Writing a Scope Of Work for a Construction Project (2022 Update)

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    In this article, we cover the basics for how to write scope of work for a construction project, why its important and share tips on how to save time and money.

    Scope of work (SOW) sets projects up for success. The ultimate guidepost for each step of a construction project, a scope of work document establishes the work that needs to be covered in a clear, sharable format. Diving into a project without one sets up contractors for backtracking, miscommunication, and lost time.

    Better manage expectations and change on your next project by learning how to write a scope of work for construction!

    Why You Need a Scope of Work for Your Construction Project

    Scope of work is a powerful anti-dispute tool for contractors. A SOW document clarifies a project’s outline to save time and money. It’s a blueprint itemizing the work that needs to be done in order for the project blueprint to be completed. The “better process” created by a solid SOW document leads to a better end result for the client. When a project lacks a well-defined scope of work, there’s no way to establish the work that needs to be done. This allows for a vacuum of responsibility.

    What Is a Scope of Work Document?

    The simplicity and obviousness of a scope of work are actually the things that cause this document to be forgotten during the planning stage. A contractor may feel that the information provided on a scope of work is redundant. However, a scope of work is a unified document that puts all tasks in one place. It is the ultimate “accountability” document.

    A scope of work is a written document outlining all activities included in a construction project. In addition to itemizing objectives, anticipated milestones, deliverable items, and outcomes, the scope of work also itemizes the specific responsibilities for each project team and individual. The scope of work also outlines all terms, conditions, standards, and requirements attached to all activities and responsibilities. A scope of work is so valued by contractors that many actually include it as a section within a work contract. Others simply attach it as a separate document.

    Why Scope of Work Is Critical

    Contractors know the pain of verbal contracts. Disputes and delays become contentious when there’s no written basis for the timeline and protocols built into a project. Scope of work protects contractors against misunderstandings and client driven changes during a project that materially impact cost. There are the three ways that scope of work sets contractors up for success against common scenarios:

        • Preventing Mistakes and Redoes: When scope of work sets up specific expectations, the chances of redoing work go down. One of the biggest causes of mistakes is a lack of clarity regarding who is responsible for a specific task and the specific details of a task.

        • Ensuring Arrival of Materials and Equipment: Scope of work ensures that delivery days for materials and equipment are aligning with key dates within a project’s timeline. Responsibility for making those deliveries happen is clearly assigned.

        • Getting the Right People Booked: Scope of work acts as a call sheet that gets the right people booked for the right days. In a landscape where subcontractors are often booked months in advance, there’s no such thing as simply “rescheduling.”

      Scope of work helps to prevent mistakes and misunderstandings. It also serves as armor against misunderstandings and accusations by allowing contractors to “show their work” when clients insist that a specific demand or expectation isn’t being met.

      Some subcontractors won’t agree to begin work until a scope of work is submitted. Having been burned by verbal agreements and poorly defined job specs in the past, these subcontractors protect their labor, time, and resources by only agreeing to perform work as part of a signed scope of work. Being a contractor with the ability to deliver good SOW documents establishes good faith.

      What to Include in a Construction Scope of Work

      Five core points need to be hit in every scope of work. While contractors have flexibility regarding how they want to lay out a document, these five points should make up the skeleton of the document.

      1. Project Summary

      Get the project definition down on paper. This starts with clearly stating the goal. Again, this is something that many contractors skip because it seems too simple and obvious. For example, the goal when building an addition on a home may be to create a 500-square-foot space that leaves the property owner with a turnkey, debris-free property. While it’s simple, this goal gives the contractor something to point to at the project’s end. Contractors constantly bump up against the problem of dealing with clients who hold expectations they never verbalized. Seeing the project summary on paper provides the client with an opportunity to confirm that what they’re seeing in their mind is the same as what’s on paper.

      2. Deliverables

      This portion of the scope of work includes specific deliverables tied to a project. The wrong way to do this is to simply name a deliverable as “updating the kitchen.” This larger objective should then be split into smaller deliverables that are assigned to specific subcontractors. “Updating the kitchen” should be split into measurable items that can include ripping out the countertops, installing a sink, tiling the backsplash, installing energy-efficient under-cabinet lighting, and more.

