Acquiring Commercial Solutions

Department of Defense

Recent Executive Orders and Policies increase focus on rapidly acquiring and integrating commercial and innovative solutions to deliver capabilities to warfighters at the speed of relevance.

The Directing Modern Software Acquisition to Maximize Lethality memo issued by the Secretary of Defense on March 6, 2025 directs:

All DoD Components to adopt the Software Acquisition Pathway (SWP) as the preferred pathway for all software development components of business and weapon system programs in the Department.
Use of Commercial Solutions Openings and Other Transactions as the default solicitation and award approaches for acquiring capabilities under the SWP.

The Army Transformation and Acquisition Reform memo issued by the Secretary of Defense on April 30, 2025 directs the Army to:

Expand the use of Other Transaction Authority agreements to enable faster prototyping and fielding of critical technologies; this includes software and software-defined hardware.
Reform contracting processes to improve efficiency: implement performance-based contracting to reduce waste and expand multi-year procurement agreements when cost-effective.

The Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base Executive Order, issued on April 9, 2025, requires the DoD to reform acquisition processes with the objective to expedite innovative capability delivery to our warfighters. Specifically it calls on the Department to reform acquisition processes by:

Using existing authorities to expedite acquisitions throughout the DoD, including a first preference for commercial solutions and a general preference for Other Transactions Authority, application of Rapid Capabilities Office policies, or any other authorities or pathways to promote streamlined acquisitions under the Adaptive Acquisition Framework.
Starting upon issuance of this order, and during the formation of the plan, the Secretary of Defense shall prioritize use of these authorities in all pending Department of Defense contracting actions and require their application, where appropriate and consistent with applicable law, for all Department of Defense contracting actions pursued while the plan directed by this section is under consideration.

Definitions included in the Order:

“Commercial solutions” means any of the methods for procurement of a commercial product or service described in FAR Part 12, DFARS Subpart 212.2, or DFARS Subpart 212.70; or other industry solutions funded by private investment that meet military needs.
“Innovative acquisition authorities” means Other Transactions Authority, commercial solutions, application of Rapid Capabilities Office policies, or any other authorities or pathways to promote streamlined acquisitions under the Adaptive Acquisition Framework.
“Other Transactions Authority” means the ability of the United States Government to enter into contracts other than standard contracts, grants, or cooperative agreements.
“Rapid Capabilities Office” means the Army Rapid Capabilities and Critical Technologies Office, Naval Air Warfare Rapid Capabilities Office, Department of the Air Force Rapid Capabilities Office, or Space Force Rapid Capabilities Office.

Using Preferred Contracting Authorities

Commercial Products and Services (FAR 12)

FAR Part 12 is applicable for acquiring commercial products, services, commercially available off-the-shelf (COTS), and non-developmental items (NDI). FAR Part 12 implements the established preference for the Federal Government to acquire commercial products and services in the following statutes by establishing acquisition policies more closely resembling those of the commercial marketplace and encouraging the acquisition of commercial products and commercial services.

41 U.S.C. §1906: Laws inapplicable to procurements of commercial products and commercial services
41 U.S.C. §1907: Laws inapplicable to procurements of commercially available off-the-shelf items (COTS)
41 U.S.C. §3307: Preference for commercial products and commercial services
10 U.S.C. §3451: Definitions
10 U.S.C. §3452: Relationship of other provisions of law to procurement of commercial products and commercial services
10 U.S.C. §3453: Preference for commercial products and commercial services

Commercial Product. A product used by the general public or by nongovernmental entities and has been sold or offered for sale, lease, or license to the general public. A product that is not yet available in the commercial marketplace, but will be in time to satisfy the delivery requirements under a Government solicitation. Minor modifications to meet Federal Government requirements that do not significantly alter the nongovernmental function or essential physical characteristics of an item or component, or change the purpose of a process may still qualify the product as a commercial item.

Commercial Service. Services offered and sold competitively in substantial quantities in the commercial marketplace based on established catalog or market prices for specific tasks performed or specific outcomes to be achieved and under standard commercial terms and conditions. Includes installation, maintenance, repair, training, and other services that support commercial products that may be acquired separately from the product.

Commercially Available Off-the-Shelf (COTS) Item. Any item of supply (including construction material) that is a commercial product sold in substantial quantities in the commercial marketplace and offered to the Government without modification in the same form in which it is sold in the commercial marketplace. Does not include bulk cargo, as defined in 46 U.S.C. §40102(4), such as agricultural products and petroleum products.

Non-developmental Item (NDI). Any previously developed item of supply used exclusively for governmental purposes by a Federal agency, a State or local government, or a foreign government with which the U.S. has a mutual defense cooperation agreement. Any item that requires only minor modification or modifications of a type customarily available in the commercial marketplace in order to meet Government requirements. Any item of supply that does not meet the previous definitions solely because the item is not yet in use.

Supplies or services to be used to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack may be acquired as commercial products or commercial services (with head of agency determination).

