Work Breakdown Structures
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1 D page 1 of 19 Long Description Title page for Module 2, Lesson 5: Program Management and Acquisition Concepts, containing three photos: two professionals consulting paperwork, a professional in an office, and a professional smiling.
2 Introduction Welcome to the lesson. There s an old saying that the longest journey begins with a single step. Sometimes when you are starting a big project, the scope can seem overwhelming. Whether the effort is large or small, your first step is to break the required work down into its component parts (discrete, manageable tasks). A Work Breakdown Structure (WBS) helps you do that. The WBS is key to many program management activities. We not only use it in planning the project or program, we use it to write our Statement of Work (SOW), develop our Independent Government Cost Estimate (IGCE), and track performance. You'll be introduced to the following concepts in this lesson: Types of (WBSs) Common types of WBS elements The role of a WBS in an acquisition program To print this lesson, select print. page 2 of 19
3 Learning Objectives Upon completion of this lesson, you will be able to: Identify the purpose of a Work Breakdown Structure (WBS) and its application throughout the acquisition process Differentiate between the two WBS types Identify responsibilities for the development and maintenance of each WBS type Identify the components of a Work Breakdown Structure page 3 of 19
4 What Is a Work Breakdown Structure? At the outset of a program, it s easy to become overwhelmed by the size, scope, and duration of such a complex effort. One way to get your mind around a large program or project is to break it down into chunks. Subdivide each task into progressively smaller subtasks. From one point of view, a $10 million program is just 200 interrelated $50,000 projects. We call those discrete, manageable subtasks "work packages." A WBS is a framework for organizing and managing the work involved in a project or program. Organization takes the form of work packages. Since a WBS defines and organizes all of a program s work packages, it defines the total scope of the program. A WBS is a comprehensive, outcome-oriented (rather than method-oriented) classification of project scope. Most WBSs graphically depict the relationships among the various work elements, taking on the form of a tree structure or hierarchy. Preparing and understanding the WBS for your program is a big step toward managing its inherent complexity. Let's take a look at an example. D Long Description page 4 of 19 Example WBS: Level 1: System Level 2: Management Process, Subsystem, Subsystem, Management Process Level 3: Two Components branching from the first Subsystem Component Level 4: Two Subcomponents branching from the first Component Work Breakdown Structure (WBS)
5 A product-oriented, hierarchical division tree of deliverable items and associated services that relates the elements of work to each other and to the end item. The WBS is developed by starting with the end objective required and successively subdividing it into manageable components in terms of size and complexity.
6 Example: Passenger Screening Program The WBS is a versatile tool. You can use a WBS to define the work required in a project or program to acquire a hardware system, software application, or services. Here s an example WBS from a fictional program to acquire a new passenger screening system for TSA. Notice the relationship between the different levels of the WBS. The WBS below has six levels. Select each level for more information. D Long Description page 5 of 19 The combined program and contract WBS organizational chart which consists of six levels broken into two parts. Levels 1 through 3 are the Project/Program while Levels 4 through 6 depict the Contract. The level components and their WBS numbers (in parenthesis) are: Level 1: Passenger Screening Program (1) Level 2: Program Management (1.1), Control Transmitter (1.2), Whole Body Imaging System (1.3), Integration (1.4), Training (1.5), Support Equipment (1.6) Level 3: Whole Body Imager (1.3.1), System Frame (1.3.2) Level 4: Hardware ( ), Software ( ) Level 5: Capability Block 1 ( ), Capability Block N ( ) Level 6: Design ( ), Develop ( ), Test & Eval ( ), Deploy ( ) Level 1 Level 1 represents the entire project or program.
7 Level 2 Level 2 represents the major subsystems or categories of services that the program was initiated to acquire. Notice that in addition to hardware subsystems, integration and project management are also part of the work required to develop the passenger screening system. Level 3 Level 3 represents the major components of the Level 2 elements. Notice that integration is broken down into work components just like a hardware element. Every level is a roll-up of the level below it. There is nothing on Level 3 that doesn\'t roll up to an element on Level 2. There is nothing in the program that isn\'t represented on Level 3. Level 4 Notice that every element is numbered using a consistent scheme. The numbering helps all parties who use the WBS consistently refer to elements and work packages. Level 5 A WBS can have as many levels as necessary to break down the work into manageable work packages. Level 6 A WBS can have as many levels as necessary to break down the work into manageable work packages. WBS Work Breakdown Structure TSA Transportation Security Administration
8 Knowledge Check A Work Breakdown Structure (WBS) defines the total scope of a project. True False Submit page 6 of 19 A WBS is a way to define and organize a project's discrete work elements in order to define the total scope of the project.
