professionals should describe the reasons behind a contract action. This section should not only provide historical information, but also a general description pertinent to the organization and requirement. It should define reasons why this effort is required. In instances where a requirement supplements or complements an existing contract action, contracting professionals should include this information within this section.
- Scope – Scope identifies what work needs to be completed in the project to accomplish a requirement’s objectives. Within this section of a work statement lies a detailed summary of each of the work statement’s performance elements.
- Performance Elements – Sometimes described as “task areas,” performance elements often serve as the “heart” of a work statement. Here, specific results, actions, and outcomes the contractor must perform to achieving results are defined. Some may specify the steps the contractor must complete to ensure successful delivery.
- Deliverables – These are the items that must be completed during or at the end of a contract’s period of performance. Deliverables are often organized into a “schedule” that describes each deliverable and due date. The deliverables schedule generally describes, in detail, quantity, format, and other relevant aspects of a deliverable. Ideally, deliverables should be relevant to the task and deliver value to agencies and organizations.
- Performance Standards – Performance standards measure the effectiveness of a contract Agencies and organizations should recognize their measures of success and incorporate those measures as performance standards within their work statements. Performance standards should align to performance elements and be expressed in clear, and measurable manner.
How can you write a more effective work statement?
Whether, it is the role of a Contracting Officer, Contract Specialist, or Acquisition Program Manager, contracting professionals find themselves in the position of leading IPTs in the development of work statements. This is an important foundation of any contract performance. As technical experts within their own unique functional area, IPT stakeholders may not understand the importance a well-defined work statement has on the execution of their functional requirements. Although achieving a completely faultless work statement is unlikely, there are steps to deliver a better product. What are some of the paths we can take to develop more effective work statements?
Are you unclear about your requirements or are they evolving? Consider the SOO.
An established performance history may compel organizations to continue pursuing a defined work statement in their solicitations, whether it is an SOW or PWS. SOWs clearly define the work and methodologies to be performed, and PWSs identify the outcomes but performance methodologies can vary as long as they achieve the desired outcomes within established performance standards. As technologies evolve, methodologies change, and existing processes are eschewed in favor of newer ones, agility is required of the contractor. Tried and true approaches may lead to significant gaps in capabilities. If a market environment changes substantially, a work statement might insufficiently capture the capability. As a result, work statements may lead to poor contract performance due to insufficient capture of the current market environments. So how can organizations mitigate this issue? A SOO solicits the unique and specialized knowledge of experts in the commercial industry to address performance gaps and produce a PWS. Organizations may feel reluctant to pursue and solicit the SOO method due to the perceived lack of control—rather than defining every aspect of a work statement, an agency or organization will solicit industry for high-level objectives. Depending on their understanding of a requirement, this may also include the type and structure of performance standards, deliverables, WBS, and other aspects. Rather than defining the requirements for industry, industry can use SOOs to aid agencies and organizations in improving upon or refining outdated capabilities or adapting innovative approaches.
Target existing ambiguities and clearly define them.
Despite the best efforts of contracting professionals and IPTs, it is unlikely to achieve a perfect work statement. Unavoidably, capabilities change and technologies emerge during a contract’s performance. In order to minimize gaps, broadly defined language and ambiguous terms and phrases are tempting for contracting professionals and IPT. These language ambiguities find their way into work statements. Examples of such phrases may include:
- “Including but not limited to…”
- “As required…”
- “Other duties as assigned…”
Those less familiar with the contracting process may feel that “all-encompassing” phrases, such as those above, sufficiently capture any new and emerging requirements during a contract’s performance; however, we must remain cognizant of the concept of contra proferentem (“against the offeror”), which construes an ambiguous term against the party that imposed the inclusion of the term in the contract during negotiation or drafting. When drafting our work statements, attention to clarity and detail is key. Questions such as, should this deliverable be in calendar vs. business days? and how are we defining “acceptability” (i.e., what elements, at a minimum, must the report include?) must be asked.
Incorporate technical exhibits into your work statement.
In some instances, describing a requirement through text may not sufficiently communicate the needs of an agency or organization. In these instances, contracting professionals should incorporate technical exhibits within the work statement document itself, or as separate attachments to the work statement. These technical exhibits should be relevant for the required product or service, and better enable contractors to submit their proposals. Examples of technical exhibits can include historical workload information, processes that must be followed to complete performance elements, environmental documents, or samples of deliverable formats which contractors must follow.
Document gaps throughout the lifecycle.
Despite the best efforts of IPTs, technical experts, contracting professionals, and other stakeholders, work statements will have gaps in capabilities that are not initially captured. Rather than seeing these gaps as failures or shortcomings, they must be viewed as opportunities for improvement and success. Throughout a contract’s lifecycle, contracting professionals should document and identify these gaps as soon as possible to consider in-scope modifications to existing contracts, or incorporate them into follow-on contracts. Not only can this mitigate shortcomings within existing contracts, but it can improve the performance of future requirements.
Manage expectations with technical stakeholders.
Contracting professionals must possess diplomatic skills to address and alleviate the concerns of stakeholders that feel unsatisfied with their work statement. Rapidly evolving fields, such as IT products and services, may see substantial changes in the work statement over its life. Stakeholders may feel tempted to prematurely abandon a contract and its existing work statement. Contracting professionals should alleviate those concerns by managing expectations and recommending alternative solutions, such as in-scope determinations to incorporate emerging requirements where possible.
Solid Foundations Enable Successful Performance
Work statements play a vital role and serve as a key foundation in any contract’s performance, yet are fragile documents where elements can easily be omitted, preventing effective contract performance. While achieving an unblemished work statement is difficult, contracting professionals can take steps to minimize risks and ensure work statements sufficiently capture the requirements of stakeholders. By considering the factors that contribute to poorly written work statements and employing methodologies to ensure developing more effective ones, work statements can better serve agencies and organizations during contract performance.
 GAO Report, “COST ESTIMATING AND ASSESSMENT GUIDE: Best Practices for Developing and Managing Program Costs,” GAO-20-195G (March 2020).
 FAR 37.602.
 Legal Information Institute (LII), Wex, Contra Proferentem, https://www.law.cornell.edu/wex/contra_proferentem (last visited Mar. 25, 2021).