FAR Part 12 authorizes procedures for streamlined evaluations for commercial products and services. The evaluation criteria need not be more detailed than technical (capability of the item offered to meet the agency need), price, and past performance. Technical capability may be evaluated by how well the proposed products or services meet the requirement instead of predetermined subfactors. Solicitations do not have to contain subfactors for technical capability when the solicitation adequately describes the intended use of the commercial product or service.

If market research indicates commercial practices are appropriate, those commercial practices should be considered for the solicitation and contract if they would result in business arrangements satisfactory to both parties and not otherwise precluded by law or Executive Order.

Contract types are limited to Firm-Fixed-Price (FFP), Fixed-Price with Economic Price Adjustment (FPEPA), and Time-and-Materials (T&M). A determination and finding is required for T&M contract types.

Cost Accounting Standards (CAS) do not apply for commercial products or commercial services when contracts are firm-fixed-price or fixed-price with economic price adjustment (provided that the price adjustment is not based on actual costs incurred).

A commercial item determination is required for awards under FAR Part 12.

Resources

Contracting Cone – FAR Part 12

Commercial Products and Services (DFARS 212.2)

DFARS 212.2 – Special Requirements for the Acquisition of Commercial Products and Services

The following may be acquired as commercial products or services without meeting the definitions in FAR Part 2:

Supplies or services to be used to facilitate defense against or recovery from cyber, nuclear, biological, chemical, or radiological attack (41 U.S.C. §1903)
Supplies or services from nontraditional defense contractors (DFARS 212.102(a)(iv) – see below)
Supplies or services resulting from a commercial solutions opening (Commercial Solutions Opening)

Facilities-related services, knowledge-based services (except engineering services), medical services, or transportation services above the simplified acquisition threshold must be acquired as commercial services unless determined that no commercial services are suitable to meet the agency’s needs as provided in 10 U.S.C. §3453(c)(2).

Time-and-material contracts and labor-hour contracts are authorized for services supporting a commercial product, emergency repair services, and any other commercial services commonly sold to the public using time-and-materials or labor-hour contracts, and in the best interest of the Government – approved by the head of agency.

Market research should be leveraged to support the determination of price reasonableness for commercial products and services. Exceptions include if the market research is insufficient to determine price reasonableness; and major weapon systems, subsystems, components, and spare parts for major weapon systems acquired under DFARS 234.70.

Price risk and supplier risk as available in the Supplier Performance Risk System should be considered as part of the award decision when procuring services or end items required in PGI 204.7603.

The Solicitation Module within the Procurement Integrated Enterprise Environment is a mechanism to request and receive proposals from industry and cross-posts to Sam.gov. Effective, 1 October 2026, the Solicitation Module will be required for publishing unclassified solicitations and receiving proposals, in accordance with PGI 205.102-70. Exceptions include: sole source procurements, when using simplified acquisition procedures, when using emergency acquisition flexibilities, or for actions to be awarded outside of the U.S..

Lowest Price Technically Accepted (LPTA) source selection procedures should be avoided for:

Information technology services, cybersecurity services, systems engineering and technical assistance services, advanced electronic testing, or other knowledge-based professional services
Items designated as personal protective equipment
Knowledge-based training or logistics services in contingency operations or other operations outside the U.S.

LPTA is prohibited for:

Personal protective equipment or an aviation critical safety item
Engineering and manufacturing development for a major defense acquisition program

A commercial item determination is required. Prior determinations are acceptable. See the PIEE Commercial Item Database for previous commercial item determinations.

Nontraditional Contractor Products and Services as Commercial

DFARS Subpart 212.102(a)(iv) implements 10 U.S.C. §3457 and authorizes supplies and services provided by nontraditional defense contractors to be treated as commercial products or commercial services to enhance defense innovation and investment, enable DoD to acquire items that otherwise might not have been available, and create incentives for nontraditional defense contractors to do business with DoD.

Nontraditional Defense Contractor. An entity that is not currently performing and has not performed, for at least the one-year period preceding the solicitation of sources by the DoD for the procurement or transaction, any contract or subcontract for the DoD that is subject to full coverage under the cost accounting standards prescribed pursuant to 41 U.S.C. §1502 and the regulations implementing such section.

A commercial item determination is not required when commercial item procedures are applied to procure supplies and services from non-traditional defense contractors. Nor does applying commercial procedures mean an item is commercial.

Resources:

Commercial Solutions Opening (DFARS 212.70)

Commercial Solutions Opening (CSO) is authorized by 10 U.S.C. §3458 and implemented in DFARS Subpart 212.70. CSOs are intended to streamline processes to acquire innovative solutions by enabling flexibility in the evaluation and selection processes, distinct from DFARS source selection procedures.

CSO procedures are similar to a Broad Agency Announcements (BAAs) in that CSOs can remain open for a stated period of time and proposals submitted against CSO calls may be evaluated for award using merit-based evaluation procedures. A key difference is BAAs are limited to basic, applied, and advanced research whereas CSOs can be used to acquire innovative commercial solutions that directly meet program requirements.

