What Every Engineer and Project Manager should know about the Scope of Work (SOW) on Engineering Projects

The following is an excerpt from John Lowe’s book entitled A Guide to Managing Engineering and Architectural Design Services Contracts.  The post was published with permission from the author and the audiobook will be available through Engineering Management Institute website in November 2016. Click here for a notification when the audiobook is released.

The Scope of Work (SOW) on a project is an important aspect of a project that can lead to many budget and schedule challenges.  In this excerpt, which is two separate excerpts of Mr. Lowe’s book, he defines the Scope of Work in relation to engineering projects and discusses how liability can be minimized by sharing the SOW and identifying changes to it early on.

 The Scope of Work on Engineering Projects

Scope of Work is the document that describes what the Consultant will prepare and deliver to the Client as its instruments of service, or documents.  To the maximum extent practical, the Scope of Work (SOW) should be very detailed.  The more clearly the SOW is presented, the higher the probability that the Client’s expectations will be met.  The following are suggestions regarding SOW preparation:

1. Provide a list of the titles of the likely sheets that are to be prepared.
2. Provide a list of the titles of the specification sections that are likely to be needed.
3. Provide a section entitled “Not Included” documenting those scope items for which agreement is reached during negotiations with the Client are not to be included. This is a critical element because neither the Client’s nor the Consultant’s Project Manager that negotiated the contract may ultimately be the individuals that direct the design process.
4. Consider a section entitled “Assumptions” that address things such as design standards that will be used, the timing of delivery of Client provided information, and other design-critical items.
5. Consider a section entitled “Contingency Items”. This section would include items for which there is agreement that they may be needed but the need for which cannot be established before the design is undertaken.  The advantage of having this section is that the SOW and budget may be agreed to beforehand so as to not delay the process when the need is determined.
6. Define, by Design Phase, what is to be provided as Basic Services and what is to be provided as Additional Services. Basic Services generally include those tasks that can be clearly defined while negotiating the SOW.  Additional Services are those tasks that may not be easily defined or whose required level of effort cannot be determined prior to execution of the design.
7. Consider including Construction Phase Services in the original SOW to avoid possible delays between the design and construction phases.

How to Minimize Professional Liability Risk through the project Scope of Work

There are many activities that the Consultant can use during the design that will both improve efficiency and may also help to minimize the probability of having a professional liability claim.  The following are suggestions that have been found to be effective in this regard:

Sharing the Scope of Work (SOW) is the first step in managing expectations.  The SOW is where the expectations are established.  Every person on the design team should receive a copy of the SOW for the project or at least have access to it.  While the Project Manager and some members of the team that were involved in developing and negotiating the SOW know what is included, others may be only partially informed.  They may be functioning largely on the basis of what they have heard or prior experience on similar projects.

Unless designers know what is included in the SOW and, more importantly, what is not, some will go beyond that which is in the SOW.  Sadly, the Project Manager may only discover this when he/she observes that the project schedule or budget is in trouble.  This situation is then compounded by the Project Manager having to decide whether or not to approach the Client with an awkward “after-the-fact” request for change in scope and/or additional compensation.

Verification that the design is being executed within the SOW is critical, especially early in the design process.  A technique that can be helpful in this regard is to have an in-house 10% progress review during which the Project Manager can determine whether or not the design team is working within the SOW.  This review can also avoid an unhappy schedule or quality surprise when it is time for the first formal submittal to the Client.

Scope Change Identification and Documentation must occur as soon as practicable.  Changes in the SOW are common during the design process.  Some are minor changes and some can have significant impacts on schedule and budget.  Timely notification to the Client that the SOW needs to be revised is essential for maintaining good relationships with the Client and for the Consultant to properly manage the schedule and budget.

A Change in Scope form is available at the author’s website, loweconsultingllc.com.  It is simple, straightforward, and can be issued quickly by the Consultant to the Client providing the desired documentation as to why the Consultant believes that the scope needs to be changed.  The form can also be used to notify the Client of the Consultant’s estimate of potential changes in the schedule and budget.  Use of the form can also establish with the Client that SOW changes are important, whether or not they require a change in schedule and/or budget.  The form may also be used to document scope changes that occur early in the project that require minimal effort to implement so the Consultant may choose to make the change without schedule change or additional cost.  In any event, the Client must be informed and agreement sought.

All too often Consultants accept verbal direction from the client that is not within the SOW, proceed with the change if is minor, believing that it can be absorbed within the budget.  This sets an undesirable precedent with the Client who can come to expect that “scope creep” is an acceptable process.  By using the form, future requests for change in SOW can be expected to be documented and, when appropriate, result in revisions to the schedule or budget.

But remember, the Change in Scope form is not a contract amendment, which is always required when the scope, schedule or budget changes.

About John Lowe:

John M. Lowe, PE is a 1961 Civil Engineering graduate from the University of Florida.  Following three years of military service as an Army pilot, he enjoyed forty-six years as a consulting engineer involved in both private and public projects as project manager, principal-in-charge, or office manager.  He has been registered and practiced in FL, GA, SC, CA, and OR.  His last employment assignment was as a Design Coordinator with Oregon Bridge Delivery Partners. In 2010, he retired from full time employment and formed Lowe Consulting, LLC and began giving back to the profession by sharing what he had learned about contracting for professional services and managing professional liability issues (PLI).  This process began by appearing as a guest speaker on these subjects to senior engineering students at Portland State University, University of Portland, and Oregon State University.  He has also addressed these subjects at professional society meetings, public agency training sessions, and webinars.  To facilitate getting this information to a wider audience, he wrote and self-published a book entitled “A Guide to Managing Engineering and Architectural Design Services Contracts – What Every Project Manager Needs to Know.” You can contact John via his website.

Please leave your comments or questions in the section below on scope of work related issues.

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