Statement of Workfor

Personal Services Contracts

Oregon Department of TransportationProcurement Office

April 17, 2012

Slide 1

Introductions

• Your name

• Where you work

• What types of projects you manage

Slide 2

Training Outline

• General info about Statement of Work

• Overview of development and review process

• Contract writing style

• Guidelines for developing a Statement of Work

• Resources

Slide 3

General Information about Statement of Work

Slide 4

Trade Services

Personal Services

ODOT procures a variety of things

Goods

Personal Services

A&E Related Services

Non-A&E

Types of Personal Services

Slide 6

A&E

Scope of Work Statement of Work (SOW)

Slide 7

What’s the difference?

Scope of Work

• An idea or concept

• A range of services and deliverables

• Defines the parameters of what could be included

Statement of Work

• A document

• Heart of the contract; explains “the deal”

• Specifies details about the commitments:– To provide Services– To prepare Deliverables– To solve a problem

Slide 8

Why is this important to know?

Slide 9

RFPScope of Work

Project Specific Contract

Amd

Slide 10

RFP Scope of Work

PA Scope of Work

WOCScope of Work

WOC

Amd

Amd

Slide 11

Amending a Contract(when under DAS authority)

To amend a contract: • Must be within Scope of Work• Either stated as an “Anticipated Amendment”

or within limits for “Unanticipated Amendment”

Contract with SOW

Amd 1 with SOW

Amd 2 with SOW

Unanticipated Amendments

• Cumulative amount of unanticipated amendments cannot exceed 20% of original contract amount.

• If exceeds 20% of original contract amount, must meet criteria in OAR 125-246-0560 and be approved in writing by ODOT’s Designated Procurement Office or DAS’ Chief Procurement Officer.

Amendments

Contract• Anticipated Amendments

– Development

– Implementation

– Training

– Increase Term

– Increase NTE Amount

• Unanticipated Amendments

“Anticipated Amendments” identified in the Contract

Amendments

Contract• Anticipated Amendments

– Development

– Implementation

– Training

– Increase Term

– Increase NTE Amount

• Unanticipated Amendments

Amendment #1• Add SOW for Development• Increase Term • Increase NTE Amount

Amendment #2• Add a subconsultant

to Contract

Where to include a SOW

Project Specific Contract

Request for Proposal

ODOT

RFP

CONTRACT

Slide 17

Menu of Services

Statement of WorkRequest for Proposal

Price AgreementWork Order Contracts

Work Order Contract

Slide 18

Statement of Work can also be used in…

• Intergovernmental Agreements

• Direct Appointment Contracts

• Sole Source Contracts

• Amendments

Slide 19

Believe it or not…

Even though you’ve used the same consultant on similar projects in the past and “they know what they are doing”, it is still important to have a well written Statement of Work that clearly explains the deal.

Slide 20

Write for all Potential Audiences• Consultants

• Oregon Dept of Transportation

• Dept of Administrative Services

• Department of Justice

• Secretary of State

• Politicians

• Court

• Public Slide 21

Legal Sufficiency

• Requirements per OAR 137-045-0015

• Applies to RFP, Contracts, and Amendments

• Do not fragment services into separate contracts to avoid requirements

• Must be legally sufficient regardless of contract amount

Slide 22

DOJ Video

Legal Sufficiency Review

Slide 23

Well-written Statement of Work

• Meets legal sufficiency requirements

• Clearly assigns obligations and responsibilities

• Clearly describes requirements and expectations

• Defines deliverables and delivery schedule

Slide 24

Well-written Statement of Work

• Identifies acceptance criteria

• Minimizes risk of interpretation errors

• Ties deliverables to consultant payments

• Enough detail to adequately administer it to a success outcome

• Withstands changes in staffingSlide 25

Statement of Work Development Process

OPOOPO DOJDOJ

SOWSOW

Slide 26

Cast of Characters

• Contract Administrator (often Project Manager)