Innovation Definition: Any technology, process, or method, including research and development, that is new as of the date of submission of a proposal OR any application that is new as of the date of submission of a proposal of a technology, process, or method existing as of such date.

CSOs can be used to award FAR contracts as well as agreements. CSO awards are limited to fixed-price or fixed-price incentive arrangements.

Solutions acquired using a CSO are considered commercial products or services, however a commercial item determination is not required.

CSOs can be established with Areas of Interest enabling subsequent calls to be placed to request solutions to a specific problem or challenge and allowing industry to solve it, rather than the Government pre-determining the requirement. There is no set vendor pool and any vendor can respond to a CSO call. A CSO call should broadly describe the capability needed rather than provide a specific requirement for vendors to propose against. The objective is to enable commercial solution providers to assess the Government’s need and propose innovative solutions to meet the capability need.

CSO evaluation factors should include a scientific, technological, or other subject-matter expert peer review process. Written evaluation reports on individual proposals are required, but proposals need not be evaluated against each other since they are not submitted in response to a common performance work statement or statement of work. CSO evaluation factors should include:

Technical and importance to agency programs as the primary evaluation factors;
Price to the extent appropriate, but at a minimum to determine that the price is fair and reasonable; and
Relative importance of the factors, and the method of evaluation;

Source: DAU Acquipedia

Techniques for using CSOs to Acquire Commercial Solutions

Leverage existing open CSOs from other organizations to execute calls. Listing of active CSOs is available at the CSO Center of Excellence (CAC Enabled).
Leverage SOCOM Vulcan to issue CSO calls and take advantage of Vulcan’s dynamic marketplace and resources to connect with innovators and leverage data analytics and visualization capabilities to streamline evaluation processes. Vulcan is available to all Government users at no cost.
Use a variety of innovative techniques such as challenges, demonstrations, pitch events, down-selects, and oral presentations individually or in combination to develop a CSO process that meets the needs of the program.
When awarding Prototype OTs under a CSO, programs can adopt the Defense Innovation Unit (DIU) CSO Process or tailor the process to meet the needs of the program. DIU CSO procedures are different than the CSO Procedures authorized by 10 U.S.C. §3458 and implemented at DFARS 212.70. Prior to codification of the CSO process in Title 10, the DIU established a competitive process they termed “commercial solutions opening” specifically designed to award Prototype Other Transactions under 10 U.S.C. §4022 for prototyping projects focused on commercial dual-use technologies.
Leverage the Chief Digital and Artificial Intelligence Office (CDAO) Tradewinds to find AI/ML solutions awarded under the CSO authority and available for purchase by programs.

Resources:

Contracting Cone – Commercial Solutions Opening
DAU CSO Cross Talk
CSO Community of Excellence (CAC Enabled) – DAF led but available to all DoD Users
The Contracting Experience – Episode 65: Commercial Solutions Opening Center of Excellence (CoE) – Overview of the CSO CoE resources, including templates, examples, pricing, best practices/lessons learned across the DAF and DoD, etc.
DOD CSO Opportunities – Existing CSO vehicles
AFWERX CSO Guide

Examples:

Other Transactions (10 U.S.C. §4021 and 4022)

Two types of Other Transaction (OT) Authority are available to the Department of Defense. OTs are executed by appointed Agreements Officers.

Research OTs authorized by 10 U.S.C. §4021 are applicable for basic, applied, and advanced research projects to pursue development and application of dual-use technology. Unlike Prototype OTs, Research OTs do not include authority for transition to follow-on production contracts or transactions.

Prototype OTs authorized by 10 U.S.C. §4022 are appropriate for research and development and prototyping activities to enhance mission effectiveness of military personnel and supporting platforms, systems, components, or materials. Prototype OTs can provide a path to directly award a follow-on Production OT or contract without having to re-compete the effort – if the criteria at 10 U.S.C. §4022(f) are satisfied. This is an important benefit of the Prototype OT approach, but programs must develop acquisition approaches for prototype projects that address anticipated follow-on activities to properly take advantage of this authority and ensure the program is prepared and resourced to move forward with a capability from a successfully completed prototype OT.

Prototype Project Definition: A prototype project addressing a proof of concept, model, reverse engineering to address obsolescence, pilot, novel application of commercial technologies for defense purposes, agile development activity, creation, design, development, demonstration of technical or operational utility, or combinations of the foregoing. A process, including a business process, may be the subject of a prototype project.

Criteria for using Prototype OTs, conditions for awarding a follow-on Production OT or contract under 10 U.S.C. §4022(f), and OT approval thresholds can be found on the Contracting Cone and in the following memos:

OTs may be fixed-price (e.g., milestone based) or expenditure-based (similar to cost-plus-fixed-fee contract type). Expenditure-based agreements will require financial/cost records from an approved accounting system.