9 Recap: Introduction Review the key concepts addressed in this topic: The Work Breakdown Structure (WBS) is key to many program management activities, including planning the project or program, writing a Statement of Work (SOW), developing an Independent Government Cost Estimate (IGCE), and tracking performance. A WBS is a way to define and organize a project's discrete work elements in order to define the total scope of the project. Most WBSs graphically depict the relationships between various work elements. WBSs are a product of the project planning process. The next topic is Types of. page 7 of 19
10 Introduction to Types of WBSs There are two types of WBSs: Program and Contract. Both types share some common elements. You'll be introduced to the following concepts in this topic: Program and Contract WBSs How the two types are integrated Common types of elements they share page 8 of 19
11 Program and Contract WBSs T&D On large-scale programs (ex. acquiring a Coast Guard cutter), the program and contract WBS will both have up to six levels. Levels 4-6 of the program WBS would reflect a more detailed breakdown of the work that supports project management, cost accounting, and work execution. Some Earned Value Management Systems (EVMSs) require contractors to drill down to six levels to achieve the necessary granularity to effectively track the required work. Transcript and Long Description page 9 of 19 [the combined program and contract WBS organizational chart which consists of six levels broken into two parts. Levels 1 through 3 are the Project/Program while Levels 4 through 6 depict the Contract. The level components and their WBS numbers (in parenthesis) are: Level 1: Passenger Screening Program (1) Level 2: Program Management (1.1), Control Transmitter (1.2), Whole Body Imaging System (1.3), Integration (1.4), Training (1.5), Support Equipment (1.6) Level 3: Whole Body Imager (1.3.1), System Frame (1.3.2) Level 4: Hardware ( ), Software ( ) Level 5: Capability Block 1 ( ), Capability Block N ( ) Level 6: Design ( ), Develop ( ), Test & Eval ( ), Deploy ( )] Narrator: To illustrate the concepts of a program WBS and a contract WBS and demonstrate the relationship between the two, we\'ll revisit our example from the fictional passenger screening program.
12 [The top three levels of the organizational chart are highlighted.] Narrator: A program WBS comprises the top three levels of the combined WBS for a system acquisition. A program WBS depicts the components of the product and support structure that the Program Manager or PM will deliver to the user. Each program WBS is tailored to a specific program, and is prepared and maintained by the Government. [The first level components, then 2nd level components, then the 3rd level components are highlighted.] Narrator: Each level is a roll up of the levels below it; all the work elements that constitute a WBS component must appear in the next level down. If something is not in Level 3, for example, it s not in the program at all. [The top three levels are highlighted.] Narrator: A program WBS is provided to a contractor in a request for proposal or RFP and is the basis for the development of one or more contract WBSs. [The third level components are highlighted followed by the highlighting of the bottom three levels.] Narrator: A contract WBS starts with one or more elements from Level 3 of the program WBS and breaks them down into their component work packages. A contract WBS depicts the components that the contractor will deliver to the Government. Each contract WBS is tailored to a specific contract, and is prepared and maintained by the contractor. [Levels 4 through 6 are all highlighted, then just the Whole Body Imager component in Level 3.] Narrator: Depending on the program, multiple contract WBSs can be created from a single program WBS. Each contractor uses the numbering scheme from the program WBS in their contract WBS, starting with a numbered element from Level 3. [All six levels are highlighted.] Narrator: The total scope of the program is represented by the combination of the program WBS and all the contract WBSs it spawned. Each work package in this combined WBS is a discrete task of a contract that can be charged to a single organization. These work packages are the building blocks for contract management, cost estimating, and reporting. WBS Work Breakdown Structure
13 Types of Elements in a WBS There are two types of elements in a WBS: end product elements and enabling process elements. Here s our Passenger Screening WBS one more time. Both types of elements are represented in the diagram below. Select each type of element for more information. D The combination of end product elements and enabling process elements constitutes a complete WBS. A consistent numbering system is generally used to identify all elements, regardless of type. page 10 of 19 Long Description Passenger Screening WBS. The WBS consists of four levels. The level components and their WBS numbers (in parenthesis) are: Level 1: Passenger Screening Program (1) Level 2: Program Management (1.1), Control Transmitter (1.2), Whole Body Imaging System (1.3), Integration (1.4), Training (1.5), Support Equipment (1.6) Level 3: Whole Body Imager (1.3.1), System Frame (1.3.2) Level 4: Hardware ( ), Software ( ) WBS 1.3 and its derivative components are labeled as End Product Elements. All others are labeled as Enabling Process Elements. Enabling Process Elements
14 Enabling process elements are vital supporting functions like integration, test and evaluation, training, as well as other supporting elements like facilities and spare parts. These elements are not necessarily hard deliverables, but they are required to properly design, develop, build, and support the system. End Product Elements End product elements are the concrete hardware and software products that will be delivered to the customer. WBS Work Breakdown Structure
15 --> Knowledge Check For each definition, select the appropriate term from the drop-down list provided. When you are finished, select Submit. The concrete hardware and software products that will be delivered to the customer End Product Element Defines the entire scope of a program, including all contracts and subprojects Combined WBS A framework for organizing and managing the work involved in a program Work Breakdown Structure (WBS) Vital supporting functions like integration, test and evaluation, and training Enabling Process Element The top three level; prepared and maintained by the Government Program WBS The WBS that breaks one or more Level 3 elements down into their component work packages Contract WBS Show my answer page 11 of 19 A program WBS comprises the top three levels and is prepared and maintained by the Government. A contract WBS is the WBS that breaks one or more Level 3 elements down into their component work packages. The combined WBS defines the entire scope of a program, including all contracts and subprojects. A Work Breakdown Structure (WBS) is a framework for organizing and managing the work involved in a program. An end product element is the concrete hardware and software products that will be delivered to the customer. An enabling process element provides vital supporting functions like integration, test and evaluation, and training.
