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Unformatted text preview: re (CBS) that is supported in Modern Project in parallel to the WBS. But, in accordance with government terminology, the government version is called the WBS. In fact, it is not entirely a CBS but rather a hybrid cost, organizational, and product breakdown structure, as we explain a little later. Commercial usage of the term WBS, on the other hand, is as explained in Chapter 2. This difference in the meaning of the term WBS between commercial practice and government practice leads to many misunderstandings. As one might expect, project managers do not always stay put. Project managers often switch from the commercial sector to the government sector or vice versa. It is common for a project manager to gain experience in one sector and then switch to the other. These displaced project managers often do not understand that there is a big difference in the meaning of terms, and they try to continue operating under their own interpretations and in accordance with their past experience. It is remarkable, and possibly a credit to their flexibility, that such managers often go for years without understanding the differences themselves. Of course, they find it necessary to make modifications to their interpretation of terms along the way in order to survive. This leads to all sorts of mixed meanings of terms and private or perhaps "minor" project management philosophies. Because the commercial sector is so much larger than the government sector, and less rigid in management style, these minor approaches in the commercial sector tend to be ignored. Project managers in the commercial sector usually know they have to define their terms when they are communicating with other project managers or with project management staff. In the government sector, everything is supposed to be standardized, Page 217 and, as a result, private interpretations are often hidden. It is not common to ask government project managers to define their terms. In this arena one learns to figure out what is really going on, on a project, by observation, and one pays lip service to many of the government policies while practicing something else. Having issued all these warnings about how careful we must be in understanding how a term is being used, let us now try to examine what all the terms mean in the hierarchy of Figure 8 -1. 8.3— Government Project Management Vocabulary In Figure 8-1 there are two boxes (hierarchy elements) under the top box. One is the "Total Allocated Budget," commonly represented by the acronym TAB, and the other is the "Profit/ Fees." Together, the TAB plus the Profit or Fees constitute the "Contract Price.'' The TAB is the thing to be managed, the Profit or Fees often being linked to how well the TAB is managed. The TAB is further decomposed, as shown in Figure 8-1, into the "Performance Measurement Baseline," represented by the acronym PMB, and the "Management Reserve." A discussion of management reserve, often called contingency in the com...
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- Spring '10