Commercial Solutions Openings and the potential impact to Software Acquisition

Commercial Solutions Openings and the potential impact to Software Acquisition 

On March 6, 2025, Defense Secretary Pete Hegseth issued a directive elevating the role of Commercial Solutions Openings (CSO) in defense procurement. The memo mandates that DoD components use the Software Acquisition Pathway (SWP) as the preferred approach for all software development, with CSOs and Other Transaction Authorities (OTAs) serving as the "default solicitation and award approach". 

This represents a potential shift in how the Pentagon buys software. 

By making CSOs one of the default approaches for software acquisition, the memo aims to help the DoD "keep pace with commercial technology advancements" and "rapidly deliver scaled digital capabilities". It specifically targets programs in the planning phase, with implementation guidance expected within 30 days of the memo's signing. 

What Are Commercial Solutions Openings, In Brief: 

CSOs are a merit-based selection strategy that allows DoD to acquire innovative commercial products, technologies, or services that fulfill specific requirements or close capability gaps. Unlike traditional procurement methods, CSOs are designed for situations where the DoD has identified a problem but isn't prescribing the exact solution. 

Think of CSOs as the government saying, "Here's our problem - show us how you would solve it." This approach lets companies offer innovative solutions through a simplified process that's intended to be more streamlined than traditional methods.

CSOs received their official authorization through Section 879 of the FY 2017 National Defense Authorization Act (NDAA). However, it was only with the passage of the FY 2022 NDAA that Congress permanently granted the DoD authority to use CSOs, codifying them in law under 10 U.S.C. §3458. 

This evolution from experimental process to permanent acquisition pathway signals a commitment to finding faster, more efficient ways to tap into commercial innovation. 

Overall Trends in CSO Use within DoD: 

While historic CSO contract activity was inconsistently reported, Deltek expects this to improve in the coming months and years, and there is enough data available to draw some conclusions.

The chart below reflects the upward trajectory of spending tied to CSOs over the last five fiscal years. Even excluding COVID-related CSOs and Defense Innovation Unit (DIU) CSOs (captured in a separate chart), spending increased 234% percent from FY 2023 to FY 2024. 

DIU uses CSO procedures as well, but typically awards OTAs, which are included in the DoD’s mandate to use SWP. Reported activity from DIU is only available through FY 2023, but reflects a steady increase in the number of contracts awarded. Funding is likely to follow suit given the increase in Congressional allocations to the organization. These awards are slightly different from the CSO activity in the prior chart which resulted in Firm Fixed Price contracts.

Different Flavors of CSOs: 

CSOs solicitations typically fall into one of the following common "themes": 

• Topic-oriented 
• Specific to a sub-agency or command 
• Tied to major exogenous events (like COVID) 
• Specific to a military installation and its needs 
• Used to set up "marketplaces", notably Tradewinds or the Platform One Solutions marketplace 

All this to say, Contracting Offices do have a variety of options available should they make the determination to use CSO procedures for software acquisition. As an illustration, a recent example is the AFTAC Cloud-Based Operations effort, which is exploring the use of a CSO AFTAC already had in place. 

Finding CSO opportunities and Contracts in GovWin 

Searching for Opportunities: From the "Opportunities" tab, go to the "Basic Information" panel, and select "Type of Award > Commercial Solutions Opening"

Searching for Contracts: Individual CSOs often have unique solicitation numbers (eg FA714621SC001 for SAF CDM CSO). These can be searched as a Keyword (or Solicitation Number) within GovWin Contracts to look up contracts that have been awarded through a specific CSO.