      3. Specificity of Scope

      Under this category, the contractor gets specific about how they will achieve scope. It offers a look “under the hood” that breaks down the specific techniques and methods that will be used to achieve project goals. Something that is often overlooked is the way that technique ultimately determines pricing. Different permits, tools, materials, and special contractors may be needed based on the technique chosen to achieve a specific goal within a project. This is why merely naming tasks instead of pairing “task with technique” as part of scope of work is such a deadly mistake when it comes to profit margins.

      For example, a contractor may define the scope for installing under-cabinet lighting based on the specific wattage and wiring that will be used because they know that this project has a wide cost range based on the quality of the materials used. Expect to write, rewrite, and continually expand on this section as client expectations get refined. Adding as much detail to each line as possible helps to create airtight definitions of scope that don’t leave room for creative interpretation by everyone from the subcontractor performing the work to the client writing the check. Good details also ensure that your subcontractors are calling in the right people for the job based on the specific skills and certifications needed.

      4. Anticipated Schedule

      This is the section of scope of work that brings accountability home. A scope of work schedule has two purposes. The first is setting up expectations with the client for how long each step will take. The second is allowing subcontractors to plan their schedules to meet your deadlines. All scope of work schedules should include key dates for milestones that might cover demolition, framing, wiring, completion, and cleanup. Of course, scheduling also helps the contractor to properly book their own in-house team or regular labor pool for key dates.

      5. Execution

      Contractors must create plans for how scope of work documents will be executed. Uniform administrative practices help to turn a scope of work document into a living document. Decide how your scope of work handles these issues:

          • How clients should pay.

          • How change orders are handled.

          • The protocol for handling disputes.

        Don’t forget the crucial final part of every scope of work document. A project scope isn’t useful if it doesn’t get past the scope of a contractor’s desk! Make sure that a finalized scope of work document gets signed and approved by the contractor, client, and all subcontractors. The important thing to remember is that creating a scope of work isn’t some esoteric, high-concept task. It often requires walking through the physical space of the project to jot down everything that will need to be addressed. This video by Tom Stephenson does a good job of demonstrating what that process looks like.

        The obvious benefit of a scope of work is that it provides a clear written document of the assumptions and what’s included as part of the job that can be used to steer the project and assess change as it happens. Scope of work helps you get paid. In addition to covering steps and controlling change, scope of work also helps you to track your costs against your budget. Too many contractors fall under their desired profit margins because of inaccurate construction job costing.
        The simple formula for construction job costing adds labor, materials, and equipment together to come up with an all-in cost. However, accurately assessing these costs without having a detailed, itemized scope of work in place is impossible. For instance, the labor category alone could consist of tear down, prep, installation, and cleanup. Being understaffed just one time can have a ripple effect that leads to unanticipated overtime that eats into your budget. The client won’t pay for that scheduling mistake. It will come out of your profit margin.

        Scope of Work Example for a Residential Project

        Here’s a look at what a scope of work construction example for a residential project should cover:

        Contractor Name: Ace 1 Construction

        Project Address: 23 Lovely Lane, Miami, Florida

        1. Job Summary: Kitchen renovation for a single-family home

        A. Preparation and Demolition

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #3 + Point Person + Duration (in days)

        B. Framing, Drywall, Plumbing, Electrical, and HVAC

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #3 + Point Person + Duration (in days)

        C. Interior Finishes

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #3 + Point Person + Duration (in days)

        D. Install New Windows and Doors

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #3 + Point Person + Duration (in days)

        E. Inspection

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        F. Final Walk With Client

        Action #1 + Point Person + Duration (in days)

        Action #2 + Point Person + Duration (in days)

        Action #3 + Point Person + Duration (in days)

        Checklist for Creating a Construction Scope of Work

        How do you get a scope of work on paper? Ideally, a contractor is using a methodology that can be replicated for every new project. Here’s a suggested checklist  to go through when building your construction scope of work:

            • Define Terms With Simple, Universal Language: Use recognized industry terms and codes when defining tasks. A good SOW is readable for both insiders (your subcontractors) and outsiders (your client).

