FAQ: What’s the Difference Between a Budget Justification and a S.O.W.?

We’re coming up on another proposal preparation season, and probably the most common question we hear from other research administrators and investigators is this:

What’s the difference between a budget justification and a statement of work?

This question comes up in the context of preparing budgets for applications and subcontracts for collaborative applications, and it is confusing, because many people don’t write statements of work until they are finished with other parts of the application, and these documents seem similar. They really are very different.

A budget justification is a written description of the cost estimation methods used in preparing the budget. It is also used to establish the basis for fulfilling A21 guidelines (allowability, allocability, consistency and reasonableness). It explains WHY the cost exists for each item on the budget.

A statement of work is a written description of the activities, deliverables and timeline under which the work on a proposal will be completed. It specifies the details of that work, including the individuals involved, the standards and requirements the work product needs to meet and other details needed to evaluate the work. The statement of work explains WHAT the budget is paying for, and by WHEN.

With these two documents – an investigator can track research dollars to determine WHERE they are spent against research aims in order to sign invoices, produce progress reports and financial reports, request no-cost extensions and continue advancing scientific progress.

Fabulously written budget justifications and statements of work are an example of when pre-award work supports award management and post-award close out activity. When an award starts its life with superb documentation it can be managed well throughout.

1 thought on “FAQ: What’s the Difference Between a Budget Justification and a S.O.W.?”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s