• Price Agreement Administrator

• Subject-matter experts

• Project stakeholders

• ODOT Procurement Office

• Dept of Administrative Services (DAS/SPO)

• Department of Justice attorneys

• Federal Highway Administration or Federal Transit Administration

• Consultant Slide 27

Consultant’s Contributions• Prior to Consultant Selection

– Request for Proposal, however Consultant ineligible to compete for contract

• After Consultant Selection

– Project Specific Contract

– Work Order Contract

– Direct Appointment Contract

– Sole Source Contract

– Amendments Slide 28

Contract Administrator

DOJ

PA Administrator

Stakeholders

Subject-Matter Experts

Developing the RFP or Contract

ODOT Procurement Office

Consultant

When over $150,000

Slide 29

Contract Administrator

DOJ

PA Administrator

Stakeholders

Subject-Matter Experts

RFP and Contracts for IT

ODOT Procurement Office

Consultant

When over $150,000

Slide 30

IT Procurement & Asset Management

Contract Writing Style

Slide 31

“One should aim not at being possible to understand, but at being impossible to misunderstand.”

~ Marcus Fabius Quintilian

Write Clearly and Concisely

• Clear language

• Clear authority

• Well Organized

• Plain Language

Slide 33

Clear Language

• Avoid ambiguous language

• Consistent use of defined terms

• Define abbreviations and acronyms

Slide 34

Avoid Ambiguous Language

• Ambiguous language are words or phrases with more than one interpretation.

• Words or phrases such as:

we

they

our

assist

help

work with

acceptable

reasonable

best efforts

Industry standardsSlide 35

Avoid Ambiguous Language

Ambiguous:We shall attend the Technical Advisory Committee meeting to present the draft survey findings.

Slide 36

Avoid Ambiguous Language

Ambiguous:We shall attend the Technical Advisory Committee meeting to present the draft survey findings.

Instead of using “they”, “we” or “our”… assign responsibilities to either Consultant or Agency.

Revised:Consultant shall attend the Technical Advisory Committee meeting to present the draft survey findings.

Slide 37

Avoid Ambiguous Language

Ambiguous:Consultant shall assist ODOT with stakeholder interviews.

Slide 38

Avoid Ambiguous Language

Ambiguous:Consultant shall assist ODOT with stakeholder interviews.

Instead of using “assist” or “help”… define the activities that consultant shall do to “assist” or “help” ODOT.

Revised:Consultant shall develop a questionnaire. Consultant shall conduct and fully document 15 face-to-face interviews with Project Stakeholders identified by Agency.

Slide 39

Avoid Ambiguous LanguageAmbiguous:

Consultant shall work with ODOT staff to present results of Noise Study to the Noise Review Board.

Slide 40

Avoid Ambiguous LanguageAmbiguous:

Consultant shall work with ODOT staff to present results of Noise Study to the Noise Review Board.

Instead of using “work with”… specify activities consultant shall do to “work with” ODOT.

Revised:Consultant shall prepare presentation material that summarizes Noise Study results. Consultant shall print copies of presentation material for public distribution. Slide 41

Avoid Ambiguous LanguageAmbiguous:

Consultant shall revise the Draft Memo into an acceptable Final Memo.

Slide 42

Avoid Ambiguous LanguageAmbiguous:

Consultant shall revise the Draft Memo into an acceptable Final Memo.

Instead of using “acceptable”… specify requirements or standards that must be met to be “acceptable”.

Revised:Consultant shall revise the Draft Memo to prepare a Final Memo that incorporates Agency’s edits and comments.

Slide 43

Avoid Ambiguous LanguageAmbiguous:

Consultant shall use their best efforts to obtain 50% survey response rate.

Slide 44

Avoid Ambiguous LanguageAmbiguous:

Consultant shall use their best efforts to obtain 50% survey response rate.

Instead of using “reasonable” or “best efforts”…describe the level of detail or amount of effort required to comply with “reasonable” or “best efforts”.

