KBR

INFRASTRUCTURE AMERICAS
CONTROLS MANAGEMENT SYSTEM

WORK BREAKDOWN STRUCTURE DEVELOPMENT

WM-AM-INF-PC-030

REV

DATE

PURPOSE OF ISSUE

AUTHOR

SPONSOR

15-MAR-04

INITIAL ISSUE

D. W. DOUGLAS

H. M. MOORE

DESCRIPTION OF CHANGE: INITIAL ISSUE

PROPRIETARY INFORMATION
This document contains proprietary information belonging to
KBR. It may neither be wholly or partially
reproduced nor be disclosed without the prior
written permission of KBR.

CONTENTS
1.0

SCOPE

2.0

PHILOSOPHY AND APPROACH

3.0

2.1

WBS PURPOSE AND FUNCTION

2.2

WBS OBJECTIVES

2.3

WBS LEVELS

2.4

WBS CHARACTERISTICS

2.5

DEVELOPMENT FLOW AND OWNERSHIP

COMPONENTS
3.1

ESTABLISHING THE PROJECT WBS REQUIREMENTS

3.2

PROGRESSABLE VS NON-PROGRESSABLE

3.3

SPECIAL CONSIDERATIONS IN WBS CREATION

4.0

WBS LEVEL DETAILS

5.0

WBS EXAMPLE

6.0

WBS DEVELOPMENT PROCEDURE

7.0

6.1

PROPOSAL

6.2

PROJECT

SUMMARY

ATTACHMENTS
1.0

WORK BREAKDOWN STRUCTURE CHART

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1.0

SCOPE

This work method defines the Project Controls department's philosophy, and provides
guidelines for developing the project-specific Work Breakdown Structure (WBS). It is the
recommended guideline for the development of Work Breakdown Structures. It is
applicable to all Infrastructure Americas Business Unit projects, regardless of project
type or scope.
The WBS is perhaps the most important determinant of project controls information that
is available to management during the course of the project. The more detailed the
WBS, the more effort required to maintain the data. The less detailed the WBS, the less
information that is available for analysis and decision making.
2.0

PHILOSOPHY AND APPROACH

2.1

WBS PURPOSE AND FUNCTION

The Work Breakdown Structure provides a common structure for the coordination of all
controls functions.
To effectively manage a project, the work must be divided into well-defined,
manageable components at successively greater levels of detail. At each of these
levels, responsibility is assigned for the execution and management of the component.
A WBS is a systematic and progressive subdivision of work to a level of detail sufficient
for quantification and proper execution management, in accordance with contractual
terms, financial considerations and time phasing constraints. Its multi-tiered framework
subdivides activities of work into progressively more detail.
The WBS is important because it defines how a projects costs are budgeted,
accumulated and forecasted using KBR systems. Work scope subdivision continues
until all of the work is quantified and responsibility assigned.
2.2

WBS OBJECTIVES

When properly defined and organized, the WBS accomplishes the following objectives.
All of these objectives may not apply to every project.

Its organized into manageable elements that have a defined scope so that each
element can be estimated, scheduled and progress - measured.

Assign responsibility for the above elements to an individual or a team.

Constructability driven. Guided by the end product, which is usually the ultimate
installation of the project.

Displays the level at which the project activity items will be scheduled and
progressed (Item level of the WBS).

Displays the level at which the project's quantities and work hours are tracked
(Work Package level of the WBS) if approiate.
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Displays the level at which costs are tracked (Control Package level).

The WBS should have enough detail to allow project personnel to manage the job, but
should not be so detailed that maintaining budgets, costs and status leaves little or no
time for analysis. With too much detail, project personnel may end up maintaining the
system at the expense of analysis and trend identification. On the other hand, without
enough detail, the analysis effort may be limited, which would make the cause of
adverse trends difficult to determine.
The WBS should be developed immediately upon project initiation. Modifications to the
WBS after development and during project execution are to be avoided because of the
impact on established controls systems.
The Work Package level is typically the lowest level common to both Engineering and
Construction. Work is detailed below the Work Package level and characteristically:

2.3

Results in identification of a measurable amount of work

Defines the functional group responsible for performing the work.

