How do you map out a complex scope of work?

A coaching client with 4 years of contract negotiation experience was handed his first complex Statement of Work (SOW). In this situation, the complex scope of work included the purchase of physical items and specialty software code to allow two systems to “talk” to one another.  Often templates cover one type of purchase, so combining the two different types of purchase will require some additional work on the SOW to get the contract provisions to work efficiently. This was his question for our coaching session:

How do I map out a complex scope of work (material and services purchase) to better identify what the contract should cover even though I am using a template (contract)?  

Treat each of the purchases individually before you look at how they interact with one another.

I like to think in a linear fashion. The contract professional, along with the appropriate stakeholder(s), should think about the following questions for each of the two types of work – purchase of items and purchase of a service.

There are two goals in answering these (or similar) questions. The first goal is to understand how the answers to each of these questions impact common template provisions.  The second goal is to identify any contractual provisions that are not included in the template.

These are some questions that popped into my head as I looked at the RFP. These questions were just the beginning of our conversation with the stakeholders. This is not an exhaustive list. So, in your own daily work, start with this list and build on it.

Purchase of Items/Materials

• Is the supplier buying materials for us (buyer)? If yes,
  • Is the supplier passing through warranties from third party manufacturer?
  • Or, is the supplier using their own warranty provision to warrant the materials?
• If we are buying the materials how do we stay within the provisions of the manufacturer warranty as the supplier accesses the items?
• Do we need the supplier to test the materials?
  • If so, why them and not us?
  • How will that test be done, where and what reports will be generated?
• What if there is mechanical failure etc.?
  • How do we want to handle the failure?
  • If we handle it, does the supplier who is accessing the item understand the technical specifications and warranty provisions?  
• Does the purchase of the item constitute acceptance or does a successful test?

Purchase of Specialty Software

• What exactly in lay person’s terms do we (buyer) need? Don’t worry about it being in legal terms for now, just make sure you understand things like:
  • Do we need to make adjustments to the code over time, or
  • Do we need to get the code to work with new items we purchase and need to include in the network, etc., or
  • Do we need our other suppliers to be able to access the code over time etc.?
• In terms of a license in lay person’s terms:

• • A license for what exactly?
  • How long do we need the license?
  • And realistically to what extent does the line of business need a license? (The template will ask for ownership, the moon and the kitchen sink, but the line of business may only need the kitchen sink.
• Will the supplier need access to our underlying software system?
  • Do we have that right from the originator of that software? If not, can we get it? 
• Will the supplier need access to another contractor’s software? Can they legally do that for us?
• Do we need to own the software to be able to modify it over time? Or, can we modify it without owning it, which might be less expensive.
• How long does the supplier intend to service the software (i.e. upgrades)?
• Does the item we are purchasing for this SOW have its own software of any kind at all? If so, how does this code impact that software?
• How will the warranty work vis-à-vis third party rights since the supplier may be accessing our existing software?

Now Look at the Templates

After we got answers to these initial questions, the contract professional and I took a look at the templates (for a “material” purchase and a software license) to identify any provisions that we had to have, provisions that might conflict with our needs, and identify any missing legal language.

If one of your team members can benefit from contract negotiation coaching, email me.