A Statement of Work should define exactly what's being delivered, by whom, under whose direction, and against what acceptance criteria, not just a scope of work and a price. The documents most likely to cause problems later are the ones that describe the work in vague, output-light terms, because that's also where misclassification and delivery risk hide. A proper due-diligence check reads a Statement of Work for nine things: scope, deliverables, control, supplier accountability, pricing structure, term and termination, named individuals, sub-contracting, and the entity actually signing. Missing two or more of these is a reasonable trigger for a closer look.
A Statement of Work is often treated as paperwork to file once it's signed. That's the gap. What a Statement of Work actually contains determines whether an engagement holds up to scrutiny later, on IR35 status, on delivery accountability, and on who's really responsible when something goes wrong. This checklist sets out what should be in every Statement of Work your business signs, what's commonly missing, and how to check an existing estate rather than just new documents.
What should be in a Statement of Work?
A Statement of Work should define the deliverable and acceptance criteria, the supplier's control over how it's delivered, the pricing basis, the term, and the named parties, at minimum. Anything less leaves you unable to evidence what you actually bought. The nine elements below are the baseline for a due-diligence check on any Statement of Work, whether you're reviewing it before signature or auditing your existing estate.
What are the essential elements of a Statement of Work?
- Defined scope and deliverables. What is being delivered, described as an outcome, not just a set of tasks or activities. Vague scope is the single biggest predictor of a document that turns out to be labour supply dressed as a service.
- Who controls delivery. A statement of work should clearly state who directs the work day-to-day. If it's your business rather than the supplier, that's a labour-supply signal, covered in more detail in our guide to genuine contracted-out services versus disguised labour supply.
- Acceptance criteria. How you'll know the deliverable is complete, tied to the outcome, not to hours worked or headcount supplied. They should be actionable items the supplier can be held accountable against.
- Pricing structure. Fixed price, milestone-based, or time and materials, and whether that structure matches the control test above. Time-and-materials pricing tied to named individuals or role type is a common tell for labour supply.
- Term and termination. Start and end dates, and the notice or termination provisions, rather than an open-ended arrangement with no natural close.
- Named individuals, or the absence of them. A genuine service contract shouldn't need to name specific people. If your Statement of Work lists individuals by name, that's worth checking against the control test too.
- Sub-contracting and flow-down. Whether the supplier can sub-contract, and whether your obligations (right to work, modern slavery, IR35) flow down contractually to any sub-contractor.
- The contracting entity. The legal entity actually signing, checked against the entity actually performing the work, since these don't always match on documents routed through intermediaries.
- Governing MSA reference. Which Master Service Agreement the Statement of Work sits under, and whether its terms are actually consistent with it.
How is a Statement of Work different from a Master Service Agreement?
A Master Service Agreement sets the standing terms that apply across a relationship with a supplier, liability, IP, confidentiality, data protection, while a Statement of Work defines one specific piece of work under those terms, scope, deliverables, price and duration. An MSA is signed once and referenced repeatedly. A Statement of Work is signed per engagement. Problems arise when a Statement of Work quietly overrides or contradicts its own MSA, or when work is happening under a Statement of Work with no MSA behind it at all.
What documents and evidence should support a Statement of Work?
A Statement of Work rarely stands alone. Look for a signed MSA it sits under, evidence of the acceptance criteria actually being met on past milestones, and, where relevant, right-to-work and other compliance evidence for anyone named in it. GOV.UK's own contract management principles make the same point from the buyer's side: a contract only works if it's understood and evidenced by everyone managing it, not filed and forgotten.
What are common red flags in a Statement of Work?
The most common red flag is scope written as a list of activities rather than a defined outcome, since that's usually a sign the supplier isn't actually accountable for a result. Others worth checking for: pricing tied to hours or headcount rather than deliverables, named individuals with no substitution clause, a Statement of Work with no matching MSA, and renewal after renewal with no acceptance criteria ever formally signed off. Any one of these is worth a closer look. Two or more together is a strong signal the document needs reclassifying.
Who should review a Statement of Work before it's signed?
Procurement should own the checklist, but the review shouldn't sit with Procurement alone. Finance has a stake in the pricing structure and tax exposure, and HR or contingent workforce teams have a stake in whether the arrangement is really a supply of labour. The organisations that get this wrong most often are the ones where a Statement of Work is signed by whoever holds the budget, with no second check against the criteria above.
How thorough should a Statement of Work review be?
Thorough enough to check every element on this list, on every document, not a sample. In practice that means extracting a consistent set of data points from each Statement of Work, so nothing gets missed because a reviewer skimmed a long document under time pressure. CoComply's platform extracts 70+ data points from every Statement of Work and MSA it analyses, which is the level of consistency a manual, document-by-document review struggles to sustain across a large estate.
How CoComply can help
Checking a handful of Statements of Work against this list is manageable by hand. Checking a few hundred, consistently, is not. CoComply's AI reads every Statement of Work and MSA you hold, extracts 70+ data points from each one, and scores it for the risks that matter, so Procurement gets a consistent answer across the whole estate instead of whatever a reviewer had time to catch. You can request your free analysis of your first five documents to see how your own Statements of Work check out against this list.
Frequently asked questions
What should be in a Statement of Work?
At minimum: defined scope and deliverables, who controls delivery, acceptance criteria, pricing structure, term and termination, whether named individuals appear, sub-contracting and flow-down terms, the contracting entity, and the governing MSA it sits under.
What is the difference between a Statement of Work and a Master Service Agreement?
A Master Service Agreement sets the standing terms across a supplier relationship. A Statement of Work defines one specific piece of work under those terms, scope, deliverables, price and duration.
How many data points should a Statement of Work review cover?
CoComply's platform extracts 70+ data points from every Statement of Work and MSA it analyses, covering scope, control, pricing, term and the other elements in a proper due-diligence check.
What are common red flags in a Statement of Work?
Scope written as activities rather than outcomes, pricing tied to hours or headcount, named individuals with no substitution clause, a Statement of Work with no matching MSA, and repeated renewals with no signed-off acceptance criteria.
Who should review a Statement of Work before it's signed?
Procurement should own the checklist, but Finance and HR or contingent workforce teams should also have visibility, since pricing structure and worker classification both carry risk beyond Procurement's usual remit.
