The Department of Defense’s Use of Commercial Solutions Openings, Fiscal Years 2018-2020

Key Takeaways

• The DODs use of CSOs rose 2,400% between FY 2018 and 2020.
• The U.S. Air Force issues announcements for CSO competitions more often than any other defense organization.
• CSOs are being issued across the DOD for products and services, not all of which are related to information technology.

Back in fiscal 2017, Section 879 of the National Defense Authorization Act authorized the Department of Defense (DOD) to launch a competitive pilot program using what are called Commercial Solutions Openings (CSO). CSO procedures are “similar to those used for Broad Agency Announcements (BAAs), with the exception that a CSO can be used to acquire innovative commercial items, technologies, or services that directly meet program requirements, whereas BAAs are restricted to basic and applied research.” CSOs “may also be used to acquire R&D solutions from component development through operational systems development” to obtain solutions or new capabilities that fulfill requirements, close capability gaps, or provide potential technological advances.

Similar in nature to Other Transaction Authority (OTA), CSOs provide the DOD with the ability to rapidly acquire commercial solutions that may offer cutting edge capabilities when deployed in a combat domain. Also like OTA agreements, the DODs use of CSOs has grown in the last few years, although not as much as OTAs.

Growth in CSOs by Number of Solicitations Per Fiscal Year

One way to measure the use of CSOs by the DOD is to count the number of solicitations issued.

After a slow start in FY 2018, defense organizations quickly ramped up the issuance of CSOs, more than doubling the number of CSOs competed from FY 2019 to FY 2020.

Growth in CSOs by Number of Solicitations Per Defense Organization

The data also shows that use of CSOs varies widely across the DOD with the Air Force issuing CSO solicitations most frequently. Air Force issued 1 CSO request in FY 2018. By FY 2020, that number had risen to 81. Twenty-two of the Air Force’s CSOs issued in FY 2020 were for R&D projects. Air Force customers issued another 12 CSOs in FY 2020 for Other Products and Materials while issuing 8 for IT software and services.

U.S. Special Operations Command uses CSOs the most among Defense Agencies, issuing 8 solicitations from FY 2018 to 2020. Three of those CSOs were for R&D with another 2 being issued for Defense and Aerospace solutions.

The Washington Headquarters Service, Defense Health Agency and Defense Intelligence Agency issued 4, 3 and 3 CSOs apiece, respectively. Professional Services accounted for 2 of the WHS’ 4 CSOs and 1 of the DHA’s CSOs.

The Army issued 7 CSOs in FY 2020 for Medical and Scientific Equipment, largely in response to the COVID-19 public health crisis. Otherwise, the Army’s use of CSOs has been minimal.

Similarly, the Navy issued only 6 CSOs in FY 2020, 3 of which were for R&D projects. The balance of Navy CSOs issued covered requirements that included information technology, Professional Services, and Defense and Aerospace projects.

Summing up, although CSOs remain a seldom used procurement method for acquiring innovative commercial solutions and services, the number of solicitations issued annually by the DOD is growing. Competing for these projects should therefore be on the radar of every contractor seeking to grow their business with the DOD.