1. Risk Management Process (Revised)
Douglas Sankey, PMtec Inc.
Oct. 4, 2006

2. Major changes:
The number of risks will be reduced – only record risks ranked overall moderate or high (not low).
Identify risks at the work package or higher levels of the WBS – not at the activity level.
The levels used for determining the likelihood that a risk will occur have been raised.
The Table used to assess the consequence/impact of a risk has been simplified.
Risks will be reviewed and ranked jointly by the subsystem managers and the project office.

3. Outline Definitions Roles & Responsibilities Risk Management Process
Risk Assessment Methodology
Project Overall Risk Ratings
Risk Log
Overall Project Risk Profile
Status Tracking
Summary

4. Definitions & Operating Assumptions
A risk is a potential event with negative consequences.
Management of risk can often reduce the impact or avoid risk from occurring.
Risk management is a part of the EDM project management process.

5. Key Risk Roles and Responsibilities
Federal Project Director
Oversees project risk posture
Focus on high profile risks and those that threaten project baseline achievement
Laboratory Executive Management—risk awareness and ensure appropriate response
Project Manager
Manages the formal risk management process
Oversees R&D risks
Reviews and confirms risk evaluations, status, impacts, and outlook
Directs appropriate actions
Subsystem Managers—for their assigned WBS area
Identify and assess risk
Develop mitigation strategies with the Project Manager

6. Risk Management Process
Risk identification
By anyone on the project team, or other stakeholders
At the Work Package or higher level of the WBS.
Risk assessment
* Ratings assigned jointly by Subsystem Manager(s) & Project Manager
Risk strategy
* Project Office & Subsystem Manager(s) decide appropriate response
Risk response and mitigation
* By the person assigned by the Project Manager
Risk disposition, tracking, and reporting
* Project Office

7. RISK ASSESSMENT
Following risk identification, each risk is assessed for:
The Likelihood it will occur
The Impact to the project if it does occur
An overall risk rating is then determined.
Separate Tables are used for these purposes.

8. Risk Likelihood of Occurrence
Very Likely = risk is likely to occur with a probability >90%.
Likely = >50%
Unlikely = <50%

9. Table to Assess Risk Consequence/Impact
Marginal
Significant
Critical
Cost
Impact on project contingency is:
<$200K
$200-$500K
>$500K
Schedule
Impact on project schedule is:
All else
Level 1 or 2 Milestones
Impacts project completion date
Technical
Impact on project performance is:
Minor degradation
Significant degradation
CD-4 will not be met

10. Overall Risk Rating Determination
Likelihood of Occurrence
Impact/Consequence
Low
Medium
High
Very Likely
Medium risk
High risk
Likely
Low risk
Unlikely
Note: The EDM Risk Management Plan, Tables 6-2 and 6-3 provide parameters for determinations of Likelihood and Impact.

11. Overall Risk Ratings
High—require close monitoring and mitigation plan; may impact project baseline; highest uncertainty and priority
Moderate—may result in cost and schedule variances at or near acceptable thresholds; are monitored to prevent escalation
[Note: risks below moderate are not formally recorded; risk has no known impact.]

12. Risk Log – used to track Moderate & High risks.

13. Overall Project Risk Profile
Technical Risk:
Moderate/high
Schedule Risk:
Approaching moderate
Cost Risk:

14. Status Tracking Report and status risk at monthly project meeting
Quarterly review with DOE

15. Summary EDM risk management occurs throughout the project life cycle.
Engages the Project Manager, project team, the collaboration and DOE.
Utilizes many risk practices used on other DOE Office of Science projects.
Follows DOE risk management guidance.
Is tailored to fit the needs of the EDM Project.