Revised:Consultant shall send initial survey to target businesses. If less than 50% response received in two weeks, Consultant shall send the same survey to the businesses who did not respond to the initial survey.

Slide 45

Avoid Ambiguous LanguageAmbiguous:

Final Plans must comply with industry standards for culvert design.

Slide 46

Avoid Ambiguous LanguageAmbiguous:

Final Plans must comply with industry standards for culvert design.

Instead of using “industry standards”… determine if there are written standards and incorporate them by reference.

Revised:Final Plans must comply with FHWA Highway Design Standards (HDS) 5: Hydraulic Design of Highway Culverts.

Slide 47

Consistent Terminology

• Use the same term consistently throughout the document

• Use the same terms as defined in the Contract or Agreement

– “Consultant” or “Contractor”

– “Agency” or “ODOT”

– “City”, “County” or other defined term

– “Project”Slide 48

Consistent Terminology

• Using multiple terms for the same thing is a common error which can lead to problems:

Implementation Project Status ReportProject Status Report

Status Report

Interchange Area Management PlanArea Management Plan

the PlanSlide 49

Consistent Terminology

Abbreviations & Acronyms

• Shortening long phrases can make the Statement of Work easier to read and helps with consistency

– Commercial Off the Shelf Training (COTS Training)

– Interchange Area Management Plan (IAMP)

– Memorandum of Traffic Study Findings (Technical Memo #1) Slide 50

What does this acronym mean?

PR

Define all acronyms used in your Statement of Work

Slide 51

Consistent Terminology

Abbreviations & Acronyms

• Use abbreviations or acronyms for phrases that occurs multiple times.

• Don’t use abbreviation or acronym for phrase that only occurs once or twice; instead spell it out each time.

Slide 52

Abbreviations & Acronyms

First occurrence in the body of the SOW:

• Spell out the phase followed by the abbreviation or acronym within parenthesis.

– Consultant shall prepare a Field Management Plan (Memo #2) that describes in detail the procedure for…

– Agency may initiate Oregon Highway Plan (OHP) policy amendments to ensure…

Slide 53

Defining Acronyms

Subsequent occurrences in the SOW:

• Use just the abbreviation or acronym

– Memo #2 must include three performance measures for each …

– Review and provide comments on draft OHP policy amendment #…

Slide 54

Abbreviations & Acronyms

• Can also define abbreviations and acronyms in a list or table for easy reference

List of Acronyms

ACT – Area Commission on Transportation

FHWA – Federal Highway Administration

DAS – Department of Administrative Services

OHP – Oregon Highway Plan

PR – Preliminary Report

TAC – Technical Advisory CommitteeSlide 55

Write Clearly and Concisely

Clear language

• Clear authority

• Well Organized

• Plain Language

Slide 56

Clear Authority

• Write in active voice

• Assign responsibility

• It’s ODOT’s contract

Slide 57

Active Voice Sentence Structure

Subject → Action → Object

Consultant shall revise Tech Memo #1.

Slide 58

Active Voice Sentence Structure

Subject → Action → Object

Consultant shall revise Tech Memo #1.

Actor → Action → Receiver (Result)

Slide 77

Passive VoiceSentence Structure

Tech Memo #1 will be revised.Object → Action

Who will revise Tech Memo #1?

Slide 78

When you properly assign responsibility,

that automatically sets up the sentence to be in active voice.

Another Example

Passive voice:

A GAP Analysis Report will be prepared. Object → Action

Active voice:

Consultant shall prepare a GAP Analysis Report.

Subject → Action → Object

Assign Responsibility

• Clearly assign responsibility for each activity:

Consultant shall… (Required)

Consultant may… (Optional)

Agency will…. (Required, but with wiggle room)

Tech Memo #1 must… (Required)

Slide 79

Responsibilities and Level of Effort

• Define task responsibilities for both parties; ODOT and Consultant

• When using Fixed Price compensation, define level of effort that is agreed-to between ODOT and Consultant for the task, activity or deliverable.

