IACCM Contract Management Forum

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2015-03-25 09:02:50

Work Order and Change Order

We have a SOW and spend defined over 2 years, as defined in contract we raise Work Order for specific work. If somebody can help why do we need Work Oder, why cant we define the work in Sow and why cant we have Change Request to add scope of work.

Thanks in advance!.
 •  New Zealand Defence Industry Association (NZDIA)  •   2015-03-27 02:00:28
A bit of a guess but it may be due to the accounting package they use which requires the raising of specific orders to trigger the right to get payment.
Some of the big packages are dogmatic in their requirements and which are hard to get around.
 •  Hyland Software, Inc.  •   2015-03-31 07:35:26
We enter into a SOW with our Customers that covers the basic terms and conditions and address the scope and pricing in the Work Order. This provides us the protection needed while giving the professional services department the ability to manage projects without involvement from contracts/legal.
 •  Australian Taxation Office  •   2015-03-31 19:13:19
I am also guessing to fill some of the gaps in the information you've provided, but I suspect you have a services agreement of some sort. If you have a contract to complete a specific, once-off project, then you can pretty much define everything to be done in the SoW. With a services agreement on the other hand, you tend to define the services you want and agree a price, but you can't necessarily define in advance how many of those services you want or where or when you want them. We also have a spend over the whole term shown in our contracts - but it is only our 'best guess' based on what we know today and can change at any time.

For example, WAN services are listed in one of our contracts, with various different bandwidths and performance levels, and agreed pricing. At any time we can ask the provider to decommission a site (so that WAN link drops out of the equation and the total price) or connect a new building (in which case they start billing us for that new service, at the price already agreed in advance). We use something like a work order to do that (it's actually a non-standard service request in our case). So, the contract defines all the services we are buying or might want to buy in the future, and we use work orders to say "OK, now we want you to actually do that"...
 •  Phillips 66  •   2015-04-14 08:54:33
We typcially describe everything in the Scope (SOW) and that document is the call off from the main master contract. But having said that we use SAP so a "paper" Sow has to be input into SAP in the form of a Service or Work Order for the SAP payables process to be enabled. So like one of your other comments that's probably the reason.
 •  Dassault Systemes  •   2015-04-22 00:37:23
I would hazard a guess it could be for:
1) Paying invoices against an activity as there may be multiple work breakdown structures covered by the SOW
2) Financial approval when invoices come in. Ensuring that the contract owner is happy with the goods and/or services have met the requirements of your business
3) Allows you to track commitment and expenditure vs your budget (SOW work value)
 •  MacTaggart Scott  •   2016-04-25 05:15:31
With the limited text it is difficult to provide a concise response, however based on your text my response would be:

Defined spend is customer focus based on financial spend limitation over the duration.
Work Order will define the deliverable and as such recognise when a deliverable criteria is complete / met and will trigger payment.
Change request will recognise change within the Work Order and will be important as to reciognise completion and hence trigger further payments.
Control and visibility of spend and growth within work orders will be important to the customer and the supplier.
 •  VPM Consulting Services - BCHydro  •   2017-09-07 05:55:06
I am not familiar with the exact terms of your contract. But a work order and change request are not the same thing, one does not replace the other. The change request comes from your contractor and specifies what is requested as a change, this can be approved or not after evaluation. The work order is an order to start work that normally contains, scope, work methods, safety requirements, etc, but it is not a commercial document, it does not have commercial value, so if the contract will be amended you still need a change request and then a change order to seal the deal. Hope it helps,
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