Trends in DOD’s Use of Commercial Solutions Openings

Back in May, a Department of Defense (DOD) group of subject matter experts in the use of Commercial Solutions Offerings (CSOs) met for what they call a “Cross Talk” conference. Slides from this meeting yielded a little data on trends in the use of CSOs that might be of interest to industry.

For those unsure what CSOs are, here is a description from the Defense Acquisition University (DAU).

“Commercial Solutions Opening (CSO) is a competitive process to obtain solutions or new capabilities that fulfill requirements, close capability gaps, or provide potential technological advances. CSO procedures are similar to those 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 are often, but not always, discussed in connection with Other Transaction Agreements (OTAs), which get more publicity and are more consistently reported to government procurement data websites. CSOs can, however, result in the award of contracts for commercial products and services that are not OTAs.

DOD began using CSOs in FY 2018, but it was only with passage of the National Defense Authorization Act for Fiscal Year 2022 that Congress permanently granted DOD the authority to use them. Since then, the number of procurement “actions” related to CSOs has been rising. Here is what the Cross Talk slide deck showed:

Altogether, DOD organizations reported a total of 121 CSO actions in FY 2022 and 167 in FY 2023. As we can see, the Air Force uses CSOs more often than the rest of the DOD. Surprisingly, some organizations, such as the U.S. Navy, barely make use of CSOs at all.

Concerning what these CSO actions were for, the data in the Cross Talk deck did not reveal those details. It is possible, however, to derive some insight from CSOs tracked in the GovWin IQ database. Here is that data below.

CSOs appear to be used primarily for IT requirements. Here are descriptions of a couple of those:

In FY 2023, the Air Force awarded a CSO contract for work on the DOD’s Joint All Domain Command and Control (JADC2) construct. No further details are available. Also in FY 2023, the Army awarded a CSO contract for a Lower Echelon Analytic Platform Tactical Army Cloud. From these efforts we can tell that CSO work is typically related to cutting edge system development.

Returning to the Cross Talk slide deck, it mentions that the Air Force is standing up a Commercial Solutions Opening Center of Excellence (CoE) that leverages a Microsoft Power Business Intelligence application in the DAF Acquisition Toolbox. The app will provide CSO data/resources to members of the CoE that helps determine if using a CSO is appropriate given the requirement. The Army is also involved in the Air Force’s CSO CoE.

Based on the fact that the Air Force and Army are institutionalizing the use of CSOs it would be best for industry to keep an eye on their use. The DOD’s use of OTAs also started slowly before customers began using them for a growing number of requirements. Lastly, the Department of Homeland Security also began using CSOs in FY 2023.