It’s ODOT’s Contract!

• ODOT has the burden of responsibility to clearly ask for what we expect.

• If the contract doesn’t clearly represent what ODOT expects:

– Deliverables may not meet ODOT’s needs.

– May have to amend the contract and pay more to have Consultant redo deliverables.

– Hard to justify additional costs for existing work. Slide 80

If it goes to Court?

• If it’s not in the contract, it can’t be enforced.

• Courts tend to favor the Consultant if there is an ambiguous Statement of Work and the Consultant’s interpretation is reasonable.

Slide 81

Write Clearly and Concisely

Clear language

Clear authority

• Well Organized

• Plain Language

Slide 82

Organization

• Shorten overlong sentences

• Use numbered or bulleted lists

• Arrange in logical order

• Use headings

• Proper grammar and punctuation

Slide 83

Shorten Overlong Sentences• Break into several short sentences, or

convert to a numbered outline or bulleted list, such as:

Consultant shall:

1.1 Attend Project Team Meeting.

1.2 Present options with outline of advantages and disadvantages of each option.

1.3 Present Consultant’s recommendation for the best option.

Slide 84

Organize the Statement of Work

• Use headings to organize SOW into sections

A. Project Description and Overview of Services

B. Acronyms and Definitions

C. Standards and General Requirements

D. Review, Comment and Schedule Overview

E. Format Requirements

F. Tasks, Deliverables and ScheduleSlide 85

Organize the Statement of Work

• Number and name each task and subtask

• Organize tasks and activities within tasks in logical order; – Grouped– Sequential – Chronological

• Either include deliverables and due dates with appropriate task or in separate table.

Slide 86

Number Task & SubtasksExample

Task 1 –Pedestrian and Bicycle Arterial Crossings

1.1 Consultant shall prepare a Professional Literature Review Report (Literature Report). Literature Report must include:

• Pedestrian Safety Plan• Recommendations regarding threshold distance

Deliverables:

Literature Report must be submitted to Agency in electronic format no later than May 5, 2010.

Slide 87

Grammar and Punctuation

• Use “spell check”; but don’t rely on it.

• Have someone else proofread.

• After multiple revisions, re-read the whole document.

• Check resources for grammar and punctuation guidelines.

Slide 88

Grammar and Punctuation

For assistance with correct grammar and punctuation, check online resources such as:

– The Blue Book of Grammar and Punctuationhttp://www.grammarbook.com/english_rules.asp

– Grammarly Handbookhttp://www.grammarly.com/handbook/

Slide 89

Clear Language

Clear Authority

Well Organized

Slide 90

Write Clearly and Concisely

Clear language

Clear authority

Well Organized

• Plain Language

Slide 91

Plain Language

• ORS 183.750 requires all state agencies to prepare public communications in language that is as clear and simple as possible.

– Required for written documents produced for purposes of communicating with public

• Chapter 142 Oregon Laws 2007

– HB 2702: an Act relating to written documents

Plain Language

• Preliminary Plan for Implementing Plain Language (HB 2702)

– “Written document” not well defined; Agencies should assume it covers all written materials, including those presented on agency Web pages.

– HB 2702 specifies additional standards for written documents

Plain Language Standards

• A document meets the “plain language” standard if it, whenever possible:

– Uses everyday words that convey meanings clearly and directly;

– Uses the present tense and the active voice;

– Uses short, simple sentences;

Plain Language Standards(continued)

– Defines only those words that cannot be properly explained or qualified in the text;

– Uses type of a readable size; and

– Uses layout and spacing that separates the paragraphs and sections of the document from each other.

