The Work Contract or Subcontract—Contract Based on a Statement of Work
One way to secure resources when needed is through a request for proposals. This request for proposals includes a statement of work, which means that, in theory, any company or self-employed individual can apply for the contract. This allows for the development of new resources. This includes companies and freelancers with whom the parent company has not previously worked.
This approach is cost-effective. Above all, it saves companies the trouble of spending a long time searching for businesses with available resources and contacting each one individually. Instead, companies that have spare capacity and are looking for new contracts can review these requests for proposals and respond to them if they match their available capabilities.
What is a statement of work?
The scope of work is included in the request for proposals and is an essential part of it. It specifies what the contract entails and what must be accomplished to fulfill it.
A scope of work often includes tables that list the services, describe their type and quantity, and define the requirements for their successful delivery. To ensure that a scope of work meets all requirements, it must be product-neutral and formulated in accordance with DIN 276.
The detailed description of the service allows bidding companies to determine whether they can meet the requirements. This includes whether they can actually provide the service, achieve the required quality, and complete the work within the specified timeframe. At the same time, companies interested in bidding can now calculate the costs and determine what price to charge for the service.
The statement of work thus serves as the basis for companies to submit bids. Therefore, it is best to draft it as precisely as possible in order to encourage the right companies to submit bids. It also serves as the basis for cost estimates; therefore—to avoid future negotiations and legal disputes—the description should be as precise as possible in this regard as well.
Scope of Work – The Key to Success
Ultimately, the scope of work also serves to determine whether the project was successful. In other words: Was the required service performed or provided under the terms of a service contract? Was, under the terms of a Contract for Work and Materials Was the work to be performed completed in accordance with the description? These questions may need to be resolved in court. Here, too, it is helpful to define the requirements as precisely as possible in the scope of work. Otherwise, anything that is not unambiguously clear will be left to the court’s interpretation. But that, of course, creates legal uncertainty, which is best avoided from the outset.
This, of course, requires very detailed specifications in the scope of work. For this reason, it is often presented in two ways: First, it is provided as a general description—which allows a company interested in bidding to determine whether submitting a bid is even worthwhile. The second approach is a detailed description, which then serves as the basis for the provision of services.
The Three Functions of the Statement of Work
- Bidding Document: Guidelines for applications from subcontractors and freelancers.
- Basis for calculation: Bidders calculate their prices based on the defined quantities and services.
- Part of the contract: Once the contract has been awarded, the contracting authority determines what constitutes performance in accordance with the contract—and in the event of a dispute, it decides the matter in court.
Who prepares the scope of work?
However, even drawing up a statement of work requires a qualified professional. This means someone with the technical knowledge and skills equivalent to at least a Electrician is required to do so. The person must know and understand the project's parameters and derive the corresponding requirements from them.
If the project is part of a construction project, the German Regulations on the Award of Contracts and Contracts for Construction Work (VOB) must also be observed. This also requires a certain level of legal expertise.
Specifications are often created using software. This means that, once again, a certain level of IT expertise is essential. In addition, drafting the specifications themselves is a time-consuming process—even if the company has all the necessary expertise in-house. Employees must be assigned to this task. Furthermore, additional employees must then be tasked with reviewing the completed specifications to ensure they are technically and legally accurate.
Stakeholders and Their Roles in Developing the Lesson Plan
| Person Involved / Role | Task in the LV Process | Required Skills |
|---|---|---|
| Project Manager / Construction Manager | Defines project goals, scope, and technical requirements | Expertise in the respective trade |
| Specialist Planner / Electrical Engineer | Translates project goals into measurable performance metrics | Electrical Engineering, Standards (VDE, DIN), HOAI if applicable |
| Lawyer / Legal Department | Reviews compliance with the contract, compliance with VOB, and liability issues | Procurement and Contract Law, VOB/B |
| Calculator | Generates estimated prices, checks quantity entries for plausibility | Construction Cost Estimation, Market Knowledge |
| LV Software Users | Enters positions into life insurance software (e.g., ORCA, California, AVA) | IT skills, software knowledge |
| Inspector / Quality Assurance | Checks for completeness, consistency, and compliance with DIN standards | Technical and Legal Knowledge |
What does a bill of quantities include?
The level of technical expertise required can be quickly determined by looking at what exactly is included in the scope of work. This includes the type of work requested, the quantity, the conditions for performing the work, the existing circumstances, and the requirements for success.
1. General Information
- If applicable, reference to a request for proposals or a procurement platform
- Project Name and Project Description
- Place of Service Provision
- Client / Project Manager
- Time Period or Execution Deadline
2. Positions with Job Descriptions
Each line item describes a specific service, including quantity, unit, long text, and short text. The bill of quantities is structured as a table containing the item number, the quantity, the unit of measure, a long description, a short description for reference, and a unit price. The total price, calculated based on the quantity and the unit price, is listed at the end.
