Quantitative Risk Assessment and Management of National Defense Acquisition with a Game-Theoretic Security Risk Meter Tool

Abstract

Driven by the ever-increasing cost and complexity of Department of Defense (DoD) defensive weapons acquisitions and requirements as well as contracting and financial management challenges, risk assessment and management are an undeniably essential component of the defense acquisition process. Identifying and managing the vulnerabilities and threats that affect defense acquisition scientifically is critical to an efficient and cost-effective acquisition process. Failure to identify and manage these sources of risk has very real consequences ranging from schedule delays and cost overruns to project cancellation not only for U.S. but all modern nations. The Defense Acquisition Risk Meter (DARM) innovatively provides an indispensable tool for program managers, politicians and high-level decision makers, and tax payers who shoulder the burden. Using game theory and statistically-driven methodologies, DARM provides an objective, quantitative risk assessment, and unlike any other tool, a guidance for allocating and managing resources for risk mitigation. Defense Acquisition Risk from vulnerabilities, threats and countermeasures is quantified using a game-theoretic Security Risk Meter tool leading to optimally and cost-effectively manage the risk.