Guidelines for Developing a Statement of Work

Slide 80

Basic Components of a Statement of Work

• Contact Information

• Scope of Work, Background and Purpose

• Definitions and Acronyms

• Tasks and Deliverables

• Schedule of deliverable due dates

• Standards for acceptance Slide 81

Tasks

• Tasks may include activities that occur:

– Ongoing basis (Project Management)

– Repetitively (Meetings)

– Concurrently

– Sequentially or Chronologically

– Contingency Tasks

Slide 82

Contingency Tasks

• Anticipated tasks that may not be needed

• Quicker than amending the contract

• Issue Notice to Proceed for task when needed

• Helps control costs

Slide 83

Deliverables

• Deliverables validate the work requirements have been met

– Interim drafts to evaluate progress

• Deliverables should be:

– Tangible

– Measurable

– Often some form of documentation

Slide 84

Determining Deliverables

1. What are the objectives of the task?

2. What deliverables would best indicate the objectives were met?

------------------- SAMPLES-----------------------

– Attend a meeting to share information

– Design a section of roadwaySlide 85

Schedule• Deliverable Due Dates

– Target dates vs. mandatory dates– Specific dates– Number of days to complete deliverables

• Where to put Deliverable Due Dates– Due dates with tasks– Table of deliverables and due dates– Tracked on Gantt chart

Schedule (continued)

• Milestone Dates– Final Study and Recommendations– Design– Development– Implementation

• Completion Date vs. Expiration Date

Strategies for SOW Development

• Work with project stakeholders and subject-matter experts

• Brainstorm or mind map the project needs and requirements

• Develop contract administration strategy, including change management procedure

• Think high level, then work down to details

Slide 88

– What is the overall objective of the project? • Scope of Work

– What specific services are required? • Required Tasks, Anticipated Amendments,

Contingency Tasks

– What specific outcomes are needed? • Deliverables

– What standards of acceptance must be met? • Performance and acceptability standards

High Level; work down to Details

Slide 89

– Which party is responsible for task or activity?• ODOT or Consultant (or other stakeholder)

– What levels of expertise required? • Project Team / Key Person requirements

– What is the required completion date? • Schedule: Deliverable and Milestone due dates

High Level; work down to Details(continued)

Slide 90

Define “Done”

• Define clear outcomes for the contract

• How will you know when the contract is complete?

• What will you have when the contract is done?

Slide 91

Statement of Work Options

• Decide what best meets project needs

– Performance-based; focuses on outcome• Deliverables-based• Recurring Services• Service Level Agreement (SLA)

– Phased approach

– SOW with multiple stakeholders (i.e. TGM Model)

– Other customized approachesSlide 92

First Draft of Statement of Work

• Use template

– Generic Outline

– Geo-environmental Standardized Scopes of Work

• Borrow (not copy) language from other contracts

Slide 93

Using Statement of Work Templates

Slide 94

Where to Find SOW Templates

• ODOT Procurement Office– Intranet “Forms and Documents”

– Internet “Personal and Professional Services”

• Sample Statement of Work in Price Agreement

• Highway Division, Technical Services Branch – Intranet: Geo-environmental “Standardized

Scopes of Work” Slide 95

Standard SOW Outline Template

• Yellow highlights– guidance or instructions on how to complete

template

• Blue highlights – optional language, revise as needed

Slide 96

Throughout SOW Development

• As you progress through development of the Statement of Work

– Revise template or “borrowed” language to fit your project

– Revise to fit your contract

– Assess risk

Slide 97

Risk

“The danger or probability of loss.”

• Loss to ODOT or the public of…

– money

– time

– safety

– credibility or integrity

Risk Assessment

• When developing and reviewing the SOW, consider:

– What could go wrong?

– Likelihood it will go wrong?

– How much harm?

– How to avoid or mitigate?

– How much will ODOT accept?

Assessing Risk

• How is risk different when ODOT develops SOW compared to when consultant develops SOW?

• Is risk to ODOT always higher when consultant develops the SOW?

• What must you do?

– Complete thorough risk assessment.

