Department of Defense Risk, Issue, and Opportunity Management Guide for Defense Acquisition Programs

Risk management is an endeavor that begins with requirements formulation and assessment, includes the planning and conducting of a technical risk reduction phase if needed, and strongly influences the structure of the development and test activities. Active risk management requires investment based on identification of where to best deploy scarce resources for the greatest impact on the program’s risk profile. PMs and staff should shape and control risk, not just observe progress and react to risks that are realized. Anticipating possible adverse events, evaluating probabilities of occurrence, understanding cost and schedule impacts, and deciding to take cost effective steps ahead of time to limit their impact if they occur is the essence of effective risk management. Risk management should occur throughout the lifecycle of the program and strategies should be adjusted as the risk profile changes.