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will consider future conditions, e.g., increased traffic volume.
b. Assess the costs and the safety risk reduction or other benefits associated with implementation
of, and compliance with, an alternative under final consideration.
8. SUBSTITUTION RISKS. Safety risk assessments of proposed changes to high-consequence
decisions shall include a statement of substitution risks. Substitution risks shall be included in the risk
assessment documentation.
9. SAFETY RISK MANAGEMENT COMMITTEE. This order establishes the Safety Risk
Management Committee. Appendix 2, Safety Risk Management Committee, contains the committee
charter. The committee shall provide a service to any FAA organization for safety risk management
planning, as outlined in appendix 2, when requested by the responsible program office. It also meets
periodically (e.g., two to four times per year) to exchange risk management ideas and information. The
committee will provide advice and counsel to the Office of System Safety, the Assistant Administrator for
System Safety, and other management officials when requested.
Jane F. Garvey
Administrator
8040.4
Appendix 1
Page 1 and 2
APPENDIX 1. DEFINITIONS.
1. COSTS. Direct and indirect costs to the United States Government, State, local, and tribal
governments, international trade impacts, and the private sector.
2. EMERGENCY. A circumstance that requires immediate action to be taken.
3. HAZARD. Condition, event, or circumstance that could lead to or contribute to an unplanned or
undesired event.
4. HAZARD IDENTIFICATION. Identification of a substance, activity, or condition as potentially
posing a risk to human health or safety.
5. HIGH-CONSEQUENCE DECISION. Decision that either creates or could be reasonably estimated to
result in a statistical increase or decrease in personal injuries and/or loss of life and health, a change in
property values, loss of or damage to property, costs or savings, or other economic impacts valued at
$100,000,000 or more per annum.
6. PRODUCT LIFE CYCLE. The entire sequence from precertification activities through those
associated with removal from service.
7. MISHAP. Unplanned event, or series of events, that results in death, injury, occupational illness, or
damage to or loss of equipment or property.
8. RISK. Expression of the impact of an undesired event in terms of event severity and event likelihood.
9. RISK ASSESSMENT.
a. Process of identifying hazards and quantifying or qualifying the degree of risk they pose for
exposed individuals, populations, or resources; and/or
b. Document containing the explanation of how the assessment process is applied to individual
activities or conditions.
10. RISK CHARACTERIZATION. Identification or evaluation of the two components of risk, i.e.,
undesired event severity and likelihood of occurrence.
11. RISK MANAGEMENT. Management activity ensuring that risk is identified and eliminated or
controlled within established program risk parameters.
12. SAFETY RISK. Expression of the probability and impact of an undesired event in terms of hazard
severity and hazard likelihood.
13. SUBSTITUTION RISK. Additional risk to human health or safety, to include property risk, from an
action designed to reduce some other risk(s).
6/26/98
8040.4
Appendix 2
Page 1
APPENDIX 2. SAFETY RISK MANAGEMENT COMMITTEE
1. PURPOSE. The Safety Risk Management Committee provides a communication and support team to
supplement the overall risk analysis capability and efficiency of key FAA organizations.
2. RESPONSIBILITIES. The Committee supports FAA safety risk management activities. It provides
advice and guidance, upon request from responsible program offices, to help them fulfill their authority and
responsibility to incorporate safety risk management as a decisionmaking tool. It serves as an internal
vehicle for risk management process communication, for coordination of risk analysis methods, and for use
of common practices where appropriate. This includes, but is not limited to:
a. Continuing the internal exchange of risk management information among key FAA
organizations.
b. Fostering the exchange of risk management ideas and information with other government
agencies and industry to avoid duplication of effort.
c. Providing risk analysis/management advice and guidance.
d. Identifying and recommending needed enhancements to FAA risk analysis/management
capabilities and/or efficiencies upon request.
e. Maintaining a risk management resources directory that includes:
(1) FAA risk methodologies productively employed,
(2) Specific internal risk analysis/management expertise by methodology or tool and
organizational contact point(s), and
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