– Negotiate and revise SOW as needed. Slide 100

Mitigating Risk

• Contract language

– Terms and Conditions

– Insurance and bond requirements

– Well written Statement of Work

• Contract management

– Selection of well qualified consultant

– Effective administration of the contractSlide 101

Mitigating Risk in the SOW

• Statement of Work

– Clear and concise language

– Assignment of responsibilities

– Deliverable schedules

– Require “drafts” as deliverables

– Reference acceptance standards

Slide 102

Legal or Business?

• Legal requirement or Business decision

– ODOT must comply with legal requirements.

– Compliance with grant requirements, if applicable.

– If not a legal, policy or grant requirement, it’s likely a business decision.

– Business decisions may be heavily influenced by standard business practices. Slide 103

Business Decision…

• Who has the authority to accept the risk?

• Options may include “Go” or “No Go” to accept or mitigate the risk, or to cancel the project

• Document the decision and justification for accepting risk

Slide 104

Higher Risk = Higher CostsFind a healthy balance

Protecting ODOT and the public

Insurance costs; Relationships; Politics; Laws;

Regulations; Project budget; Work done

Slide 105

ScenarioODOT management has allocated resources to start delivery of a new project.

The department does not have enough staff to complete all the required services for the project.

The department cannot hire more staff, so they decide to outsource some of the work to consultants.

Slide 106

Legal Requirements

Can ODOT use a Personal Services Contract to hire temporary staff?

NO!Personal Services Contracts can only be used to

contract with Independent Contractors

Slide 107

Legal Requirements

• OAR 731-146-0025 states the Statement of Work must not result in an employee relationship with contractor.

• ORS 240.309 governs how to obtain temporary employees.

Slide 108

ORS 240.990 Penalties

• Penalties for willfully violating requirements of ORS 240.309:

– Criminal misdemeanor offense

– Fine of up to $500 or imprisonment for up to one year, or both

– Any person convicted is ineligible for position in state service for period of 5 years

These are penalties to you!!Slide 109

Damages to ODOT

• If contractor is determined to be employee, ODOT is responsible for:

– Claims for employee benefits

– Income taxes, plus penalties for late withholdings

– Negligent activities contractor has does that harms others

– Violations of collective bargaining agreements

Slide 110

Independent Contractor

• Independent Contractor vs. Employee

• Factors to consider

– Nature and degree of control by ODOT

– Services as integral part of ODOT business

– Duration of contract

– Can contractor make profit or suffer loss

– Business practices to provide services for more customers than just ODOT

Slide 111

Risk Assessments

For info and assistance with conducting risk assessments and mitigating risk, contact your OPO Procurement Specialist.

OPO can access additional resources:

– ODOT Risk Management

– DAS Risk Management

– Department of Justice

Slide 112

ActivityJones Planning, Inc.

• Assess level of risk to ODOT

• Strategize how risk might be managed in the Statement of Work:

– Avoided

– Mitigated

– Transferred to the Consultant

Slide 113

Additional Resources

• OPO Intranet

– Procurement Manual Section MChapter 1 – Statement of Work Writing GuideChapter 2 – Guide for A&E Personal ServicesChapter 3 – Guide for Non-A&E Personal Services

– Forms

– Procurement-related training

– DOJ Video

– Staff contact information

Additional Resources

• OPO or Contract Administrator– SOW templates, when available– Samples of SOW for similar projects

Training Summary

Scope of Work vs. Statement of Work

When to use Statement of Work

Legal Sufficiency Requirements

Development and Review Process

Writing StyleClear Language

Clear Authority

Well Organized

Plain Language Slide 97

Training Summary (continued)

Tasks, Deliverables and Schedule

Strategies for Development Start High Level; Work Down to Details

Define “Done”

Using Templates

Assessing and Mitigating Risk

Independent Contractor Requirements

Slide 98

Any Questions???

Thank you for your participation!

A training evaluation survey will be emailed to you soon. We’d appreciate your feedback

Have a great afternoon!!

Slide 99