How to Write a Scope of Services Agreement

A Scope of Services Agreement (SSA) is an agreement between two parties for one to perform certain services for the other. The SSA is the result of a process of analyzing and documenting what steps must be taken to achieve the desired results and of negotiating the price, terms and conditions under which the services will be provided. Writing the SSA is the product of that analysis, which is then used in the process of providing the services as described within the scope of the agreement. Scope of Services Agreements are most often used for professional or consulting services.

Difficulty:

Moderate

Instructions

Things You'll Need

• Access to People who are Users/Recipients of the Services
• Written Approval(s) from the Highest Level Manager(s), as appropriate
• Access to Supervisors/Managers of Users and/or Business Processes
• Any Applicable Standard Operating Procedures (SOP)
• Any Applicable Custom Templates/Formatting Guidance
• List and contact information for potential provider(s) of the services

1. Understand the Purpose and Intentions
   A Scope of Services (SOS), sometimes referred to as a Scope of Work (SOW), describes the tasks or services to be provided and specific deliverables required to achieve the desired result for which the SSA is intended.
   An SOS is the first section of the SSA that must be communicated. The SOS may be provided in writing by the party seeking the services; or, you may be required to determine on your own the intended services to capture the requirements in writing. The result of this step is critical to the success of the rest of the steps. This initial fact-gathering process is intended to reveal any information that you should know in subsequent steps and later in performance of the services in the SSA.
   In Step 1, you need to interview all relevant stakeholders to whom you have access, including, if possible: Users, Recipients, Supervisors, Managers, Customers, etc. Take notes and ask questions to ensure you have a complete, detailed understanding of any factors that may affect the ability of either party to achieve the purpose of the agreement.
   If you have been provided a written SOS (also referred to as a Request for Proposals or Request for Quotes), you must still complete this first step to be sure you understand the actual, real-world circumstances, which are likely to differ somewhat from what is communicated initially.
   The first, most critical, step one must take is to determine, in as much detail as possible, answers to the following questions as they relate to the agreement:
   1. What is the purpose for the agreement;
   2. What is the intended result;
   3. What is the time period, or estimated level of effort, required to achieve the intended result;
   4. What resources must (or will) be available from the recipient party, i.e. budget, equipment, labor, any actions that must occur immediately or any other dependencies that might impact the ability of either party to fulfill the agreement;
   5. Who are the stakeholders, e.g. User(s), Manager(s), Customer(s), Finance(s), etc.
   6. What is the history or background that preceded the need for this agreement, i.e. are these new services, are they ongoing or one-time services, are there incumbents currently providing the same or similar services, etc.;
   7. Determine who are the primary parties responsible for all approvals, coordination and management of the business processes for which the services are related;
   8. What is the status of any previous actions specific to this agreement, e.g. previous procurements, requests for proposals, documentation, approvals, budgets, quotes/proposals received, or any other relevant existing documentation;
   9. Are there SOPs or templates to be used in accordance with company policy;
   10. Who is the primary contact of the recipient party with whom you are to coordinate next steps and how do you contact them, e.g. telephone number, email, address, etc.?

2. Write a Draft Scope of Services
   Based on all the information acquired in Step 1, review any existing documentation to be sure it is consistent with what you learned in Step 1. The result of Step 2 is to ensure you have a Draft Scope of Services that clearly identifies the following, consistent with what you learned in Step 1:
   • Purpose for the agreement;
   • Detailed Description of the Intended Result or Specific Deliverables;
   • Schedule, time period, and/or estimated effort to achieve the intended result;
   • Resources that will be available from the recipient party,
   o Budget,
   o Equipment,
   o Labor,
   o Actions that must occur immediately
   o Other dependencies that might impact achievement of the intended result;

3. Prepare a Project Summary or Plan
   The purpose of the Project Summary/Plan is to record any of the remaining information obtained in Step 1 that is not included in the Draft SOS from Step 2. This information is required to be captured in writing even though it is not in the Draft SSA. The information is critical to have available as you complete these steps and move into actual performance of services after the agreement is signed.

   The Project Summary/Plan format may be prescribed by the Customer or you may need to use one of your own. A link to an example of a Project Summary is provided in the Additional Resources section of this article. The sections in your Project Summary may be different based on the type of information gathered in Step 1. You should adapt any templates/samples to be sure you capture the specific circumstances of this agreement.

4. Communicate Risks, Gaps, Constraints
   Once you have captured and reviewed all information available from the previous steps, you should make note of any inconsistencies, gaps, barriers, constraints, weaknesses, and/or any other factors that may be considered a risk to achievement of the intended result.
   You communicate to the sponsors of the agreement any risks you identified. Be prepared to provide written documentation of these risks based on the information in the Project Summary/Plan. It is preferable to provide written documentation before scheduling an in-person interview with stakeholders so they are able to bring to the meeting their input to the specific risks identified. It is also good practice to have compiled your ideas on how to avoid or mitigate the risks for discussion during the in-person interview.
   The result of this step is to ensure the sponsoring, recipient party is aware of risks that may need to be addressed before the agreement is signed. These risks must be recognized and possibly addressed within the terms and conditions that are compiled in later steps.