Techniques for Using OTs to Acquire Commercial Solutions

The USD A&S Other Transactions Guide v2.0 Jul 2023 provides guidance for planning and executing Research OTs, Prototype OTs, and follow-on Production OTs.
Programs without Agreement Officers or expertise to award Prototype OTs may consider using an Other Transaction Consortium for support to execute processes and collections of innovators aligned to technology areas relevant to a program’s needs. More information on the OT Consortia model.
Programs can Work With the Defense Innovation Unit (DIU) to solve challenges using commercial technologies or adopt the DIU CSO Process or tailor to meet the needs of the program for awarding Prototype OTs.
- DIU CSO procedures are different than the CSO Procedures authorized by 10 U.S.C. §3458 and implemented at DFARS 212.70. Prior to codification of the CSO process in Title 10, the DIU established a competitive process termed “commercial solutions opening” specifically designed to award Prototype Other Transactions under 10 U.S.C. §4022 for prototyping projects focused on commercial dual-use technologies.
- Programs can also award a non-competitive follow-on awards under 10 U.S.C. §4022(f) to a dual-use commercial solution provider that successfully completed a DIU Prototype OT project leveraging a DIU Success Memo. Search the DIU Solutions Catalog for successful Prototype OTs available for immediate follow-on award.

Programs should consider the following to develop a successful OT strategy:

Market research and market engagement are powerful tools. Leverage these resources to the fullest extent to solicit feedback from industry, validate assumptions, and gain a broad vendor understanding of your objectives.
Clearly articulate why an OT is the right approach – both to program leadership and to industry.
If planning to award a Prototype OT, be sure to annotate that a non-competitive, follow-on Production award may result in accordance with requirements to leverage the follow-on authority under 10 U.S.C. §4022.
Define completion for a Prototype OT project and cement it through a specific and measurable “Definition of Done” for the prototype. This is important for leveraging the follow-on authority under 10 U.S.C. §4022(f).
OTs offer incredible flexibility in a program’s source selection strategy. Consider multi-phased down-select approaches and challenges or combine OT authority with a Challenge-Based Acquisition (ChBA) to maximize innovative solutioning.
Particularly in the context of rewarding a successful prototype, an OT can be structured as a completion-based effort. It is possible (and often favorable for industry) to complete advanced prototypes and development work under a milestone fixed-price construct.
Data rights are negotiable. Ensure the program doesn’t pay for unneeded data, but also ensure the program is set up for long-term lifecycle success (e.g., leveraging open standards, architectures, and APIs) and not creating a long-term untenable “vendor lock” situation. Also be mindful of intellectual property (IP) rights that are the life blood of innovative companies. A successful data rights/IP strategy enables the government to own and/or access the necessary data and provides vendors (namely innovators) an opportunity to retain their IP to grow their business.

Resources:

Leveraging Rapid Capability Office Policies

Based on best practices from leading DoD acquisition organizations, success is enabled by leadership that drives change by creating the expectation to try new processes, small teams of highly skilled functional experts with direct feedback from operational communities, and driving prototyping/demonstrations before making buy decisions.

Army Rapid Capabilities and Critical Technologies Office (RCCTO)

Source: Army RCCTO

The Army Rapid Capabilities and Critical Technologies Office (RCCTO) serves to expedite critical capabilities to the field to meet Combatant Commanders’ needs. The Office enables the Army to experiment, evolve and deliver technologies in real time to address both urgent and emerging threats, while supporting acquisition reform efforts.

The RCCTO leverages innovation by other government agencies and industry partners, as well as Warfighter feedback, to deliver solutions on an accelerated timeline. Ordinarily, enduring capabilities resulting from these efforts will be transitioned over to a Program Executive Office for continued production, modification, sustainment, and support. The RCCTO provides expertise not solely focused on materiel; it seeks to provide holistic solutions that inform the Doctrine, Organization, Training, Materiel, Leadership, Personnel, Facilities and Policy (DOTMLPF-P) impacts of implementing new capabilities within the operational Army.

Key Operating Principles

Short and narrow chain of command
Overarching programmatic insight
Early and prominent Warfighter involvement
Collaborative integrated team of functional specialists

RCCTO Portfolio

Advanced Concepts And Critical Technologies (ACCT)
Army Hypersonic Project Office (AHPO)
Counter-Small Unmanned Aircraft Systems (C-SUAS)
Cyber, Electronic Warfare And Information Dominance (CEID)
Directed Energy Project Office (DEPO)
Rapid Acquisition Prototyping Project Office (RAPPO)
Guam Defense System Joint Program Office (GDS)
Multi-Domain Artillery Cannon System (MDACS)

Air Force Rapid Capabilities Office (DAF RCO)

Source: Air Force Rapid Capabilities Office

The Department of the Air Force Rapid Capabilities Office (DAF RCO) has accelerated methods for developing, acquiring and fielding critical combat capabilities.