16 Recap: Types of WBS Review the key concepts introduced in this topic: A program Work Breakdown Structure (WBS) is the top three levels of the WBS for a system acquisition, which depict the elements of the product/support structure that the PM will deliver to the user. A Program WBS is prepared and maintained by the Government. A contract WBS breaks down one or more elements from Level 3 of the Program WBS into component work packages, depicting the elements of the product/support structure that the contractor will deliver to the Government. A Contract WBS is prepared and maintained by the contractor, and can extend down to whatever level is necessary for the program. The combination of a program WBS and one or more contract WBSs represents the total scope of the program. There are two types of elements in a WBS: end product elements and enabling process elements. The next topic is Using a WBS. page 12 of 19
17 Introduction to Using a WBS The WBS is key to many program management activities. Not only will you use it in planning a project or program, you will also use it to write SOWs, develop cost estimates, and track contractor performance. In this topic, you will be introduced to the following: How a WBS and a contractor's organizational structure form a matrix for cost control purposes How a WBS is used in various facets of integrated program management page 13 of 19 WBS Work Breakdown Structure
18 The Importance of the WBS The WBS is key to many program management activities. We not only use it in planning the project or program, we use it to write our SOWs, develop our ICGEs, and track performance against our baseline using Earned Value Management (EVM). D Long Description page 14 of 19 Graphic titled "The Importance of the WBS: Defines scope and is central to integrated Program Management..." that illustrates WBS playing a central role in Schedule Management, Procurement Management, Risk Management, and Cost Management. Scope Management The WBS defines the total scope of the program. If it\'s not in the WBS, it\'s not in scope. Procurement Management The WBS feeds contract development, Requests for Proposals (RFPs), SOWs, etc. Once the contracts are awarded, progress is tracked against the work packages defined in the WBS.
19 Cost Management The WBS is the basis for the IGCE and the PMO\'s Life Cycle Cost Estimate (LCCE). EVM reporting (based on the work packages defined in the WBS) is used to track cost objectives after contract award. Risk Management Both the Government and the contractor use the WBS to manage risks (allocation of resources to at-risk work packages, for example), and regular EVM reporting (based on the work packages defined in the WBS) is used to track progress and identify issues after contract award. Schedule Management The WBS is used to create the Integrated Master Schedule (IMS). EVM reporting (based on the work packages defined in the WBS) is used to track schedule objectives after contract award. WBS Work Breakdown Structure Earned Value Management A project performance-measurement technique that effectively integrates the contract s scope of work with schedule and cost elements at the appropriate level for optimum project and program planning and control.
20 Cost Control and Work Packages A program's WBS and a contractor s Organizational Breakdown Structure (OBS) form a matrix that intersects at control (or cost) accounts and work packages. Select each element of the diagram below to learn more. D Long Description page 15 of 19 This is a diagram of a WBS Cost Control Matrix. The WBS is laid out across the top (not down to the work package level). The contractor\'s OBS is laid out down the left. The two intersect in the middle to form cost/control accounts at the WBS level at which the Government and the contractor agree to track cost, which have a one-to-many relationship with work packages (the elements on the lowest level of the WBS). Work Breakdown Structure (WBS) A WBS Cost Control Matrix is formed at the intersection of the WBS, which breaks down all the work in the program, and the contractor s OBS.
