Accession Number : ADP002754

Title :   Managing Program Risk: One Way to Reduce Cost Growth,


Personal Author(s) : Cooper,L.

Report Date : 1984

Pagination or Media Count : 4

Abstract : Former Deputy Secretary of Defense, Frank C. Carlucci, in his 30 April 1981 memorandum on 'Improving the Acquisition Process' reorganized that the key to reducing program costs is to establish and maintain a stable program. One of his initiatives requires the Services to 'budget to most likely or expected costs, including predictable cost increases due to risk'; and to 'provide incentives for acquisition officers and industry to make and use realistic cost estimates.' This paper focuses on how the program manager can reduce cost growth through a Risk Management Program that provides a more complete assessment of program risks. The essential elements of a risk management program, a proposed approach to implementing the program, and the advantages associated with successful implementation on major weapon sysystems acquisitions are outlined. In summary, OSD has demonstrated a commitment to reducing cost growth. Success, however, will require the program managers to establish a risk management program that forces consideration of all program risks before they occur.

Descriptors :   *Government procurement, *Management planning and control, *Decision making, Risk, Cost effectiveness, Weapon systems, Military budgets, Cost estimates, Officer personnel, Military requirements, Contract administration, Economic impact, Symposia

Distribution Statement : APPROVED FOR PUBLIC RELEASE