5. Review SOPs/Guidance
   Review any SOPs, templates, guidance or company policy that is required to be used for the agreement. You should have received these during fact-finding in Step 1. If you are not required to use a specific format, you will find a link to an example in the Additional Resources section of this article.
   Draft a complete SSA using any required templates for the terms, conditions, or legal language based on company policy. You will likely include certain terms in the agreement that are dependant on the type of services to be provided, i.e. property or data rights to the deliverables, remedies for failure to perform, warranties, etc. It is your responsibility to understand the type of services being provided and which contract terms are appropriate. You may be required to consult with legal or contract specialists in this step, depending on company policy.
   As you complete the Draft SSA, capture any questions, inconsistencies, gaps or errors that may result by using a generic template for the specific circumstances of this agreement. Consult with subject matter experts as necessary to resolve any issues that are identified as a result of this step.

6. Review Risks, Schedules, Deliverables, etc.
   Review the Project Summary/Plan and any subsequent notes or documentation from previous steps. Compare each individual point of information obtained in Step 1 against the Draft SSA from Step 5.
   Are each of the questions from Step 1 addressed within the scope of the Draft SSA?
   Have each of the Risks, Gaps, Constraints from Step 4 been eliminated, mitigated, or addressed sufficiently within the terms, conditions, schedule or descriptions of services?
   Any issues, questions, or problems identified in this step must be separately documented as an update to the Project Summary/Plan. This updated document along with the Draft SSA should be provided to the stakeholders for their information and action to resolve, to determine no longer an issue, or to be recognized as a known risk to be tracked and monitored.

7. Obtain Official Approval of Final SSA
   After all issues, edits or changes from the preceding steps have been addressed, you are ready to put the document into a final form to be approved at the highest level necessary by the sponsoring party. You should not take any actions beyond this step until the Final SSA has been officially approved as required, preferably the approval is to be provided in writing.

8. Obtain/Review Proposals or Quotes from Provider(s)
   At this stage, your actions will be guided by the circumstances specific to your situation. You may have already obtained information from the party who will be the provider of the services, or you may need to seek quotes or proposals from potential providers of the service. Use information gathered in Step 1, Question No. 8 to determine the next steps
   In either situation at this stage, you must insure the Final SSA resulting from the preceding steps is consistent with the understanding of the provider(s) according to the proposed prices, schedule, and services, as communicated by the potential provider(s) of the services. Best practice is for potential provider(s) to produce a written proposal that specifically addresses the SOS, Terms and Conditions as documented in the Final SSA.
   At a minimum, you should meet with the potential provider(s) to verbally review the Final SSA so you can question the other parties understanding of the requirements before you begin negotiating in the next step.
   Review the written proposals against your understanding of the intended result of the agreement to determine which of the proposed providers offer the best value to the sponsoring party considering the price, terms and conditions of the specific requirement. At this point, you may be responsible for selecting a provider or you may be required to provide recommendations to a decision-maker of the sponsoring party.
   In either situation, the result of Step 8 is to select one or more potential providers with which to continue negotiations of price, schedule, terms and conditions, as appropriate.

9. Negotiate Final Terms
   At this step, the potential provider(s) shall have satisfied decision-makers of the sponsoring party that the providers have a clear understanding of the Scope of Services (SOS), Terms and Conditions of the Final SSA. You shall also have confirmed that the provider(s)' proposed prices and services have been clearly communicated and are judged to be consistent with those desired by the sponsoring party.
   Depending on specific circumstances, you may wish to initiate discussions between the two signature parties to negotiate any unresolved issues related to the Proposed Price, Schedule, Terms and Conditions. The result of this step is to reach a point of common understanding and agreement between the two signature parties to the written Final SSA, which may require iterative edits and reviews to ensure each party is in agreement with the final written document.

10. Signatures and Kickoff
    After agreement is reached on the written SSA, your next steps will be guided by the SOPs and results of preceding steps. You may have each party separately sign the same copy of the document, or you may wish to have a meeting at which the individuals with signature authority are both in attendance to sign the document at the same time.
    In either situation, it is considered good practice to schedule a "kickoff" meeting at which the relevant persons from each party are present to introduce the service providers to the recipients/users. The intention of this meeting is to make introductions, answer any questions, address any remaining risks, and plan to kick off the services

    Congratulations, you have completed the 10 Steps necessary to write a scope of services agreement. These steps must be adapted to your specific circumstances; however, if you follow the steps as outlined the result will be a clear, well-written agreement.

Tips & Warnings

• The federal government has well defined, complex regulations for procuring services. If you are working with any government entity, you will be required to follow the acquisition regulations for that entity. The Federal Acquisition Regulations, used by the federal government, may serve as a model for other public entities. http://www.arnet.gov/far One of the best sources of information and formats for a services agreement are previous agreements for the same or similar services. If any such examples exist for the sponsoring party, use those as a guide for the process and the agreement.

• There are many variations of the form and content of a Scope of Services Agreement. The first source you must consult is the party that seeks to receive the services. As the purchaser of the services, they are most likely to have defined procedures, formats, and rules that guide soliciting and contracting for services. The success of the agreement is a direct result of the degree to which you document the full scope of the services before soliciting proposed prices. Changes in the scope are highly likely to occur from the time the initial requirements are identified to the time at which the services are provided. Users often are not able to fully articulate their needs without assistance to systematically define expectations. The process described in this article is intended to identify potential pitfalls and to address such as you go through the steps.

Resources

• Example and guidelines for writing a Scope of Services Agreement from the State of Connecticut
• Guidance issued by American Society of Interior Designers with Sample Scope of Services