3. Service Areas (Trades or Sections)
- 01 – Preparatory Measures
- 02 – Electrical Installation
- 03 – Distribution and Switchgear Systems
4. Special Services
- Additional requirements (e.g., night shifts, documentation requirements)
- Additional Benefits
- Maintenance or Service
- Training, Instruction
Sample Structure: Scope of Work for Electricians
| Item. | Quantity | Unit. | Short text | Long text (excerpt) | EP (€) | GP (€) |
|---|---|---|---|---|---|---|
| 01.01 | 1 | pau. | Construction Site Facilities | Setting up the construction site, including tools, protective equipment, and safety measures | ___ | ___ |
| 02.01 | 120 | m | Install NYM-J 3×1.5 mm² | Installation of NYM-J 3×1.5 mm² sheathed cable in a wall, including cutting slots and sealing | ___ | ___ |
| 02.02 | 15 | pcs. | Install a Flush-Mounted Outlet | 230 V/16 A flush-mounted outlet, with ground fault protection, includes flush-mounted box and frame | ___ | ___ |
| 02.03 | 8 | pcs. | Installing a Flush-Mounted Light Switch | 10 AX Flush-Mounted Changeover Switch, including switch box, cover, and label | ___ | ___ |
| 03.01 | 1 | pcs. | Install a subdistribution panel | AP subdistribution panel, 3-row, 36 TE, including circuit breakers and RCDs as per the plan | ___ | ___ |
| 04.01 | 1 | pau. | Documentation & Handover | Preparation of inspection documentation, measurement report in accordance with DIN VDE 0100-600, training | ___ | ___ |
Misunderstandings and ambiguities create a gap that, in the event of a legal dispute, is then filled by the judge’s interpretation. To avoid this, the document must also include a table that lists and explains all terms and positions.
In the context of construction projects, the Fee Schedule for Architects and Engineers (HOAI) must also be included in the calculations. There is also a standard bill of quantities for this field, which contains a collection of descriptions applicable to construction work. This allows construction work to be described in a uniform and standardized manner.
Relevant Standards and Regulations
| Set of Rules | Full Name | Relevance to the course |
|---|---|---|
| VOB/A | Regulations on the Award and Execution of Contracts for Construction Work, Part A | Procurement Procedures for Public Contracts, Minimum Requirements for Requests for Proposals |
| VOB/B | Regulations on the Award and Administration of Contracts for Construction Work, Part B | General Terms and Conditions – considered an integral part of the contract along with the Specifications |
| VOB/C | Regulations on the Award and Execution of Contracts for Construction Work, Part C | General Technical Contract Conditions (ATV) for Each Trade – Define Construction Standards |
| DIN 276 | Construction Costs | Classification of Cost Groups – The Specifications Must Be Formulated in a Product-Neutral Manner in Accordance with DIN 276 |
| HOAI | Schedule of Fees for Architects and Engineers | Scope of work for the planning phases during which the specifications are prepared (Phases 6 and 7) |
| DIN VDE 0100 | Installation of Low-Voltage Systems | Minimum Technical Requirements for Electrical Installations – Basis for Specification Items |
Specifications for a Request for Proposals
Once the specifications have been drawn up, the next question is where the actual call for bids should be published. Especially today, in the digital age, there are plenty of options for this. The choices range from daily newspapers to your own website to specialized online portals.
Daily newspapers come with costs, and their reach is limited depending on the newspaper. Many companies also focus primarily on online research, as it can often be done much more quickly.
Posting the job listing on your own website has significant advantages. For one thing, you have full control over the content, and there are no costs associated with a successful hire or with posting the listing. However, there is no guarantee that someone will visit the site at the right time and find the listing.
When posting on certain platforms, you must follow their rules. This includes the format, the duration during which the listing is visible, and the fees charged. This means your company no longer has full control over the content.
Comparison of Tender Channels
| Channel | Costs | Range | Control Over Content | Suitable for |
|---|---|---|---|---|
| Own Website | No recurring costs | Limited (only visitors to your own site) | Complete | Well-known subcontractors, regional contracts |
| Daily Newspaper / Trade Press | Moderate to high | Regional to national | High (custom ad text) | Local contractors, limited number of bidders |
| Public Procurement Platforms (e.g., DTVP, Bund.de, evergabe) | Low to moderate | Nationwide, standardized | Limited (format requirements) | Public contracting authorities (mandatory), large projects |
| Private-Sector Portals (e.g., Meine-Ausschreibung.de, Vergabemarktplatz) | Fees (often a commission upon signing the contract) | Highly specialized bidders | Limited (Portal Rules) | Private clients, a wide range of bidders |
| Direct contact with known subcontractors | None | Very limited | Complete | Long-standing suppliers, specialized trades |
| Recruitment Agency | Included in the hourly rate | High (existing candidate network) | High | Labor Requirements Instead of Work Performance – No Request for Proposals Required |
How is a contract awarded based on a statement of work?
A contract with a statement of work is often a way for the public sector to transparently communicate an existing need. However, private companies also use the same approach. The goal here is to find new contractors at a reasonable cost to meet an existing need.
