One of the most critical aspects of any contract is the definition of contract deliverables. Deliverables are often called a statement of work, a statement of requirement, specifications or other similar terms and should explain the goods or services to be provided under the contract.

A common approach is for contract deliverables to be described in terms of the results or outcomes required, particularly in relation to services. The emphasis on results and outcomes rather than on inputs and processes used by the contractor can allow the opportunity for operational flexibility and innovation. This can increase the possibility of achieving the same results at lower cost than if the acquiring entity specified the detailed processes to be used or followed.

Nevertheless, in some situations, a more prescriptive description of the contract deliverables may be appropriate particularly where there is little scope for flexibility in how services will be provided.

The following case study provides two examples of contract deliverables.

A common approach is for contract deliverables to be described in terms of the results or outcomes required …

Case Study: Specifying contact deliverables

Example 1

Provide office cleaning services at the entity's premises in all capital cities for three years that meet specified performance standards.

Example 2

Conduct a review of the operation of the […] Scheme over the past three years. Provide a report on (a) the views of key stakeholders on the effectiveness of the scheme and suggestions for any changes, (b) the results of a quantitative analysis of the impact of the scheme in relation to its published three-year objectives, and (c) options for changes to the scheme to reduce administrative costs, together with costs, benefits and possible problems for each option. The report is to be provided within three months and should be of a presentation quality suitable for internal use, and of an accuracy and reliability suited to be used as a basis for policy and budgeting decisions.

Depending on the complexity and nature of the goods or services there may be a short version of the deliverables, followed by more detailed description in schedules to the contract.

The specification of deliverables in most contracts is likely to draw on a number of sources of information to assist with the definition of the results being sought. These include the request for tender, the contractor's proposed and published specifications and other discussions and negotiations.

The statement of deliverables should set out: what needs to be delivered, to what standard and in what timeframe(s). It should be:

•  as concise as possible, while at the same time fully describing the requirement

•  clear, consistent, unambiguous and not conflict with itself or other contract terms and conditions

•  complete, accurate and correct

•  feasible and achievable, and

•  measurable and verifiable.

The statement of deliverables should set out: what needs to be delivered, to what standard and in what timeframe(s).

Depending on the type of contract requirement it should be written in functional and performance terms rather than technical terms. It should also indicate the relative importance of each contract deliverable or each part of the deliverable where appropriate.

In defining contract deliverables, it can often be important for the contract to reflect the fact that the deliverables may need to be amended over the life of the contract to take account of changing circumstances or requirements. This is particularly the case for many service contracts such as IT services.

In defining service deliverables care needs to be exercised to ensure that contractors do not provide services at a higher level than what is actually required in order to attract a higher level of payment. For example, failing to resolve a client inquiry by telephone because this attracts a lower payment and requiring the client to attend a face to face interview which attracts a higher payment.

Care needs to be exercised to ensure that contractors do not provide services at a higher level than what is actually required.