The Work Breakdown Structure (WBS) displays and defines the product to be developed or produced by hardware, software, support, and/or service element, and relates the work scope elements to each other and to the end product(s). The framework of the WBS defines all contractual authorized work. A WBS is developed during the proposal. If you are answering a U.S. government RFP(s) I suggest using MIL-STD-881 (latest revised version) as a guide, unless other direction is formally provided by the RFP and/or the contract.
After Contract award, the Project Manager expands the WBS into a Contract Work Breakdown Structure (CWBS) as the initial step in the planning process. WBS expansion will extend the CWBS a minimum of one level below the negotiated external reporting level. This sets up the framework for work scope definitions and assignments to the functional organizations responsible for performing the work. The extended CWBS shall include the levels at which required reporting information is summarized for submittal to the customer. One and only one CWBS exists for each contract.
This illustrates an example of Ordnance System WBS
The adequate number of levels of each CWBS leg extension is determined by the contractual work scope, the negotiated Cost Performance Report (CPR) or Cost/Schedule Status Report (C/SSR) reporting level, the Electronic Data Processing (EDP) System's capability coupled with the Project Manager's management style.
Design of the WBS - The WBS is normally designated as the first three levels of the extended CWBS. The WBS is used to report program status externally to the customer. The CWBS is used internally to plan the program in detail and to collect status information on a periodic bases.
The intent of WBS development is to keep performance measurement reporting requirements at a reasonable technical data information level using common sense. Once cost collection begins at a CWBS element, designated as a Task Plan (TP), that part of the WBS format becomes almost impossible to alter. This is due to the multiple collection points from which the actual cost expenditure data originates. It is important, for the individuals assigned the responsibility for development of the WBS and CWBS, to exercise a great amount of patience. This development proceeds back and forth in an iterative consultation pattern with the Project Management Office and the Functional Managers. Once the CWBS is cast, it is a dog of a job to undo.
The individuals assigned the responsibility for development of the WBS/CWBS should concentrate their efforts on properly designating the location of each segment of the contractual work statement. The use of the CWBS as an accounting function should be viewed as a secondary purpose. The intent is to prevent the use of the TECHNICAL STATUS of the program and/or contract as a "CPA Style" accounting system. Keep in mind, that the company has an accounting system to perform all of the proper accounting functions and record the details. The Performance Management System does not need to have or display all of the accounting details.
Basic Rules Governing WBS/CWBS Development
The reporting Level for the Cost Performance Report (CPR) is a negotiable item, and it is very high on the list of items to be negotiated with the customer during contract negotiations. The CPR reporting level is not necessarily at the same level within each WBS leg. For example, Prime Mission Equipment (PME) will normally be at level 3 while Data is at level 2.
- For Government Contracts, use MIL-STD-881 (latest revision) as a WBS design guide.
- There can be one and only one (1) WBS for the contract.
- The Customer, not the contractor, is the primary owner of the WBS.
- The CWBS is a natural extension of the WBS.
- The CWBS is a negotiated item during contract negotiations.
- Level three of the WBS is the normal reporting level of external contractual information.
- The reporting level for contractual information is a negotiated at the time of contract negotiation using the WBS format. Once negotiated, each reporting element should be clearly marked on the CWBS diagram.
- Once created the WBS will exist for the life of the contract.
- Only a formal contract change will effect a change in the WBS.
- When the customer directs the WBS change, the Project Management Office (PMO) makes the changes to the WBS documents (i.e., WBS/CWBS diagram, WBS Index, WBS Dictionary, WBS list, etc.).
- Once cost collection begins at a CWBS element, designated as a Task Plan, that part of the structure becomes almost impossible to alter. This is due to the multiple collection points from which the cost data originates. That is why everyone shall exercise a great deal of patience while the WBS and CWBS are being constructed. Once cast, the CWBS is a dog of a job to undo.
- The CWBS is a deliverable Contract Data Requirements List (CDRL) data item.
- The CWBS is not a "people" organization chart; it is a work scope chart.
- While the CWBS elements at the Task Plan level contain financial data, the CWBS is not the "official" book of accounting records for the contract. However, the Task Plan data contained within the CWBS framework shall be reconcilable to books of record.