The DAF RCO delivers capabilities at the speed of emerging threats:

Expedites the development and fielding of select Department of Defense combat support and weapon systems
Leverages defense-wide technology development efforts and existing operational capabilities
Provides integration and technical support to other Service or U.S. Government activities
Conducts independent operational and technical assessments of weapon or combat support system capabilities and vulnerabilities
Takes on new challenges to accelerate operationally-focused capabilities

The DAF RCO is staffed with a collaborative, multidisciplinary team. Inherent in the DAF RCO’s mission is intent to experiment, within the bounds of statute, to discover and recommend new methods, processes and techniques for the Air Force, the Space Force and the DoD to acquire and field capabilities efficiently.

Key operating principles of the DAF RCO include a short and narrow chain of command, early and prominent war-fighter involvement, and funding stability.

Space Rapid Capabilities Office (Space RCO)

Source: Space Rapid Capabilities Office

The Space Rapid Capabilities Office (Space RCO) is charged with rapidly delivering first-of-their-kind operational space capabilities that protect space assets and defend joint forces from space-enabled attack. The office is organizationally optimized to deliver space systems on operationally relevant timelines, with the right authorities, structure and talent required to do so.

The Space RCO mission is to deliver timely and operationally relevant space superiority and resilience capabilities to the warfighter. They expedite delivery and work closely with all of the Space Force’s Field Commands (i.e., Space Systems Command, Space Operations Command, and Space Training and Readiness Command) to rapidly field space capabilities in response to the Commander of U.S. Space Command requirements. Space RCO programs are also closely coordinated with the Space Force’s Chief Strategy and Resourcing Officer’s staff for alignment with Service priorities.

Space RCO maintains a very short chain of command and a culture of empowerment, for which authorities are maximally delegated on every team. Its program teams are intentionally kept small—with about eight to 12 dedicated personnel. These teams are comprised of all requisite functional disciplines, including program management, systems engineering, contracting, security and financial management. Combined, these factors are critical in enabling the rapid response required for unique missions.

Marine Corps Rapid Capabilities Office (MCRCO)

Source: Marine Corp Rapid Capabilities Office

Marine Corps Rapid Capabilities Office (MCRCO) Division reduces the time between need identification, technological opportunity, and delivery of warfighting capability to the operating forces. The MCRCO draws upon embedded support from Marine Corps Systems Command while collaborating with organizations such as the office of the Capabilities Development Directorate, Deputy Assistant Secretary of the Navy for Research, Development, and Acquisition; Naval Research and Development Establishment, Marine Corps Operational Test and Evaluation Activity (MCOTEA); Program Executive Office Land Systems; Special Operations Forces Acquisition, Technology, and Logistics; Marine Corps Forces Special Operations Command; Office of Naval Research, and other Service and Defense Agency Stakeholders.

The MCRCO has no program of record responsibility or standard acquisition authority, however it equips operating forces for operational assessments with high maturity technologies that are safe for warfighter use. The key deliverable from the MCRCO is the Capability Assessment Report that supports the effective transition of capability to the operating forces through USMC and Joint Acquisition Commands.

Identify:

Current and anticipated technologies to counter emerging threats
Operationally Assess mature and emerging “game changing” technology prototypes
Develop Concept of Employment

Assess:

Rapid Prototyping, Experimentation, Demonstration, and equipping for Operational Assessments
Emerging operational and Marine Corps service needs for which no suitable material solution exists
New technologies which enable the Marine Corps to maintain its operational and technological superiority over potential adversaries

Inform:

The accelerated acquisition process by using Operational Art, emergent technology and mature technology
Provide a Capabilities Assessment Report (CAR) to impact investment decisions enabling accelerated Requirements Transition Process and Capability Solution Delivery

Using Other Authorities to Streamline Acquisition

Federal Supply Schedules (FAR 8.4)

FAR 8.4 implements the Federal Supply Schedule (FSS) Program (or the Multiple Award Schedule (MAS) Program) which provides a simplified process of acquiring commercial supplies and commercial services in varying quantities while obtaining volume discounts.

Agencies can place Task Orders or Delivery Orders under GSA FSS contracts for required products or services. Agencies can establish single or multiple award Blanket Purchase Agreements (BPAs) under all schedule contracts.

Contract types are limited to firm-fixed-price (FFP) or time and materials (T&M).

Resources:

Simplified Procedures for Certain Commercial Products and Services (FAR 13.5)

FAR 13.5 authorizes the use of simplified procedures for the acquisition of supplies and services in amounts greater than the simplified acquisition threshold but not exceeding $7.5 million, and not to exceed $15 million for commercial products or services to be used in support of contingency operations, disaster or emergency response, and defense or recovery from cyber, nuclear, biological, chemical, or radiological attack.

The purpose of the simplified procedures is to provide additional procedural discretion and flexibility, so that commercial acquisitions in this dollar range may be solicited, offered, evaluated, and awarded in a simplified manner that maximizes efficiency and economy and minimizes burden and administrative costs for both the Government and industry in accordance with 10 U.S.C. §3205 – Simplified Procedures for Small Purchases and 41 U.S. Code §3305 – Simplified Procedures for Small Purchases.