            • Use Chunking: Use as many subcategories as necessary when breaking down scope. Always start with broad tasks before breaking tasks down into smaller tasks. Never assume that smaller tasks are simply lumped in with larger tasks. Name them all.

            • Take Time to Set Deadlines: Never guesstimate duration on tasks. This can leave you with everything from worker shortages to out-of-control overtime. If you’re using construction management software that allows you to reference timesheets and billed hours for previous jobs, use that data to make informed timeline projections.

            • Use Pictures: Pictures, maps, models, plans, blueprints, and other visuals bring scope of work documents to life. Visuals are great for universally clarifying any vague terms that might be stumbling blocks. Visuals protect contractors from accusations of vagueness or ambiguity.

            • Always End With Approval: A scope of work is just a contractor’s draft until it’s signed by stakeholders. Your scope of work is only a verbal agreement until the document has been signed by the contractor, clients, and all participating subcontractors. Would you ever hinge your profit margin on a verbal contract?

          An effective, protective scope of work starts with your ability to grasp a client’s requirements and expectations. Take time for discussions with the client that will allow you to create a scope of work that reflects their expectations. If a client seems to lack an understanding of how expectations are built, show them a scope of work from a previous project to help realign the conversation.

          Dealing With Scope Changes During a Construction Project

          What happens if scope changes once you’ve already enacted your SOW document? First, contractors should come to expect change orders. A change order is used to either exchange or modify some aspect of the work, materials, or scope of a project. Using change order best practices, contractors can adjust their SOW documents to account for the tweaks being requested by clients with as little pain as possible.

          When a change order comes through, the priority is to calculate how the requested changes will impact labor. Contractors should reschedule labor dates based on how the change order shifts work scope, priorities, and deadlines. A readjusted version of the SOW document that includes any changes in either task or duration in highlighted text should then be distributed to all subcontractors.

          Tracking Your Performance

          How do you know whether you are effectively managing project scope and your budget? The benchmark for project scope is the budget. If your scope is allowing you to “burn through” your budget at the expected pace that leaves you on target to meet your profit margin, this is a sign that your scope of work was accurate. If you’re finding that you’re much further along in your budget than you are in the project, this is a sign that your scope was not accurately assessed. It may be time to realign scope for the remaining portion of the project to keep costs under control before the project turns into a loss. Keep in mind that a contractor profit margin of 15% is ideal.

          Tracking costs is one of the most difficult aspects of managing project scope, this is very difficult to do accurately without using modern software solutions.While contractors have their hands tied when it comes to market-determined costs for materials and labor, the one thing they can control is how they manage resources. Time & Job Tracking software like Workyard enables contractors to accurately track their labor costs at a job and cost level with no manual data entry required..

          Time tracking apps like Workyard also help contractors save on their payroll costs by more accurately tracking every hour and mile worked reducing errors and over-reported hours.

          Construction Scope Of Work FAQs

          Yes, materials should be included in scope of work. However, it’s important to note that materials are only included in relation to how they fit into the overall plan for the “who” and “how” of completing the work. Contractors can determine the amount of each material required by specifying the techniques used to complete specific tasks.

          With a fixed-price model, the client pays a lump sum in exchange for completion of services by a specific date. Clients like the “no surprises” aspect of this pricing model. When creating a fixed price, a contractor factors in anticipated time and materials based on past jobs before adding profit margin. When choosing this route, it’s essential for a contractor to have a detailed scope of works and estimate given they are taking budget risk.. A T&M (time and material) model charges the client custom rates based on the time and materials needed to complete the project. Under this system, a client is typically charged per step within a larger job.

          The T&M model is preferred by contractors when they cannot accurately estimate either how much a project will cost or how long a project will take. By contrast, the lump-sum model can be acceptable for clearly defined, easily repeatable tasks. Fixed pricing is generally used more by subcontractors offering “set” services compared to contractors offering custom services. For example, a plumber may feel comfortable charging a fixed rate for system inspections because they have gotten the time and materials involved in the service down to a science. This makes it unlikely that they will lose money by offering a fixed rate. By contrast, a general contractor building an addition simply has too many variables to work with to be able to guarantee flat pricing.

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