Altex Corporation BACKGROUND Following World War II, the United States entered i

Question

Altex Corporation BACKGROUND Following World War II, the United States entered into a Cold War with Russia. To win this Cold War, the United States had to develop sophisticated weapon systems with such destructive power that any aggressor knew that the retaliatory capability of the United States could and would inflict vast destruetion Hundreds of millions of dollars were committed to ideas concerning technology that had not been developed as yet. Aerospace and defense contractors were growing without bounds, thanks to cost plus-percentage-of-cost contract awards. Speed and technological capability were judged to be significantly more important than cost. To make matters worse, contracts were often awarded to the second or third most qualified bidder for the sole purpose of maintaining competition and maximizing the total number of defense contractors. CONTRACT AWARD During this period, Altex Corporation was elated when it learned that it had just been awarded the R&D; phase of the Advanced Tactical Missile Program (ATMP). The terms of the contract specified that Altex had to submit to the Army, within 6o days after contract award, a formal project plan for the two-year ATMP effort. Contracts at that time did not require that a risk management plan be developed. A meeting was held with the project manager of R&D; to assess the risks in the ATMP effort. PM: "Tm in the process of developing the project plan. Should I also develop a risk management plan as part of the project plan? Sponsor: "Absolutely not! Most new weapon systems requirements are established by military personnel who have no sense of reality about what it takes to develop a weapon system based on technology that doesn't even exist yet. We'll be lucky if we can deliver 60-70 percent of the specification imposed on us." PM: "But that's not what we stated in our proposal. I wasn't brought on board until after we won the award, so I wasn't privileged to know the thought process that went into the proposal. The proposal even went so far as to imply that we might be able to exceed the specification limits, and now you're saying that we should be happy with 60-70 percent.

Explanation / Answer

Answer:- There may not be any requirement of the risk management plan . There was an underlying assumption that the complexity of an advanced weapon system may not be understood by the users effectively and thus it is the government which will be worried due to risk management plan and thus the chances of securing the future manufacturing contracts will be restricted.

Answer:- In both the cases, there is a cost associated with the risk. In fact, during the proposal stage, it is advisable to perform the risk management plan as this will help both the parties to analyze and understand the associated risks and they can try to find out the various ways of mitigating these risks. The entire life of the project is under risk and thus in almost every stage of project, the management should be ready to deal with the risks.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.