The scope of work might be the most important part of a construction agreement – even more important than the price! Without a defined scope of work, there’s no way to know what work must be done. That means it’s incredibly important to establish the scope when contracting to show what tasks must be done, and who’s responsible for those tasks.
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Defining the Scope of Work is Crucial for Project Success
The scope of work might be the most foundational piece of a construction contract. It should clearly communicate the expectations of the contractor or sub. Without a clearly defined scope of work, the potential for defects, payment disputes, and project delays will soar.
A scope of work document (aka statement of work) is an agreement over what work is to be performed. It might be it’s own separate document that’s a part of the construction agreement, or it could just be a section of the contract. Regardless, it’s a detailed description of what’s expected from contractors and subs.
The scope of work will outline who is responsible for completing which task, the project schedule, and any other necessary details for contractors and subs. It establishes a baseline of rights and obligations. A scope of work isn’t set in stone, though – they’re commonly modified via change orders and partial terminations.
Resources on Altering the Scope of Work Mid-Project
- Contractor Guide to Change Orders
- Deductive Change Order vs. Partial Termination for Convenience | Which is better?
Without a Written Contract, It’s Tough to Define the Scope
There are a lot of reasons that construction contracts should be made in writing. Without a written contract, it’s too easy for miscommunications and misaligned expectations.
Maybe the biggest issue with a verbal contract is that there’s no one point of reference for the scope of work. When a contract is put to writing, both sides have something to point to when there’s a disagreement or miscommunication. A contract acts as a north star, especially when it clearly sets out the scope of work and the cost of that work. That way, there’s absolutely no question as to what work needs to be done, and what will be paid for it. Plus, when the contract is in writing, it will be obvious how a change to that scope of work will be made (typically via change order).
Elements of the Scope of Work
There’s no single way to set out the scope of work. Still, there are some general considerations that should be included.
Project Overview. A short, concise statement summarizing the project description. The overview should list critical objectives that must be achieved in order to complete the project successfully.
Project Deliverables. This section should detail all the expected project goals that need to be reached throughout the lifespan of the project. It will ideally include enough relevant information to provide contractors and subs a clear understanding of the project requirements.
Project Scope. The project scope will give you essential details regarding the precise tasks and their technical aspects. Specific methods and techniques required for the completion of a contractors performance will be listed, along with the evaluation criteria.
Schedule Summary. Not a full detailed construction schedule, but rather a general list of tasks, and related tasks for the project and when they are expected to be completed. Contractors need to plan around their deadlines. To do so, they should be told the overall anticipated project timeline, delivery dates, and any relevant completion milestones.
Project Management. This section of the scope of work will define the administrative procedures on the project. How are change orders handled? When and how are payments going to be issued? These questions are ideally answered in this section, along with any other pertinent contract and legal requirements.
Include Clear Terminology and Definitions
Clear wording and terminology go a long way to minimize the risks of disputes, claims, and litigation. Also, including a glossary or definition section can help avoid any misunderstandings. The construction business is rife with industry jargon and abbreviations, be sure anyone reading the scope of work can actually read it.
Set Reasonable Goals and Expectations for Your Project
Your project goals should be ambitious but realistic. Thus, when drafting a scope of work, these goals should be worded broadly enough to be easily referenced, yet specific enough to provide the information necessary for performance. Your project’s objectives should state the time and materials expected for each task, so contractors and subs know what they need, and how much time they have to perform.
Include Some Visual Aides
Photos, graphs or drawings are an excellent way to be sure that any ambiguous terms are clarified. Even with a definitions section, some words or phrases are still open to more than one interpretation. Providing plans or models (whether via sophisticated BIM software outputs or crude and simple sketches) can reduce any misunderstandings and give a point of comparison with the actual progress of the project.
Have Contractors & Subs Sign-off on Their Scope of Work
This is an incredibly simple way to prevent disputes. Have each subcontractor sign off on a copy of the scope of work to confirm that they have received, read and understand their obligations. And not just at the start of the project, have them sign off every time milestone or individual objective is reached.
Proper communication and transparency will prevent construction payment disputes, and that starts with a crystal clear scope of work. When both parties understand what’s expected, everything else tends to fall into place. Plus, referring back to the scope of work keeps parties on task, which helps to complete the build on time and on budget.
If a dispute does arise, the scope of work will be an invaluable resource. Obligations and responsibilities that are expressly listed can help support or extinguish disagreements. Lastly, a well-formulated scope of work can provide a certain level of security. Contractors and subs are not only guaranteed they get paid what they expected but are also aware of what happens should they fail to achieve what’s expected of them.