2.4 RISK DISCUSSION
Implicit in the definition of risk is the concept that risks are future
events , i.e., potential problems, and that there is uncertainty associated
with the program if these risk events occur. Therefore, there is a need to
determine, as much as possible, the probability of a risk event occurring and
to estimate the consequence/impact if it occurs. The combination of these two
factors determines the level of risk. For example, an event with a low
probability of occurring, yet with severe consequences/impacts, may be a
candidate for handling. Conversely, an event with a high probability of
happening, but the consequences/impacts of which do not affect a program, may
be acceptable and require no handling.
To reduce uncertainty and apply the definition of risk to acquisition
programs, PMs must be familiar with the types of acquisition risks, understand
risk terminology, and know how to measure risk. These topics are addressed in
the next several sections.