Program Management

Commercial off-the-Shelf (COTS)

A Commercial off–the-Shelf (COTS) item is sold, leased, or licensed to the general public; offered by a vendor trying to profit from it; supported and evolved by the vendor who retains the Intellectual Property (IP) rights; available in multiple identical copies; and used without modification of the internals.

Definition: Commercially off-the-Shelf (COTS) is hardware or software product that already exists in the commercial market and is available for sale to the general public.

Benefits of using Commercial-off-the Shelf-(COTS)

The use of COTS allows a product developer to take advantage of technological advances, cost savings, and rapid procurement stemming from the competitive pressures of the commercial marketplace as well as developments in other DoD or government agencies. Using these items can minimize or eliminate the need for costly, time-consuming, government-sponsored research and development programs.

The benefits of using COTS components are:

  • Reduce cost
  • Reduce development time.
  • Allow faster insertion of new technology.
  • Lower life-cycle costs by taking advantage of the more readily available and up-to-date commercial, industrial base

Disadvantages of using Commercial-off-the Shelf-(COTS)

A Program Manager (PM) and development staff will still have to go thru the normal test and evaluation process to verify that a COTS product can still meet the requirements of the overall system.  Just because a COTS solution is preferred,  in some cases, it will not meet the intended goals of the system.

The primary concerns of using COTS are:

  • Is the COTS component durable enough to meet service life requirements
  • Is there proprietary components in the COTS products
  • Lack of vendor willingness to provide all design specifications due to intellectual property theft concerns.
  • Types of the licensing agreements
  • Can enough COTS products be supplier for sustainment
  • How difficult is it to find replaceable parks for the COTS product
  • Are there enough qualified vendors for the COTS product
  • Does the COTS product require modifications and how much

Federal Acquisition Regulations (FAR) for Commercial off–the-Shelf (COTS)

Subpart 2.101 – Definitions Commercially available off-the-shelf (COTS)” item

  1. Means any item of supply (including construction material) that is
    • A commercial item (Item that can be sold, leased, or licensed to the general public);
    • Sold in substantial quantities in the commercial marketplace; and
    • Offered to the Government, under a contract or subcontract at any tier, without modification, in the same form in which it is sold in the commercial marketplace; and
  2. Does not include bulk cargo, as defined in section 3 of the Shipping Act of 1984 (46 U.S.C. App. 1702), such as agricultural products and petroleum products.

FAR Subpart 12.103 – Commercially available off-the-shelf (COTS) items

Unless indicated otherwise, all of the policies that apply to commercial items also apply to COTS. Section 12.505 lists the laws that are not applicable to COTS (in addition to 12.503 and 12.504); the components test of the Buy American Act and the two recovered materials certifications in Subpart 23.4, do not apply to COTS

Acqnotes Tutorial

Modification to Commercially available off-the-shelf (COTS) items

Modifications to COTS products may lose the intent of using COTS in the first place. A resulting modification might cause the product to lose the ability for a vendor to upgrade the product or find suitable replacement parts. Modifying COTS items can prove more costly and timely than developing a new product from scratch. Most vendors are not supportive of having their products modified too.

Evaluating the use of Commercially available off-the-shelf (COTS) items

The Program Manager and development team should do their due diligence when deciding whether or not to use COTS products in their system. COTS are very attractive to most developers for their cost and schedule saving but they might cost more in the long run. So when evaluating them try to evaluate the COTS product try to understand:

  • What is the overall lifecycle cost for the COTS product
  • What is the  intended environment the COTS product will be used and was it designed for this environment
  • Is there enough design documentation about the COTS product to understand if it will meet system requirements
  • Are there any Foreign-Owned issues with a product
  • What are any supportability issues with the COTS product
  • What are the intellectual property rights
  • Do you have the ability to modify the COTS hardware or software and difficult is it
  • Can you adequately test the COTS products

Developing a Commercially available off-the-shelf (COTS) Strategy

A Program Manager should utilize COTS products to the best of the system’s ability to meet the requirements. Part of the overall acquisition strategy should address the goal of utilizing COTS products and the key components that need to be addressed.

  1. What are the requirements for use of COTS products
  2. Determine the need for COTS data right
  3. Assess technical feasibility for use of COTS and NDI in the system.
  4. Develop an open system architecture design to promote the use of COTS
  5. Evaluate the use of COTS design trade studies
  6. Identify verification requirements for COTS
  7. Determine supportability requirements for COTS items
  8. How to document the use of COTS

Commercial off-the-shelf (COTS) Obsolescence

Commercial off-the-shelf (COTS) obsolescence is the problem that COTS parts or systems might become obsolete or unavailable in the future. This can make things very hard for project managers and designers who use COTS options in their projects. When using COTS technology, it’s important to consider the product’s lifecycle, the vendor’s assistance, and the trends in the industry. If a system becomes obsolete, project managers should be ready to offer customized help or build a new system to replace it. To reduce the risks of COTS obsolescence, it is important to keep in touch with sellers, keep a close eye on product updates, and have backup plans ready.

Defense Acquisition Guidebook (DAG)

The use of COTS items offers significant opportunities for reduced development time, faster insertion of new technology, and lower life-cycle costs, owing to a more robust industrial base. Maximum use of commercially mature technology provides the greatest opportunity to meet program cost, schedule, and performance requirements and is consistent with an evolutionary acquisition strategy. The program manager should pay particular attention to the intended product use environment and understand the extent to which this environment differs from (or is similar to) the commercial use environment.

Software Commercially off-the-shelf (COTS)

Modifying the core code of a Commercial off-the-Shelf (COTS) product should be avoided. It is possible to add code to the existing product to make it operate in a way it was not intended to do “out-of-the-box.” This, however, significantly increases program and total life-cycle costs and turns a commercial product into a DoD-unique product. The business processes inherent in the COTS product should be adopted, not adapted, by the organization implementing the product. Adopting a COTS product is done through business process reengineering (BPR). This means the organization changes its processes to accommodate the software, not vice versa. In many cases, there will be a few instances where BPR is impossible. [1]

Program Management Topics that Address Commercially available off-the-shelf (COTS)

Topics in program management and acquisitions that address COTS include:


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Updated: 7/8/2023

Rank: G9

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