Can be scheduled (has definite start and completion dates).

Can be budgeted.
WBS LEVELS

A WBS is separated into different levels to accommodate the subdivision of work.

These levels may include:
Total Project
Area
Control Package
Work / Drawing Package
Detail
The following is a brief discussion of each of these levels. Each will be discussed in
detail in Section 4.0, WBS Level Details, of this document.
Total Project
This represents the total of all the other WBS elements and is not given a level number.
Areas
Areas are usually defined by physical divisions stated within the contract or dictated by
installation requirements.
Control Package
Areas subdivided by responsibility are called Control Packages. The highest level at
which scope and responsibility are combined is the Control Package level.
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Work Package / Drawing

A Control Package is further divided into deliverables. These deliverables can be
subcontracts, services, documents, or installation quantities. These deliverables are
called Work Packages.
Detail (Item Level)
To accommodate the projects ability to manage the work scope the Work Package is
further divided into smaller units. These units are called the detail or Item level.
2.4

WBS CHARACTERISTICS

The Work Breakdown Structure should incorporate the followings qualities:

2.5

Early identification and development of the WBS

Supports the project's progressing, reporting and analysis requirements

Supports historical data requirements (Final Job Reports and Capitalization etc.)

Participation by the Customer, KBRs Project Management, Engineering,

Construction, and Project Controls in the development of the WBS

Supportive of the Engineering, Construction and Financial work Plans

Clearly defined coding parameters between progressable and non-progressable

Clearly defined elements for project

DEVELOPMENT FLOW AND OWNERSHIP

This section illustrates an example of how the responsibilities of developing a WBS

change over the course of its growth. Each group comes into play at certain points of
the WBS development cycle. This is only an example. Each individual project will vary
depending upon what data is available at what time.
The WBS is developed over a period of time starting with the bidding phase of the
project and ending soon after project award. It would be nice to have all the documents
and requirements that affect the WBS available at the time of its initial creation but in
reality that rarely happens. Usually only parts of the requirements are available when
development is initiated, therefore the WBS will evolve over time.
Estimating is usually the first to start on the WBS development by virtue of going
through the bid documents and establishing the bid estimate according to those
documents. Physical divisions are established which usually evolve into the WBS Areas.
Thus estimating becomes the temporary owner of the WBS.
As other control functions, Scheduling and Cost, become involved each contributes to
its development based on their requirements.
Most projects require some type of high level schedule submitted with the bid.
Scheduling works with estimating to help verify the physical (areas) divisions of the
project and may start to break these divisions down to more detailed components. Cost
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looks at the preliminary WBS being utilized by estimating and scheduling and
determines if the structure will be sufficient to control the project if awarded to KBR.
Any adjustments are made accordingly.
Depending upon the complexity of the project the other groups (Project Management,
Engineering Management, Finance & Administration, and Construction Management)
may or may not have input to the WBS before the project is bid. In most cases their
input will be after project award and before project start.
At this stage of development the WBS is preliminary and is owned by the Manager of
Controls for Infrastructure Americas.
Upon contract award, work on the WBS shifts to the Infrastructure Americas Cost
Manager who is responsible for verifying that all requirements from the various groups
have been met. The preliminary WBS should now be reviewed by Construction
Management, Project Management, Engineering Management and Finance &
Administration for any changes or modifications necessary to accomplish their needs.
Any new project documents such as the Contract or original budget must be considered
in finalizing the WBS. When this review is finished and any adjustments are made the
WBS becomes the final WBS for the project. The WBS then becomes a component of
the overall Project Controls Execution Plan.
Once the project starts the ownership and maintenance of the WBS shifts to the project
Cost Specialist, or designee. Supervisory responsibilities still remain with the Manager
of Controls for Infrastructure Americas.
3.0

COMPONENTS

3.1

ESTABLISHING THE PROJECT WBS REQUIREMENTS

Developing the WBS is a project team endeavor and requires participation from the
following groups:

Customer / Contract

Construction Management

Estimating

Scheduling

Cost

Engineering

Infrastructures Americas Project Management

Finance & Administration

Each participant needs to know the project requirements and understand the reasoning
behind the final product.