Blanket Purchase Agreements (BPAs) can be established under FAR Part 13 for commercial products and services awards up to the stated thresholds. BPAs established under FAR Part 13 do not include Federal Supply Schedule (FSS) contracts. FSS BPAs are addressed in FAR 8.405-3.

Resources:

SBIR Phase III Awards (15 U.S.C. §638)

Small Business Innovation Research (SBIR) Phase III awards may be awarded non-competitively to any Phase I or II SBIR vendor at any time, even if the vendor has exceeded the small business size standard, without limitations on contract duration, contract type, or dollar value. The competition for SBIR Phase I and Phase II awards by any Federal Government agency satisfies competition.

SBIR Phase III awards may extend or complete effort begun under Phase I or Phase II awards, including commercial application of products, services, research and development, or any combination thereof. Awards may be FAR contracts or OT agreements.

SBIR data rights at DFARS 252.227-7018 are required for Phase III awards.

Resources:

Procurement for Experimental Purposes (10 U.S.C. §4023)

Procurement for Experimental Purposes (10 U.S.C. §4023) authorizes acquisition of quantities necessary for experimentation, technical evaluation, assessment of operational utility, or to maintain a residual operating capability for ordnance, signal, chemical activity, transportation, energy, medical, space-flight, aeronautical supplies, and telecommunications.

There is not a competition requirement under this authority. Nor are there cost-sharing requirements or small-business/nontraditional contractor participation requirements.

Awards may be contracts or agreements. As FAR and DFARS procedures are not applicable, commercial terms and conditions may be leveraged for awards.

Limitations for use include experimental or test purposes and for quantities needed for test. Acquiring production quantities is not authorized.

Resources:

Challenge-Based Acquisition (ChBA)

Challenge-Based Acquisition (ChBA) is an approach for presenting the solution to be acquired as a challenge to allow potential solution providers to propose innovative solutions that meet the need. ChBA frameworks are structured as part of a source selection with a focus on scripted demonstrations and streamlining is achieved by developing the multi-phased strategy in parallel with a follow-on contract or agreement. A ChBA framework can leverage CSO-like procedures and/or OT authorities to provide a path to award and an eventual transition to production or a more traditional FAR based contract vehicle.

ChBA is different from Prize Competitions under15 U.S.C. §3719 that leverage challenges to award cash prizes leveraging GSA’s Challenge.gov.

ChBA Best Practices:

Innovative market research techniques help to shape the collaborative landscape and inform the problem to be solved.
There are many ways to tailor a ChBA resulting in different contract vehicles. There is not a single or one-size fits all ChBA process. MITRE’s ChBA Guidebook offers various ChBA approaches and techniques for tailoring.

Resources:

MITRE’s Challenge Based Acquisition Guidebook

Examples:

NOTAM & Aeronautical Information System ChBA

Software Acquisition Pathway (SWP)

Source: DAU AAF Software Acquisition Pathway

The Software Acquisition Pathway (SWP) is designed for timely acquisition of software capabilities developed for the DoD. The pathway objective is to facilitate rapid and iterative delivery of software capability to the user. This pathway integrates modern software development practices such as Agile Software Development, DevSecOps, and Lean Practices.

The Applications subpath provides for rapid development and deployment of software running on commercial hardware, including modified hardware, and cloud computing platforms.
The Embedded software subpath provides for the rapid development, deployment, and insertion of upgrades and improvements to software embedded in weapon systems and other military-unique hardware systems. The system in which the software is embedded could be acquired via other acquisition pathways (e.g., major capability acquisition).
The Defense Business System (DBS) subpath enables DBS programs to leverage the SWP and selectively adopt and tailor in Business Capability Acquisition Cycle (BCAC) processes while also providing flexibility for continuous delivery of capability.

Key SWP Policies:

Programs executing the SWP are not subject to the Joint Capabilities Integration and Development System (JCIDS). SW-ICD .
Programs executing the SWP will not be treated as major defense acquisition programs.
Programs using the SWP will demonstrate the viability and effectiveness of capabilities for operational use not later than 1 year after the date on which funds are first obligated.
Programs will require government and contractor software teams to use modern iterative software development methodologies (e.g., agile or lean), modern tools and techniques (e.g., development, security, and operations (DevSecOps)), and human-centered design processes to iteratively deliver software to meet the users’ priority needs.
Software development will be done in active collaboration with end users

A best practice for SWP programs is to leverage a modular contracting strategy. Modular contracting is the preferred approach for acquiring major information technology systems in accordance with 41 U.S.C. §2308 and is implemented at FAR 39.103. Modular contracting is an approach that divides an acquisition into smaller increments with the intended outcomes of reducing program risk, continuously acquiring rapidly-changing technology, and enabling flexibility for programs to scale. Commercial Solutions Opening (CSO) procedures and Other Transaction (OT) agreements are the default approaches for SWP programs in accordance with the Directing Modern Software Acquisition to Maximize Lethality memo.

