Work breakdown structure (WBS) rules and the WBS dictionary
A work breakdown structure breaks the end product into smaller elements suitable for management control, down to work packages at the lowest level. GAO's best practice is a product-oriented WBS in which the children of each element add up to exactly the parent.
What a WBS is
GAO describes the WBS as the cornerstone of every program: it defines the work needed to meet the program's objectives and gives a framework for estimating costs, building the schedule, identifying resources and finding risks. Its lowest level is the work package. It starts when the program is set up and becomes more detailed as more is known.
The number of levels depends on the program's complexity and risk, and GAO says each WBS should have at least three levels.
The rules
Organise the WBS by products or deliverables, not by function or trade. If a house WBS is organised by carpenters instead of framing, an overrun cannot be traced to the part of the building that caused it. Functional work such as design engineering or quality assurance belongs inside the product elements.
The sum of a parent's children must equal the parent, so each element is defined and related to only one work effort. A site survey counted under two children breaks the rule; it belongs in one of them.
Every WBS includes program management as a level 2 element, alongside common elements such as systems engineering, integration and test. Leaving them out hides real effort.
GAO's schedule guide says there should be only one WBS per program, used by both the cost estimate and the schedule, so actual costs can be fed back into the estimate. A supplier may extend one element into its own contract WBS at lower levels.
The WBS dictionary
The WBS dictionary describes in brief narrative what work is done in each element. It defines each element's scope, and so the scope of the related schedule activities, and clarifies the boundaries between elements. When two managers disagree about whose element includes some work, the dictionary should settle it.
Where the exam catches people
Believing a WBS can be organised by department or trade: GAO's best practice is product-oriented, by deliverable.
Believing children may add up to more than their parent: the sum of a parent's children must equal the parent.
Believing project management effort sits outside the WBS: program management is a level 2 element in every WBS.
Believing cost and schedule can each keep their own WBS: there should be one WBS for both.
Believing every WBS should have the same depth: the number of levels depends on complexity and risk.