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Customer / Contract
Customer and or Contract requirements influence the WBS, usually by specifying
required areas or project configurations. For accounting and tax purposes, Customers
often require that actual costs be gathered by specific divisions of the facility being built.
If a Contract exists at the time of WBS development it should be carefully scrutinized for
information on how cost will be collected and presented to the Customer. However
caution should be used when using the WBS to collect actual cost for tax or accounting
purposes. This can sometimes be accomplished by other means (installed quantities,
subcontract costs) that are a lot less burdensome for the project and just as accurate.
Contract documents may not always be available at the time the WBS is created. In
this case use Pre-award / Proposal documents to help construct the WBS.
Construction Management
Construction requirements have the most influence on the WBS. There are two basic
Construction requirements:
1. Construction Sequence this dictates the order in which Engineering drawings
and other deliverables are needed.
2. Construction Work Progressing Method this requires that quantities be
identified from engineering drawings by Work Package.
Engineering drawings must be produced in support of the WBS schedule areas. In
cases where specific drawings must cross multiple schedule areas, Engineering must
indicate the schedule areas on the drawing. Multiple area drawings require careful
attention to area definition, or they can result in quantities being identified to the wrong
construction Work Package.
The standard is for the work package level to be the same for Engineering and
Construction. To accomplish this, the Infrastructure Americas standard is for the WBS
to be common through the work package level for both Engineering and Construction.
See Attachment 1.0.
Estimating
Every effort should be made to involve Estimating in the creation of the WBS before the
estimate process is started to eliminate the need for a recast of the project estimate.
This allows Estimating to define the estimate in such a manor as to comply with the
WBS and eliminate incompatibilities between the WBS and estimating software
requirements or output.
Scheduling
The WBS and Schedule should be defined to match at each level. These levels must
ensure that project progressing and reporting requirements are met.

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Cost
The WBS defines how costs and revenue will be budgeted and collected and how the
details will be controlled and summarized. Once a Cost specialist, or designee, has
been assigned to the project the ownership of the WBS becomes their responsibility.
Engineering
Engineering requirements are usually met when the needs of Customer, Construction
and Project Management are satisfied. However, the Engineering organization may
require certain WBS structures to ensure accountability and control of the engineering
effort. See Attachment 1.0.
Infrastructures Americas Project Management
Corporate Project Management requires the project to be reported in clearly defined
and measurable parts.
Finance & Administration
Finance & Administrations affect on the WBS stems mainly from the terms of the
contract and the need for revenue breakdown. However, there may be certain
conditions that would dictate an administrative need for a specific WBS breakdown.
3.2

PROGRESSABLE VS NON-PROGRESSABLE

A project is composed of the following components:

Progressable / Direct Work Work which results in some sort of deliverable,

such as engineering design / erection drawings, specifications and studies, as
well as construction erection deliverables such as civil drawings and
specifications

Non-progressable / Indirect / Support Work This type of work is not directly

associated with a deliverable product. Examples include such items as
management, supervision and other support labor, as well as material / non-labor
costs.

The WBS is all-encompassing and includes all project elements related to the control of
costs. This includes progressable and non-progressable components of labor, nonlabor, material and subcontract requirements.
The utilization of standardized progressable / non-progressable components is essential
to the following:

