Capability-based systems acquisition depends upon a realistic assessment of the political, military, economic, and technical risks to guide evolutionary product development. Accurate risk assessment will permit managers to optimize their procurement decisions and identify remedial actions in order to mitigate the risk for each block update of system capabilities. A decision-support tool based on Bayes Theorem will provide the best mechanism to accurately assess risk. Bayes Theorem will permit continual updating of a project's risk estimates using both historical and current contextual information about the multi-dimensional risk environment. Today's commercial and governmental managers strive to minimize the adverse effects of risk, commonly in an environment of multi-dimensional risk. Managers utilizing the Bayesian decision-support tool will maximize their return on investment by minimizing the adverse effects of excessively risky decisions and guiding product design and development at all stages of the acquisition process. Anticipated Benefits/Commercial Applications: Managers utilizing the Bayesian decision-support tool will maximize their return on investment by minimizing the adverse effects of excessively risky decisions and guiding product design and development at all stages of the acquisition process.
Keywords: Bayes Theorem, Bayesian Decision-Support Tool, Risk-based Systems Acquisition, Automated Decision Support, Evolutionary Systems Development