Resources:

Examples:

- SWP Programs
- Joint Cyber Weapons Acquisition Program in the Marine Corps – SWP Lessons Learned

Middle Tier of Acquisition (MTA) Pathway

Source: DAU AAF Middle Tier of Acquisition Pathway

The Middle Tier of Acquisition (MTA) pathway is used to rapidly develop fieldable prototypes within an acquisition program to demonstrate new capabilities and/or rapidly field production quantities of systems with proven technologies that require minimal development. The MTA pathway is intended to fill a gap in the Defense Acquisition System (DAS) for those capabilities that have a level of maturity to allow them to be rapidly prototyped within an acquisition program or fielded, within 5 years of MTA program start. The MTA pathway may be used to accelerate capability maturation before transitioning to another acquisition pathway or may be used to minimally develop a capability before rapidly fielding.

The Rapid Prototyping subpath provides for the use of innovative technologies to rapidly develop fieldable prototypes to demonstrate new capabilities and meet emerging military needs.

The Rapid Fielding subpath provides for the use of proven technologies to field production quantities of new or upgraded systems with minimal development required.

Resources:

Examples:

Source: Defense One – Get to Know the Middle Tier of Awesome…Er, Acquisition

Next Generation Squad Weapons. MTA’s streamlined requirements process knocked two or three years off the Army’s development of powerful new squad weapons compared to the regular process.
F-15EX. The Air Force fielded a squadron’s worth of upgraded fighter aircraft in less than three years, a feat that would likely have taken a decade using older methods.
Angry Kitten Combat Pods. In just 30 sorties over two weeks, the Air Force executed an operational assessment that “dramatically shaped the direction of electronic warfare” in the service.
Wideband Satellite–Expeditionary. The Marines saved a year by developing and deploying commercial technology instead of executing a typical acquisition program.
Robotic Combat Vehicle. The Army has repeatedly upgraded the modularized autonomous platform, giving it sensor and networking advances and continuous agile software upgrades—all of which would have required multiple lengthy follow-on programs under the traditional approach.
Optionally Manned Fighting Vehicle. After feedback from industry, the Army was able to pivot and quickly update its acquisition plan with more realistic requirements that will surely prevent reoccurrence of past programs where billions were wasted before program cancellation. The OMFV strategy shift is an awesome alternative to the expensive, delayed, and doomed Comanche helicopter debacle.

Stacking Preferred and Streamlined Authorities

CSOs can be used to award FAR Part 12 contracts and OT agreements. Note the contract type limitation (fixed-price or fixed-price incentive arrangements) for awards under CSOs.
A CSO used to award a Prototype OT can be used to award follow-on Production OT, FAR Part 12, SBIR Phase III, as well as others.
A Prototype OT follow-on Production award could be a FAR Part 12 contract or a subsequent OT.
SBIR Phase III awards may be FAR Part 12 contract and OT agreements.
Challenge-Based Acquisition may be used in combination with CSOs, OTs, and FAR Part 12 contracts. Note the contract type limitation (fixed-price or fixed-price incentive arrangements) for awards under CSOs.
Procurements for Experimental Purposes can be used for test/experimentation of items with transition to Prototype OT for prototyping and follow-on production OT or FAR awards.
CSOs and OTs are the preferred contracting approaches for SWP programs to execute a modular contracting strategy.
MTA Prototyping efforts can leverage Prototype OTs and subsequent follow-on Production OTs or FAR awards to transition to another pathway for production/fielding.
Challenge-Based Acquisition may be used with SWP and MTA programs.

Finding Commercial Solution Providers and Innovators

DoD Innovation Ecosystem organizations seek to find and explore technologies that are needed for the future fighting force (e.g., artificial intelligence, robotics, 3-D printing, autonomy, quantum computing) and help make critical connections between innovative solution providers and government acquirers.
SOCOM Vulcan provides a dynamic marketplace and resources to connect with innovators and leverage data analytics and visualization capabilities to streamline evaluation processes. Vulcan is available to all Government users at no cost.
CDAO Tradewinds Marketplace provides a venue for DoD organizations to search, view, review, compare, contrast, contact, discuss, negotiate, and procure data, analytics, digital, and AI/ML capabilities solutions through rapid acquisition procedures including CSOs, BAAs, and OTs.
DIU Solutions Catalog provides projects available for non-competitive follow-on awards under 10 U.S.C. §4022(f) to a dual-use commercial solution provider that successfully completed a DIU Prototype OT project leveraging a DIU Success Memo.
Other Transaction Consortia award Prototype OTs under 10 U.S.C. §4022 leveraging established streamlined processes to compete among an established pool of vendors aligned to consortium focus area (i.e., cyber, space, undersea) promoting collaboration with government programs and among consortium members. Programs can leverage OT Consortia if they do not have resources to directly award OTs.
Social media (e.g., LinkedIn) can be leveraged to expand market research and cross-post Sam.gov notices, requests for information, and solicitations to broaden awareness of government opportunities to entities unaware of Sam.gov or other “entry portals” to work with the DoD.