Development and analysis of performance / productivity standards

Application of standard milestones and milestone progress within Engineering

Consistent labor coding and cost tracking

Development of historical data for proposals and estimates

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3.3

SPECIAL CONSIDERATIONS IN WBS CREATION

During project planning and setup, project personnel must give special consideration to
several items. These items are a portion of the total Project cost, and personnel must
evaluate the importance of isolating each of these kinds of costs considering the time
and effort involved.
When considering these items, remember that the Customer may have some
constraints that affect how these items are treated. It is important that the Customer
understand (1) the meaning and purpose of these items and (2) how these items will be
handled during the project. This section describes those special considerations and
recommends an approach for applying them to the project control system.
Engineering Field Assistance
Field assistance occurs when Engineering personnel are assigned to the field to handle
start-up, assist with late Customer modifications, and possibly assist with the
Construction drawings.
Field assistance requires discussion with project management and the Customer to
determine how to manage these monies. Will they be managed by Engineering or
Construction and in which WBS breakdown will they be included? The method of
progressing these activities should also be discussed.
Contingency
The affect of Contingency management on the WBS is an area that requires discussion
with project management and the Customer. The WBS should have proper elements to
capture and manage Contingency.
Customer Cost
Customers may request that the total cost reported include costs outside of KBR
control. The cost specialist must define these requirements early in the project to
incorporate them into the WBS. Such items may include Customer procured materials
or subcontracts.
Major Equipment and Bulk Materials Costs
Cost specialists should consider major equipment tag items and bulk materials when
setting up the WBS. Larger pieces of equipment may require a WBS breakdown to
facilitate their installation. Examples of such equipment might be large waste water
treatments plants or desalination plants. Bulk materials may require holding WBS
elements in order to capture cost to be distributed later in the project.
Conceptual Engineering Design or Pre-Construction
If preliminary Engineering, conceptual design services or Pre-Construction activities
have taken place and are required to be reported with the main project then allowances
in the WBS must be made to accommodate these activities. The project's contractual
and reporting requirements should be ing these WBSs.
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4.0

WBS LEVEL DETAILS

The project team is responsible for establishing the project WBS based on the
requirements established in the previous section (2.5). The basic construction
sequence and execution plan set the foundation for the overall project schedule, which
dictates the work package schedule. The project team should define the physical
divisions (areas) of the WBS and confirm that it is the same for both Engineering and
Construction.
Area Level
Areas are determined by drawing a geographic or physical division of the project that
meets Customer and overall Construction sequence requirements. Engineering usually
has at least one area for general engineering work that is not location-specific.
Engineering work performed under this generic, nonphysical area includes such
deliverables as construction specifications, installation details, bulk material
specifications, P&IDs, and other general items. This area is usually called the General
Progressable Area.
Construction usually will have an area to capture cost that are typically called
Overhead and Indirect costs. Items of this nature include such things as construction
equipment, supervision, fees, indirect supplies and other similar items.
There are typically between one and six areas. More areas can create a burdensome
level of detail. But in some cases more than one level of Area subdivision may be
appropriate. Care must be taken when dividing the project into Areas because they can
create lower levels of the WBS structure.
Control Package Level
The Control Package level is a breakdown of the work scope following a project code of
accounts. Examples of these codes of accounts are:

KBR disciplines/crafts

Construction Specifications Institute (CSI) divisions or equilvant

Or in the case of Engineering charge work numbers/resource code numbers

This level can be further divided into more Cost Areas if needed. Occasionally, there
may be a need to divide the total project into sub-areas at the Control Package. This
would create a new level between the Control Package and the Work Package level. A
Customer may request these divisions to facilitate summary reporting for a collection of
cost areas. This arrangement is easy to accommodate and does not change the
approach for determining cost areas or any lower level of the WBS.
Work Package Level
In most cases, cost areas contain too much work to be effectively scheduled and
managed as a total quantity of work. In this case, the cost area should be divided into
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smaller geographic or physical areas until the scope of work can be effectively defined,
planned and controlled.
Coordinating constructability with Engineering design is required for each Work
Package. The Work Package is the lowest level common to both the Engineering and
Construction WBSs. Work scope at this level must be quantifiable for both Engineering
and Construction. Engineering must agree to issue drawings at this level or make
arrangements with Construction to note schedule area boundaries on any drawing
covering more than one schedule area.
The standard number of Work Packages may be as few as one per cost area. However
the number of Work Packages should not be excessive as to affect the efficiency of the
Controls systems used for the project.
Detail Level
Engineering
The drawing / item package further subdivides Engineering work within a Work Package
into the various deliverables that the discipline produces, quantifies and progresses.
For example, Concrete may have packages for specifications, reinforcing, form work,
and/or materials.
Construction
For Construction, this Level is represented by the CPM schedule activity for the work to
be performed. Each Work Package level element must be represented at the Detail
level by at least one CPM activity, and can be subdivided into any number of activities,
as required by Construction to manage the work. For example Electrical may have
packages for under ground rough-in, above ground rough-in, pull wire, fixtures and/or
trim.
5.0

