The Commercial Solutions Opening (CSO) is a solicitation technique designed to facilitate the acquisition of commercial products, commercial services, and nondevelopmental items through a competitive selection of proposals resulting from a general solicitation and an appropriate peer, technical, or operational review. Section 879 of the 2017 National Defense Authorization Act (NDAA)initially authorized CSOs as a pilot program, which Section 803 of the 2022 NDAA made permanent and codified at 10 U.S.C. §3458. Section 1823 of the FY2026 NDAA further amended 10 U.S.C. §3458 to broaden the authority beyond innovative offerings, add nondevelopmental items, permit peer, technical, or operational review, and authorize certain follow-on production contracts and transactions. The Department of Homeland Security (DHS) and the General Services Administration (GSA) also received authorization to establish CSO pilots under Section 880 of the 2017 NDAA. Section 7227 of the 2023 NDAA extended these pilots through September 30, 2027.
The CSO addresses the persistent issue of slow procurement by offering a flexible approach that states broad objectives, allowing diverse solutions to be proposed (typically through issuance of “Areas of Interest” or “Requests for Solutions”). CSOs may lead to either Federal Acquisition Regulation (FAR)-based contracts or non-FAR instruments. Non-FAR instruments include Other Transactions (OTs) (10 U.S.C. §4022), Cooperative Research and Development Agreements (CRADAs) (15 U.S.C. §3710a), Procurement for Experimental Purposes (10 U.S.C. §4023), and bailment agreements. In addition, current subsection (c) of 10 U.S.C. §3458 expressly authorizes follow-on production arrangements for products, services, or items acquired through CSO competitive procedures, including follow-on production contracts, sole-source follow-on production contracts subject to 10 U.S.C. §3204(e), and follow-on production contracts or transactions as defined in 10 U.S.C. §4022.
DoW generally does not intend to use CSOs to acquire well-defined services or supplies, stifle competition, or relieve requirement-holders from defining requirements. Instead, CSOs offer flexibility, enabling the adoption of commercial best practices to reduce barriers and attract new vendors, thereby counteracting the shrinking of the Defense Industrial Base.
The Defense Innovation Unit (DIU) launched the first DoW CSO in 2016. Between 2016 and 2021, DIU awarded 245 vendors a total of 279 CSO-related agreements with a total value of $892.7 million. Notably, 86% of these awards went to nontraditional defense contractors—companies not subject to the cost accounting standards prescribed by 41 U.S.C. §1502.
Tactical Considerations
There are variations in the competitive process used for CSOs. Under the current statute, the review supporting CSO selection may be a peer review, technical review, or operational review, as appropriate to the acquisition. DIU’s CSO follows a three-phase process: (a) whitepaper submission, (b) interactive pitch session, and (c) collaborative requirement and proposal development. The United States Air Force (USAF) Office of Commercial and Economic Analysis uses a two-phase process: (a) whitepaper submission and (b) invitation to propose.
CSOs do not dictate how solutions must be developed but focus on addressing the problem. This broad approach fosters innovation but may make procurement teams uncomfortable due to the unlearning required to execute problem-focused procurements. DIU is leading efforts to train procurement professionals through its Immersive Commercial Acquisition Program, but there remains a shortage of contracting officers familiar with CSOs, which can delay contract awards.
CSOs mandate fixed-price contracts, including fixed-price incentive contracts (10 U.S.C. §3458(d)(1)), which shift more risk to contractors (e.g., performance and cost risk). This reduces the usual burdens of government contracting, such as government-approved business systems, while ensuring accountability. Any appropriation type may be used to fund an action resulting from use of a CSO.
Under 10 U.S.C. §3458(d)(2), notwithstanding 10 U.S.C. §3451(1), products and services acquired using CSO authority are treated as commercial products and commercial services.
CSOs typically accelerate procurement by bypassing detailed specification development, the FAR source selection process, and extensive reviews and approvals. Although CSOs are often compared to the Broad Agency Announcement (BAA) process used for early-stage technology development, they are available for commercial products, commercial services, and nondevelopmental items across a range of maturity levels. CSOs work best when they explicitly describe the interest of the issuing agency and specify the technical data required to meet minimum DoW requirements.
