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A Statement of Work (SOW) is a project management document which describes the work that is required of an external contractor, vendor, or supplier. It can either be included within the contract documents or simply be a reference for the project management team.

Also called Terms of Reference, the more generic Statement of Work is used by the Project Management Body of Knowledge (PMBOK) to refer to the technical work description for a component of a project. (ProjectEngineer)

Therefore, a clear articulation and communication of what has to be done and delivered in response to a problem through a precise description of activities, outputs, and deliverables, is a prerequisite for potentials service providers to respond realistically and competitively to our requirements. This articulation and communication is known as Terms of Reference (TOR), or a Statement of Work (SOW). Adequate and clear TOR is imperative for an understanding of the assignment, which minimizes any risk of ambiguities during the preparation of solicitation documents, negotiations and execution of services.

The use of the terms TOR and SOW essentially refer to the same thing and serve the same purpose. For professional services contracts, it is more appropriate to use the term TOR as a common practice.

Terms of Reference (TOR) is a detailed description of services that a contractor is required to perform in execution of a contract. (United Nations Development Programme)

The documentation of a project's scope is called a scope statement or terms of reference. It explains the boundaries of the project, establishes responsibilities for each team member and sets up procedures for how completed work will be verified and approved.

A project scope statement is a written document that includes all the required information for producing the project deliverables. It is more detailed than a statement of work; it helps the project team remain focused and on task. (TechTarget)