All Federal Agencies

The Ensuring Commercial, Cost-Effective Solutions in Federal Contracts Executive Order, issued on 16 April 2025, requires all Federal Government agencies to procure commercial products and services to the maximum extent practicable, pursuant to the Federal Acquisition Streamlining Act (FASA) of 1994, codified in 41 U.S.C. §3307 (10 U.S.C. §3453 for the DoD).

Following an immediate review of all pending actions for non-commercial products and services, future procurements for non-commercial products or services require senior procurement executive, defined at 41 U.S.C. §1702(c), approval.

Federal Acquisition Streamlining Act (FASA)

The objectives of FASA include:

Increasing procurement of commercial products and services
minimizing certified cost or pricing data requirements
Reducing unique purchasing requirements
simplifying acquisition procedures
obtaining products and services more quickly and reducing costs

41 U.S.C. §3307 - Preference for Commercial Products and Services

In accordance with 41 U.S.C. §3307, agencies are to:

(1) acquire commercial services or commercial products or nondevelopmental items other than commercial products to meet the needs of the executive agency;

(2) require that prime contractors and subcontractors at all levels under contracts of the executive agency incorporate commercial services or commercial products or nondevelopmental items other than commercial products as components of items supplied to the executive agency;

(3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency’s needs are not available, nondevelopmental items other than commercial products;

(4) state specifications in terms that enable and encourage bidders and offerors to supply commercial services or commercial products or, to the extent that commercial products suitable to meet the executive agency’s needs are not available, nondevelopmental items other than commercial products in response to the executive agency solicitations;

(5) revise the executive agency’s procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial products and commercial services; and

(6) require training of appropriate personnel in the acquisition of commercial products and commercial services.

10 U.S.C. §3453 - Preference for Commercial Products and Services

In accordance with 10 U.S.C. §3453, agencies are to the maximum extent practicable:

(1) acquire commercial services, commercial products, or nondevelopmental items other than commercial products to meet the needs of the agency;

(2) require prime contractors and subcontractors at all levels under the agency contracts to incorporate commercial services, commercial products, or nondevelopmental items other than commercial products as components of items supplied to the agency;

(3) modify requirements in appropriate cases to ensure that the requirements can be met by commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products;

(4) state specifications in terms that enable and encourage bidders and offerors to supply commercial services or commercial products or, to the extent that commercial products suitable to meet the agency’s needs are not available, nondevelopmental items other than commercial products in response to the agency solicitations;

(5) revise the agency’s procurement policies, practices, and procedures not required by law to reduce any impediments in those policies, practices, and procedures to the acquisition of commercial products and commercial services;

(6) require training of appropriate personnel in the acquisition of commercial products and commercial services; and

(7) establish criteria in performance evaluations for appropriate personnel to reward risk-informed decisions that maximize the acquisition of commercial products, commercial services, or nondevelopmental items other than commercial products.

Using Commercial Contracting Authorities and Authorities to Streamline Acquisitions

Federal Supply Schedules (FAR 8.4)

Contract types are limited to firm-fixed-price (FFP) or time and materials (T&M).

Resources:

Commercial Products and Services (FAR 12)

41 U.S.C. §1906: Laws inapplicable to procurements of commercial products and commercial services
41 U.S.C. §1907: Laws inapplicable to procurements of commercially available off-the-shelf items (COTS)
41 U.S.C. §3307: Preference for commercial products and commercial services
10 U.S.C. §3451: Definitions
10 U.S.C. §3452: Relationship of other provisions of law to procurement of commercial products and commercial services
10 U.S.C. §3453: Preference for commercial products and commercial services

Contract types are limited to Firm-Fixed-Price (FFP), Fixed-Price with Economic Price Adjustment (FPEPA), and Time-and-Materials (T&M). A determination and finding is required for T&M contract types.

A commercial item determination is required for awards under FAR Part 12.

Resources

Contracting Cone – FAR Part 12

Simplified Procedures for Certain Commercial Products and Services (FAR 13.5)

Resources:

SBIR Phase III Awards (15 U.S.C. §638)

SBIR Phase III awards may extend or complete effort begun under Phase I or Phase II awards, including commercial application of products, services, research and development, or any combination thereof. Awards may be FAR contracts or OT agreements.

Resources

Other Transactions

Agencies with Other Transaction Authority may be able to leverage OTs to acquire commercial capabilities or prototype using commercial solutions. Agencies with Other Transaction Authority have specific statutory uses, limitations, and restrictions for OTs.

Challenge-Based Acquisition (ChBA)

ChBA is different from Prize Competitions under15 U.S.C. §3719 that leverage challenges to award cash prizes leveraging GSA’s Challenge.gov.

ChBA Best Practices:

Innovative market research techniques help to shape the collaborative landscape and inform the problem to be solved.
There are many ways to tailor a ChBA resulting in different contract vehicles. There is not a single or one-size fits all ChBA process. MITRE’s ChBA Guidebook offers various ChBA approaches and techniques for tailoring.

Resources

MITRE’s Challenge Based Acquisition Guidebook

Examples

NOTAM & Aeronautical Information System ChBA