The United States Space Force (USSF) has aligned SBIR contracting with the CSO process and the Government Commercial Purchase Card (GCPC) to conduct pitch days. USSF held a pitch day in 2021 where 366 proposals were reviewed resulting in funding of 46 projects within a budget of $2.5 million. The USSF leveraged the GCPC to immediately fund selected projects (i.e., funding received by the industry partner before the pitch day concluded).
Although DoW has not yet developed a department-wide Center of Excellence (CoE), the USAF maintains an extensive collection of CSO templates and examples in its own CoE on Microsoft SharePoint. The USAF CoE also contains USAF-specific techniques, tactics, and procedures (TTPs). The TTPs include discussion of seven variations of the CSO process including: (a) “open” variations where submissions can be received any time, (b) “closed” where submissions must be received by a set date and time specified in the CSO, (c) “one-step” where technical and price proposals are requested immediately, and (d) “two-step” where the initial requested submission is a whitepaper used to down-select to a limited number of potential offerors from which proposals will be requested.
DoW has published CSO implementation guidance, including limitations, procedures, and notification requirements, at DFARS Subpart 212.70 and DFARS PGI Subpart 212.70. GSA has published CSO implementation guidance in Part 571 of its General Services Acquisition Manual (GSAM) and supplemented this implementation guidance with tactical-level procedures in its CSO Guide. Both may be found at the GSA Procurement Innovation Resource Center. DHS has published a program guide, including procedures for evaluation of proposals and receipt of necessary pre-award approvals.
While CSOs have faced few legal challenges, the Kinemetrics, Inc. v. United States case is notable. In this case, the Court of Federal Claims (COFC) asserted jurisdiction under the Tucker Act to consider Kinemetrics’ protest, which alleged the CSO award decision was “irrational” and “unsupported.” Ultimately, the court deferred to the USAF’s peer review findings, upholding judicial deference to technical evaluators. COFC also reinforced that CSO award decisions deemed arbitrary, capricious, or inconsistent with law could be overturned. While this case may not indicate a trend of increasing legal challenges, it highlights the importance of compliant and thoughtful CSO execution to avoid future disputes and award delays.
References
Statutes:
Public Law 114-328: Section 879 of the 2017 NDAA creates the DoW Pilot; section 880 creates the DHS and GSA pilots.
Public Law 117-81 Section 803 of the 2022 NDAA makes the DoW CSO authorization permanent; codifies at 10 U.S.C. §3458.
Public Law 117-263 Section 7227 of the 2023 NDAA extends the end dates of the DHS and GSA pilots to September 30, 2027.
Public Law 119-60 Section 1823 of the 2026 NDAA amends 10 U.S.C. §3458 to broaden CSO authority to commercial products, commercial services, and nondevelopmental items; permit peer, technical, or operational review; and authorize follow-on production contracts and transactions.
Guidance:
DFARS Subpart 212.70 and DFARS PGI Subpart 212.70: DoW Implementation Guidance
Part 571 of the General Services Acquisition Manual (GSAM) and the GSA CSO Guide: GSA’s implementation guidance
DHS CSO Pilot Program Guide: DHS’s implementation guidance
Analysis of Department of Defense Commercial Solutions Openings, NPS-CM-23-228, Eric W. Washburn and Mary Beth Colaviot. Naval Postgraduate School Acquisition Research Program. June 2023.
The most complete analysis of CSOs currently available.
Commercial Paths for Acquiring Innovative Technologies, Stephen Speciale and Danny Poskey. Defense Acquisition Magazine. May-June 2022.
Includes two fantastic tables: (a) major requirements for using CSO authority, and (b) CSOs currently published by DoW Services and Components.
Department of the Air Force Tactics, Techniques and Procedures for the DoW Commercial Solutions Opening (CSO) Program. Updated July 2024.
Available on the USAF CSO Center of Excellence. Provides recommended best practices for CSO variations, communicating with industry, funding, handling of submissions, and debriefing offerors.
Kinemetrics, Inc. v. United States. United States Court of Federal Claims No. 21-1626. Reissued: September 17, 2021.
Leave a Reply