Business Contracts: Scope of Work

When creating a business contract on a KFS Purchase Agreement, it is critical to fully document the complete Scope of Work (SOW), so that all parties have the same understanding of expectations and deliverables.

On your KFS Purchase Agreement, answers to the following questions should be clearly stated.

  • What needs to be done? What is the purpose of the work?
  • Who will do what? What are the roles and responsibilities of each party? Will contractor or university equipment be used?
  • When should it be done? During what dates and times will the work be completed? There should be a schedule for contractor duties, as well as university duties.
  • Where will the work be performed? Sometimes undeveloped land can only be described with an APN (assessor’s parcel number) since no address exists. If a service is being performed on non-university property, include the property or land use agreement # that exists between the property owner and the university.
  • Will reports or summaries be required by either party? What are the required deliverables? These can include theoretical models, computer software, drawings, documentation, reports or other data.
  • Are there project milestones? Project milestones are set dates for certain tasks to have been completed.
  • What is the total cost of the services? You must provide documentation, usually in the form of multiple quotes, showing that the price to be paid is fair and reasonable. Please be aware that any price exceeding $50,000 may require competitive bidding. Once your request has been submitted, Contracting Services will review all associated documentation and will contact you if competitive bidding is necessary.
  • What is the payment schedule? For example: monthly in arrears (after that portion of the work has been completed) based on the number of hours worked, payment upon receipt of deliverables, payment upon achieving certain milestones, etc. Prepayment is generally not allowed. Remember that the payment process cannot be started until the agreement has been signed by both parties (university and contractor).
  • Is it anticipated that additional work will result from the outcome of the project? Some types of contracts (e.g. consultant agreements) require future work to be described in the original agreement as there is a California Public Contract Code prohibition against “follow-on work.” Good contract management includes forecasting the entire length of a project and its associated costs so as to avoid going over required public bidding thresholds.
  • Who will own the work product resulting from the service provided? The general rule is that the university owns the work, including any resulting copyright.
  • Once you have defined a scope, be sure to obtain several informal quotes for the work so that you can provide reasonable cost justification for selection of a particular supplier.
  • If this project is funded by a grant, the following information is required:
    • The cover sheet of the grant that lists the grant number and funding agency
    • The signature page showing the grant is finalized
    • The portion of the grant that describes the needed service in order to:
      • Ensure the service is not research, which would need to be processed through Sponsored Programs;
      • Identify the person/company being named;
      • Determine if the funding agency is expecting the university to competitively bid the service
  • If it is a sole-source situation in which there is no other known resource, a thorough justification needs to be provided for approval by the Associate Director of Procurement & Contracting Services, or their delegate.