21 Organizational Breakdown Structure (OBS) A WBS Cost Control Matrix is formed at the intersection of the WBS and the contractor s OBS, which is a hierarchical diagram of the organization and organizational units that will be doing the work. Cost/Control Accounts Cost accounts, also called control accounts, are management control points where work effort (or scope), cost, and schedule are integrated to form the basis for EVM. Cost accounts correspond to the elements on the lowest level of the WBS at which the Government and the contractor will track costs. This is frequently not the lowest level of the WBS. One cost account corresponds to one-to-many work packages. The Relationship Between Cost/Control Accounts and Work Packages This relationship is the foundation for the contractor s management of the development and delivery of the product. The contractor will use the work packages to develop schedules; detailed cost estimates using the bottom-up, or engineering, cost estimating method; and the contractor s budget. This information will in turn be used for EVM once the contractor begins executing the program and completing work packages (earning value) associated with cost/control accounts. Work Package Work packages are the elements on the lowest level of the Contract WBS. For cost management purposes, a work package consists of a discrete task or tasks that describe the work to be performed by a specific person or group of people, and results in a definable output or outcome. Each work package is associated with one (and only one) cost/control account. Work packages are the point at which cost and schedule for the work can be estimated. WBS Work Breakdown Structure
22 Everyone Uses the WBS You ve already learned that a WBS completely defines the scope of a program by decomposing the work into manageable packages, all of which are consistently numbered and easily traceable to the overall program goal or objective. In fact, everyone involved in managing and executing the program benefits from and uses the WBS in some way the program manager, Subject Matter Experts (SMEs) and other members of the Program Management Office (PMO), the contractor, etc. The WBS will be used throughout the acquisition life cycle framework to plan, manage, and execute the program and its projects. Select each tab for additional information. Government Program/Project Managers SMEs Contractor Program/Project Managers Government Program/Project Managers use WBSs to: Plan and manage programs Develop acquisition strategies Build Integrated Master Schedules (IMSs) Track program/contract progress Support work activities Manage risk throughout the life cycle A WBS enables a PM to identify risk areas and allocate resources where they re needed, when they re needed. page 16 of 19 WBS Work Breakdown Structure PM Program Manager Government Program/Project Managers Government Program/Project Managers use WBSs to: Plan and manage programs Develop acquisition strategies Build Integrated Master Schedules (IMSs) Track program/contract progress Support work activities
23 Manage risk throughout the life cycle A WBS enables a PM to identify risk areas and allocate resources where they re needed, when they re needed. SMEs Subject Matter Experts (SMEs) in the PMO use WBSs to: Help the PM make program management decisions by highlighting tradeoff opportunities Estimate costs and budget appropriately Plan the program s logistics support strategy Plan the systems engineering approach, develop technical plans, and execute the Systems Engineering Life Cycle (SELC) Develop and manage contracts Analyze issues and report project status Identify and manage technical risks across the functional areas of the program Contractor Program/Project Managers Contractor PMs use WBSs to: Plan and manage programs and projects Estimate costs Establish schedules Allocate resources in support of work packages Track and report progress Identify the path for charging against work packages
24 Knowledge Check What level of the WBS contains the work packages? The bottom level of the Contract WBS The third level of the Contract WBS The bottom level of the Program WBS The third level of the Program WBS Submit page 17 of 19 WBS Work Breakdown Structure The bottom level of a Contract WBS contains all the work packages for the contract.
25 Knowledge Check True or false: Control accounts are always identified on the bottom level of a Contract WBS. True False Submit page 18 of 19 WBS Work Breakdown Structure Control accounts are identified at the lowest level of the WBS at which the Government and the contractor agree to track cost, which is typically not the bottom level of the Contract WBS.
26 Lesson Summary Review the key concepts introduced in this lesson. A work breakdown structure (WBS) is a way to define and organize a project's discrete work elements in order to define the total scope of the project. Most WBSs graphically depict the relationships between various work elements. WBSs are a product of the project planning process, and can be used for services acquisitions as well as systems acquisitions. Types of WBSs A program WBS is the top three levels of the WBS for a system acquisition, which depict the elements of the product/support structure that the PM will deliver to the user. A Program WBS is prepared and maintained by the Government. A contract WBS breaks down one or more elements from Level 3 of the Program WBS into component work packages, depicting the elements of the product/support structure that the contractor will deliver to the Government. A Contract WBS is prepared and maintained by the contractor, and can extend down to whatever level is necessary for the program. The combination of a program WBS and one or more contract WBSs represents the total scope of the program. Using a WBS The WBS is key to many program management activities. We not only use it in planning the project or program, we use it to write our Statement of Work (SOW), develop our Independent Government Cost Estimate (IGCE), and track performance against our baseline using Earned Value Management (EVM). The contract WBS and the contractor s Organizational Breakdown Structure (OBS) form a matrix that intersects at control or cost accounts and work packages. This relationship is the foundation for the contractor s management of the development and delivery of the product. The contractor will use the work packages to develop schedules; detailed cost estimates using the bottom-up, or engineering, cost estimating method; and the contractor s budget. This information will in turn be used for EVM once the contractor begins executing the program. You have reached the end of. To continue, select the next lesson from the Table of Contents. To print this lesson, select print. page 19 of 19
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