WBS EXAMPLE

A typical WBS (see Attachment 1.0) is a task-oriented tree of activities which

organizes, defines and graphically displays the total work to be accomplished. Each
descending level of the WBS (e.g. area, control package, work package, and detail)
represents an increasingly detailed definition of the project. The lowest level of the
WBS depicts the level of detail at which the project is scheduled (the detail level). In the
WBS shown in Attachment 1.0, for example, a Detail item would be "Install Activity 3,
Electrical Cable, in Work Package 4 of Control Package Electrical for Area 200." The
Control Package level, on the other hand, depicts the level of detail at which the project
costs are tracked. An example of this would be "All electrical work done in Control
Package 1 for Area 200."
Attachment 1.0 is only an example. The WBS for a specific project may differ
considerably from the example shown. A specific project may require more or less
levels in order to accomplish adequate control of the project.

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6.0

WBS DEVELOPMENT PROCEDURE

This section addresses the task of developing a WBS. There are enough differences in
the personnel involved, as well as the amount and quality of information available
before contract award as compared to after contract award to warrant a separate
discussion of each.
6.1

PROPOSAL BEFORE CONTRACT AWARD

Responsibility
Development of the WBS is a fluid process with contribution from available
management and controls personnel. A preliminary WBS is usually prepared by the
estimating group. Estimating will review the requirements and preliminary structure with
cost and scheduling as early as possible in order to anticipate project planning, coding,
tracking, and reporting.
Input Sources
The following documents can be important sources to guide the WBS development:

Request for Quotation/Request for Proposal from the Customer

Design/engineering drawings and/or project specifications

Scope of work/Statement of work descriptions

Proposal submitted to Customer

Letter of intent

Procedure
1. Following the guidelines for subdivision in Section 4.0, the total project is divided
into logical areas and then into the code of accounts. This represents the Area
level and the Control Package level.
2. The nature and extent of further subdivision into work packages will depend upon
the amount of information available.
3. Review, several times if necessary, as various contributors and end users are
available. A key concern is to identify what physical point, or process step,
makes the transition from one WBS area to the next so that all scope is included.
Output
An easy-to-read, preliminary WBS of core elements (typically shown in hierarchy and
graphic form) The customer for this deliverable is the Proposal Team.

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6.2

PROJECT AFTER PROJECT AWARD

Responsibility
With award of contract the Infrastructure Cost Manager assumes primary control of the
WBS. Cost control coordinates the broadest range of project oversight and must
ensure that the finalized WBS addresses all aspects of coding, tracking, and reporting.
Input Sources

Scope of Work

Proposal

Original Estimate

Contract

Design/engineering drawings and/or project specifications

Project Implementation Plan

Project Execution Plan

Project Reporting Requirements

Procedure
1. Review Section 3.1 to identify the project requirements that dictate the WBS.
2. Subdivide the scope of work through all levels. The WBS will now include finite
elements defining all aspects of the project.
3. Establish the coding structure and code values for project controls and
administration systems.
4. Submit for review and approval as discussed in Section 2.5.
5. Include the WBS in the Project Execution Plan.
6. Distribute the WBS structure to the project team.
7. Upon mobilization of the project assigned personnel, the project cost specialist
will load the WBS into the project cost system and support implementation in
other project systems as needed.
Output
An easy-to-read, comprehensive WBS of all work items (typically shown in hierarchy
and graphic form). The customer for this deliverable is the Project Team.

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7.0

SUMMARY

In summary, the WBS is the key element to capturing, tracking, and controlling a project
in a meaningful manner.
Careful consideration should be given when deciding level of detail because the finished
product (WBS) must be applied to each and every document representing an impact to
the cost and schedule. Once actual activities are underway, progress reported, and
costs expended, changing the coding structure is not recommended and virtually
counterproductive.
With that said, a strong commitment to the WBS structure is mandatory for the project
to be successful and requires that the Cost Specialist or designee be completely
dedicated to the usage and application of the finished product.

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