Statement of Work, Delivery Schedule and Invoicing Schedule

Once you’ve been awarded a government subcontract, make sure the job goes well by studying the following tips and potential trouble spots. Government subcontracts typically have three basic parts: the statement of work, the delivery schedule, and the invoicing schedule. Your company may need to attend one or more pre-work meetings so that your managers know what is expected of them - and what technical, financial, and regulatory oversight will be required.

Statement of Work

This part of the contract will resemble the statement of work that appeared in your subcontracting proposal, except this one is binding and thoroughly spells out the government’s requirements and the contractor’s demands. The purpose of statements of work is to specify what gets done and to what specifications. The statement of work will also list details about the job and how any changes to the plan should be made. The statement of work should also note the official contacts on both sides, along with whom to contact if a problem arises. It may also spell out how much support the prime contractor will offer toward completing the task.

Delivery Schedule

Although the delivery schedule is not usually as formal as a statement of work, this is an important list of the specific deadlines for each part of the job. The stages may range from initial design to retooling to final delivery and inspection. These deadlines are crucial because they will help the prime contractor integrate your work into the overall project. There may also be provisions for schedule changes in case the prime misses its own deadlines.

Invoicing Schedule

Unlike the statement of work and delivery schedule, this document explains how you get paid. Does the money come all at once, or in installments? When can you submit invoices? Will the prime reimburse costs or over-budget expenses? Will you be penalized for late or unsatisfactory work?

Potential Problems with a Statement of Work, Delivery Schedule or Invoicing Schedule

Before you sign the contract, make sure you ask the prime contractor any and all questions so you can avoid grievances later on. Here are some issues to consider:

• Termination: If the government agency ends the prime contract, for whatever reason, what happens to the subcontract? Assuming work stops immediately, will you be paid for partial fulfillment?
• Flow-down: Have you been notified of all the government’s rules and requirements? For example, do you have to adhere to certain hiring policies, safety codes and material requirements? If everything is not clear at the start, trouble could arise later.
• Informal agreements: Don’t trust a handshake or a verbal promise. Get everything in writing to protect your business. A statement of work is a necessity.
• Specifications: Anything the prime contractor wants done should be covered in the contract and statement of work. As a rule, subcontractors shouldn’t attempt extra work unless authorized in writing to do so. Also, if the prime contractor’s agreement with the government changes, the prime contractor should let you know about these changes as soon as possible. This may cause you to revise your statement of work.
• Prime involvement: Will representatives from the prime contractor visit your business regularly?
• Deliverables: How should the final goods arrive? Should they be shipped, delivered, or prepared in a certain way? Will your business need to assist with installation, adjustments or repairs?
• Missed deadlines: Is the specified delivery date a suggested or final deadline? What happens if the deliverables are late? Are any penalties involved? Has everything been defined in the statement of work?