RISK

MANAGEMENT

GUIDE FOR

DOD ACQUISITION

Sixth Edition

(Version 1.0)

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AUGUST, 2006

Department of Defense

Preface

The Department of Defense (DoD) recognizes that risk management is critical to acquisition program success (see the Defense Acquisition Guidebook (DAG), Section 11.4). The purpose of addressing risk on programs is to help ensure program cost, schedule, and performance objectives are achieved at every stage in the life cycle and to communicate to all stakeholders the process for uncovering, determining the scope of, and managing program uncertainties. Since risk can be associated with all aspects of a program, it is important to recognize that risk identification is part of the job of everyone and not just the program manager or systems engineer. That includes the test manager, financial manager, contracting officer, logistician, and every other team member.

The purpose of this guide is to assist DoD and contractor Program Managers (PMs), program offices and Integrated Product Teams (IPTs) in effectively managing program risks during the entire acquisition process, including sustainment. This guide contains baseline information and explanations for a well-structured risk management program. The management concepts and ideas presented here encourage the use of risk-based management practices and suggest a process to address program risks without prescribing specific methods or tools. (Note: this guide does not attempt to address the requirements of DoDI 5000.1 to prevent and manage Environment, Safety, and Occupational Health (ESOH) hazards. The reader should refer to MIL STD 882D, Standard Practice for System Safety, for guidance regarding ESOH hazards).

Since this is a guide, the information presented within is not mandatory to follow, but PMs are encouraged to