||DAU RMG 5th: Risk Management Guide for DoD Acquisition
In 1996, the USD (AT&L) established a Risk Management Working Group
composed of members of the Office of the Secretary of Defense (OSD) staff,
representatives of the Military Services, and members of other DoD agencies
involved in systems acquisition. This group reviewed pertinent DoD directives
(DoDD) and regulations, examined how the Services managed risk, studied
various examples of risk management by industry, and looked at DoD training
and education activity in risk management. Other sources of information were
the Software Engineering Institute Risk Initiative, the Open Systems
Initiative, and the safety and cost estimating communities. The findings and
results of the Working Group investigation were presented to the USD
(AT&L) and are summarized below:
Working Group members then wrote the risk management portions of the
Defense Acquisition Deskbook. The Defense Acquisition
Deskbook (sometimes referred to as the “Legacy” Deskbook) is
accessible from the AT&L Knowledge Sharing System (AKSS) Website (http://deskbook.dau.mil/jsp/default.jsp).
Focus of efforts is to get a product to market at a competitive
Industry has have either a structured or informal Risk Management
Evolutionary approaches help avoid or minimize risk.
Most approaches employ risk avoidance, early planning, continuous
assessment, and problemsolving techniques.
Structured approaches, when they exist, are similar to DoD’s
approach to Risk Management.
The Working Group concluded that industry has no magic formula for
The Military Services
The Services differ in their approaches to Risk Management.
Each approach has its strengths but no one approach is
Consolidation of the strengths of each approach could foster better
Risk Management in DoD.
The Working Group recommended that the Defense Acquisition
Deskbook contain a set of guidelines for sound risk management
practices, and further, that it contain a set of risk management
definitions that are comprehensive and useful by all the
The risk management policy contained in DoDD 5000.1 is not
The Working Group recommended that DoDD 5000.1 be amended to
include a more comprehensive set of risk management policies that
The relationship between the Cost As an Independent Variable (CAIV)
concept and Risk Management.
Requirement that risk management be prospective (forward looking).
Establishment of risk management as a primary management technique
to be used by Program Managers (PMs).
Risk Management procedures in DoD 5000.2-R (Note: Later changed to
Interim Defense Acquisition Guidebook) are inadequate to fully
implement the risk management policy contained in DoDD 5000.1.
Procedures are lacking regarding:
– Scope of Risk Management
Some key procedures may have been lost in transition the DoD
5000.2-R, and need to be expanded upon in the Defense Acquisition
Purpose of Risk Management
– Role of Milestone Decision
– Risk Management's support of
– Risk assessment during early acquisition
DoD Risk Management Training
Risk management training for the DoD Acquisition Corps needs to be
updated and expanded, and Integrated Product Team (IPT) and Overarching
IPT (OIPT) personnel need to be educated on the new and expanding role
of risk management in DoD systems acquisition.
Risk Management knowledge level needs improvement.
Education is a key to obtaining the support of OIPTs and PMs. The
Defense Acquisition University (DAU) needs to include Risk Management
training in all functional courses and develop a dedicated risk
management course for acquisition corps
||The DoD 5000 policy documents
referred to in the 1996 Report have since been superseded by a new set
of DoD 5000 policy and guidance documents issued in 2002–2003 time
The recommendations of the Risk Management Working Group have been
fully implemented over the period 1996-2003. The Risk Management part of the
Defense Acquisition Deskbook and material in the Risk Focus Area of
the Program Management Community of Practice (PMCoP) (http://www.pmcop.dau.mil)
form the basis for this Guide. The goal of the Risk Management
Guide is to provide acquisition professionals and program management
offices with a practical reference for dealing with system acquisition risks.
It has also been designed to be used as an aid in DAU course offerings.
This Guide reflects the efforts of many people. Mr. Mark Schaeffer,
former Deputy Director, Systems Engineering, who chaired the initial Risk
Management Working Group, and Mr. Mike Zsak and Mr. Tom Parry, formerly from
the AT&L Systems Engineering Support Office, were the original driving
forces behind the risk management initiative. LtCol John Driessnack, USAF,
from the DAU/DSMC faculty; Mr. Greg Caruth, Ms. Debbie Gonzalez, and Ms.
Frances Battle from the DAU Press; and Ms. Patricia Bartlett from Bartlett
Communications guided the composition of the Guide. Assistance was
also provided by Mr. Jeff Turner of the DAU Publications Distribution Center.
Special recognition goes to the Institute for Defense Analyses team composed
of Mr. Louis Simpleman, Mr. Ken Evans, Mr. Jim Lloyd, Mr. Gerald Pike, and Mr.
Richard Roemer, who compiled the data and wrote major portions of the text.
Also special thanks to Ms. Margaret Adcock for her detailed comments and
support, and to Dr. Edmund Conrow for his suggestions and recommendations that
have vastly improved the Guide.
DAU Center for Program Management
William W. Bahnmaier