In section 12.3.3.2, states that the seller's performance is "compared against SOW budget for the work performed."
Why is the SOW "budget" and not "planned"?
Isn't the SOW already part of the contract at this phase? Saving Changes...
Sort By:
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
I understand your point. That´s because the SOW is used along the entire procurement process as the key input to manage the relation with the seller. In fact, the SOW budget must be equal to the information inside the project budget and all the changes must be created and controlled against the SOW. Saving Changes...
I would consider this a bit differently than Sergio. The budget is the planned expenses plus the contingency funds.
An example is a project that involves retrofitting some existing product. A remodel of an older home would be a simple example. Going in, a contractor knows that they are likely to find unexpected problems once they get into the job. Depending on the contract type, the contractor may be responsible for fixing some of the unplanned problems along the way. For this reason, the budget includes not only the planned work, but an allowance for unplanned work.
You might say that the plan includes unplanned work, but we can't itemize what we don't know in the statement of work, or even what part of the WBS will encounter problems. This might reveal how well we account for the inevitable unplanned problems on top of the planned work. Saving Changes...
The confusing part in that sentence is the "budget". I would think "planned" would have been clearer. In real life situation, SOW included in the seller's contract is often changed to fit asbuilt conditions and so forth. Saving Changes...
Khai Ng.IT PMO | IT Project Manager| TTGROUPHanoi, Viet Nam
Procurement statement of work (SOW) should be updated for each approved change request so that it is considered as a baseline document that will be used for future performance control. The full phrase is "the cost incurred and accepted against the SOW budget"; we are comparing the cost then, I think, the term "budget" will be clearer. Saving Changes...