These requests for proposals are attractive because they make it clear from the outset what is needed, in what form, and by when. This allows the service provider to prepare a realistic price quote and submit it as part of their bid. This, in turn, gives the contracting company the opportunity to compare prices and select the most attractive bid from among the proposals.
Procedure for the Contracting Process Using the Specifications
| Phase | Step | Responsible | Result |
|---|---|---|---|
| 1. Preparation | Create a bill of quantities (items, quantities, standards) | Client / Specialist Planner | Finalized LV Document |
| 2. Call for Proposals | Publish the RFQ on the selected channel; invite bidders | Client | Bidding documents sent |
| 3. Bidding Phase | Bidders review the request for proposals, prepare their bids, and submit them | Bidder (Subcontractor) | Incoming bids with unit prices |
| 4. Testing & Grading | Review bids from a technical and business perspective; compare bidders | Client | Bid ranking, negotiation if necessary |
| 5. Placing an Order | Award the contract; enter into a contract based on the specifications | Client | Signed contract for work and services with the specifications attached |
| 6. Implementation | Service delivery in accordance with the specifications and quality requirements | Contractor | Completed Work, Documentation |
| 7. Acceptance & Billing | Acceptance in accordance with VOB/B; billing based on actual quantities | Client + Contractor | Final Invoice, Defect Report |
Conclusion: Pros and Cons of Contracting Based on a Statement of Work
The advantage of a job posting with a scope of work is that it reaches the entire potential audience. This makes it possible to tap into new resources that were previously unknown and to find electricians as needed. In addition, workers are paid only for the time during which their services are actually needed.
However, there are also significant drawbacks. For example, there is no guarantee that a company or electrician will be available exactly when your company needs their expertise. In addition, drafting the scope of work requires considerable expertise in technical, legal, and IT matters.
| Advantages | Disadvantages |
|---|---|
| Transparent competition—prices are easy to compare | Preparing the specifications is a time-consuming process and requires expertise |
| Recruiting new subcontractors and freelancers | No guarantee of availability—there may not be any suitable bidders. |
| Legal Certainty Through a Precise Statement of Work | Costs for Tender Platforms and Legal Review |
| No long-term employment commitments required | Loss of Control Over Content on Third-Party Platforms |
| A Clear Basis for Acceptance and Billing | When there's a flood of calls for proposals, your own project gets lost in the mix |
| Scalable – also suitable for large-scale projects | Delays caused by the bidding phase and review |
Frequently Asked Questions About the Scope of Work
The scope of work is the overarching term—it encompasses all information regarding a service being put out to bid. The bill of quantities (BQ) is the tabular, item-by-item listing within the scope of work. It contains fields for item number, quantity, unit, short description, long description, and unit price. The LV is thus a formalized tool within the more comprehensive scope of work and serves as the direct basis for bidders’ price calculations.
Yes—this is a fundamental requirement, especially for public tenders under VOB/A. "Product-neutral" means that no specific brand names or manufacturer products may be specified that can only be supplied by a single vendor. Instead, functional characteristics, standards, and technical parameters are described. Exceptions (e.g., “or equivalent”) are permitted but must be justified. For private contracts not subject to VOB requirements, this is not formally mandatory, but it is recommended in order to avoid unnecessarily restricting competition among bidders.
The VOB (Procurement and Contract Regulations for Construction Work) is a three-part set of regulations governing construction contracting in Germany. VOB/A governs the procurement process and sets requirements for the request for proposals and the scope of work. VOB/B contains general contract terms that, along with the scope of work, become part of the contract. VOB/C contains General Technical Contract Conditions for each trade and defines what constitutes proper performance of the work. The VOB is mandatory for public contracts. For private contracts, it may be incorporated by express agreement—which often happens because it is a tried-and-true set of rules.
As detailed as necessary to avoid misunderstandings during execution and subsequent disputes during acceptance. For electrical work, the specifications should include at least the following: type and cross-section of the cables, installation method (surface-mounted/concealed), the number and type of outlets, switches, and light fixtures; requirements for distribution panels and protective devices (RCDs, circuit breakers); metering requirements in accordance with DIN VDE 0100-600; and documentation and handover services. Anything not specified in the specifications is not required in the event of a dispute.
Once the contract is concluded, the scope of work becomes an integral part of the contract and can only be amended by mutual agreement. Subsequent changes to the scope of work—known as amendments—must be agreed upon in writing and may result in additional or reduced compensation. The VOB/B sets forth the requirements for additional services (§ 2 VOB/B). Ambiguities in the original scope of work are the most common cause of disputed addenda—reason enough to draft the scope of work as precisely as possible from the outset.
In a contract for work and services with a statement of work, the contractor is obligated to deliver a defined result (the finished work)—he is liable for defects and bears the risk of performance. The skilled workers remain employees of the subcontractor; the client has no direct right to issue instructions. In the case of temporary staffing, on the other hand, the staffing agency provides skilled workers who work under the direction of the client—for an hourly wage without liability for results. Both models are legally valid but must be kept clearly separate from one another—hybrid forms can be classified as sham contracts for work and punished with substantial fines.