- The resource charges into the CWBS must go directly into a single Task Plan element. The resource charges are not split between two or more Task Plan elements.
- The WBS/CWBS will serve multiple functions within the program. Design of the WBS/CWBS shall accommodate the requirements for Design To Cost (DTC), Life Cycle Cost (LCC), Engineering Bill(s) of Material (EBOM), Manufacturing Bill(s) of Material (MBOM), as well as the product structure of the end items, in one format. The hardware WBS segment will be system oriented during RDT&E (or Full Scale Development [FSD]) and MBOM oriented during Full Scale Production [FSP].
- Each subcontractor effort will be assigned to a single WBS element. Minor subcontractors (i.e., subcontractors with either little or no technical, schedule, and/or cost risk) may be grouped together under a single CWBS element, but they are to be singularly identified, tracked, and monitored, for performance measurement.
- All contract work, in terms of contract line items and contract end items plus other contractual references, is identified against the CWBS. This information is documented in the CWBS Dictionary.
Keep in mind; a request for reportable data below WBS level three does not improve the management of a project, either from within the facilities or from without. The degree of care exercised, by the PMO, in the proper extension of the work scope and project schedules into Task Plans, is what improves the quality of the reportable data. The CPR cost and preparation time, however, go up exponentially for each layer of detail added to the reporting requirement.
It is a false belief that if the project is cut up into little bitty pieces, some great invisible hand, called "control", comes into play from on high and manages the project itself. People determine if a project achieves its end goals, not a Management Information System. The theory that more management data equates to better management control has been proven false many times over in the last twenty years of performance measurement systems history.
A Customer Work Scope Tree - Project control eminates from how well the contractual work scope is defined. The greater the risk the more careful one shall be in defining the work scope. Time is the second unit of control. The more that each project function understands the true duration of the time it takes to go from step one to step two of the work scope the better the plan and the better the control. The third element comes into play when the resources to be used are identified by the managers which will execute the plan. Formal work scope definition and communication, proper timed elements tied to each work scope, and resource availability, is the correct order of planning. This planning will determine how well the project is managed and performance is measured.
The WBS is first and foremost a technical data gathering structure, deployed so that the achievement in technical progress can be measured and analyzed against a formal baseline plan. The WBS aids the customer in understanding the status of the project as time elaspes. The WBS aids the customer's customer in understanding the status of the project. All managers, internal and external need to use the planning and status information within the WBS structure to aide in the adjustment to the current program paths and for maximizing the attainment of short term and long term goals.
The individuals assigned the responsibility for WBS/CWBS development should never lose sight of the fact that the WBS is used for TECHNICAL PLANNING and STATUS ACHIEVEMENT. The individuals assigned the responsibility for development of the WBS/CWBS should not use the structure as an organization chart of people or as a detailed accounting system. A people organization chart (called the Organization Breakdown Structure (OBS) in this System Description) and a detail accounting system already exist and function very well for their intended purposes.
The time spent on defining and negotiating the final CWBS is essential to Project Management Office, and the customer. Internally, the Project Managers Office will never be able to spend enough time defining, and redefining the boundaries of the work scope; communicating, communicating and recommunicating the boundaries of the work scope; and setting and resetting the time scales for accomplishment of the detail work scopes.
The work involved in establishing the project WBS/CWBS may be substantial, it will be iterative, but it must not be avoided or delayed because valid performance measurement operation depends on it. As a minimum requirement the WBS should be developed during the proposal phase of the contract and the completion of the CWBS should be accomplished as soon as possible after contract award.
The CWBS will no doubt change multiple times during it's development as the work scope details get further and further defined and the time scale for accomplishing the work scopes become better and better defined. When Task Plans begin to take shape, the boundaries set for the Task Plans will determine the CWBS depth. The CWBS will continue to evolve until the day of contract negotiation, and the technical content of the negotiated contract "freezes" the Statement of Work baseline. Every hour spent defining and redefining the CWBS will pay double dividends when the project gets underway. The more compact one can make the CWBS through correct interpretation of the work scope baseline, the easier the CWBS will be to live with throughout the life of the contract.