Risk Management Toolkit

Process Assets

Standard Process

Definitions:
Impact/Severity

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    Policy

  • AF Policy Directive 90-9: Operational Risk Management, 1 April 2000
  • AFI 90-901: Operational Risk Management, 1 April 2000
  • AFMC Instruction 90-902: Operational Risk Management, Dec 2007

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  • Cost Risk and Uncertainty - Chapter 14, GAO Cost Estimating and Assessment Guide, Mar 09

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    Acquisition Risk Management Impact

    • Critical (C) - An event that, if it occurred, would cause program failure (inability to achieve minimum acceptable requirements).

    • Serious (S) - An event that, if it occurred, would cause major cost and schedule increases. Secondary requirements may not be achieved.

    • Moderate (Mo) - An event that, if it occurred, would cause moderate cost and schedule increases, but important requirements would still be met.

    • Minor (Mi) - An event that, if it occurred, would cause only a small cost and schedule increase. Requirements would still be achieved.

    • Negligible (N) - An event that, if it occurred, would have no effect on program.

    Reference: Risk Matrix User's Guide, Version 2.2, by Pamela E. Engert and Zachary F. Lansdowne, Mitre Document MP99B0000029, November 1999, The MITRE Corporation

    Operational Risk Management Severity

    • Catastrophic - Complete mission failure, death, or loss of system.

    • Critical - Major mission degradation, severe injury, occupational illness or major system damage.

    • Moderate - Minor mission degradation, injury, minor occupational illness, or minor system damage.

    • Negligible - Less than minor mission degradation, injury, occupational illness, or minor system damage.

    Reference: Pocket Guide to Operational Risk Management

    Other Impact Definitions

    Rating   Definition   Equivalent Numerical Value
    Severe:   An event whose occurrence will impact the project's cost (and/or schedule) so severely that the project will be terminated.   1

    High:   An event that, if it occurs, will cause significant cost (and/or schedule) increases (e.g., increases of more than 5 percent) on the project.   Defaults: 0.65, 0.83, 0.95
    Range: 0.65 < Allowable Value < 1

    Moderate:   An event that, if it occurs, will cause noticeable cost (and/or schedule) increases (e.g., increases of not more than 5 percent) on the project.   Defaults: 0.35, 0.50, 0.60
    Range: 0.35 < Allowable Value < 0.65

    Low:   An event that, if it occurs, will cause small cost (and/or schedule) increases that, in most cases, can be absorbed by the project.   Defaults: 0.05, 0.18, 0.30
    Range: 0 < Allowable Value < 0.35

    None:   An event that, if it occurs, will cause no impact to cost (and/or schedule) of the project.   0

    Reference: Garvey, Paul R., "Implementing a Risk Management Process for a Large Scale Information System Upgrade - A Case Study", INCOSE Insight, May 2001, p.5.



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