Chapter 21 - Performance-Based Contracting and Service Level Agreements

21.5.1 General guidelines for SOW preparation

The PBC SOW must be written as a concise, declarative, verb-driven document as it is a statement of the customer's required goods/services in terms of outcomes and includes a measurable performance standard(s) and an acceptable quality level for each outcome. In non-performance-based SOWs the supplier is usually required to perform the work in a specific way, using detailed specifications for production items, specifying key personnel to be provided and methods to be used for service contracts. Best practices PBC SOWs, however, describe the work in terms of the results to be achieved and look to the supplier to determine how the results will be achieved and how best to organize the supplier workforce to achieve those results. A well-written PBC SOW should:

• Be a stand-alone document.
• Define requirements in clear, concise language identifying specific work to be accomplished.
• Be individually tailored to consider the period of performance, deliverable items, if any, and the desired degree of performance flexibility.
• Not repeat material that is already included in other parts of the solicitation or contract.
• Express desired performance outputs in clear, concise, commonly used, easily understood, measurable terms.
• Not include broad or vague statements, overly technical language or detailed procedures that dictate how work is to be accomplished.
• Be structured around the project’s objective(s) or purpose of the work to be performed, i.e., what is to be performed rather than how to perform it. For example: instead of requiring that the lawn be mowed weekly or that trees be pruned each Fall, state that the lawn must be maintained at a height of 2-3" or that tree limbs not be allowed to touch utility wires or buildings.

A SOW will minimally include the following components:

• Introduction: a general description of the procurement.
• Background: information that helps suppliers understanding the nature and history of the requirements.
• Scope: overview of the SOW that relates the important aspects of the requirements.
• Applicable directives (if any): referenced documents, specifications or directives that are either mandatory or informational for the procurement.
• Performance requirements: what is required to be done, the performance standards, and the acceptable quality levels. Performance requirements should enable assessment of work performance against measurable performance standards; they 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.
• Information requirements: reports, software, deliverables, and formal requirements that must be submitted as part of the engagement.
• Quality assurance and acceptance criteria: Acceptance is the agency’s formal, written process to acknowledge that the goods/services conform to the applicable SOWs quality, quantity and other requirements. Acceptance may or may not involve quality assurance processes and typically precedes payment. The procedure for formal acceptance should be provided for any milestone deliveries, as well as final acceptance.

The PBC SOW should describe in detail what the supplier is to accomplish through addressing the four elements - what, who, when, where and how. The how element should allow flexibility and allow the supplier to propose its approach for how the results or outcomes will be achieved by their firm. These four elements should include:

• What is to be done and what are the deliverables/milestones.
• Who is going to do what (agency, supplier, third party CoVA agent, etc.).
• When is it going to be done by deliverable and/or milestone?
• Where will it be done?
• How will it be done and how will the agency know when it is done (i.e., testing and acceptance)?