Contracts & Legal

Commercial Solutions Opening

A Commercial Solutions Opening (CSO) is a merit-based source selection strategy for the Department of Defense (DoD) to acquire innovative commercial items, technologies, or services that directly fulfill requirements, close capability gaps, or provide potential technological advances. It’s focused on businesses or institutions that have “not traditionally” done business with the U.S. Government. CSOs are similar to Broad Agency Announcements (BAA) but allow for acquiring technology directly relevant to a specific program, unlike BAAs which are restricted to only basic and applied research and that portion of development not related to a specific system or hardware program. CSO was authorized by Section 879 of the FY17 National Defense Authorization Act (NDAA).

Commercial Solutions Opening (CSO) is a non-Federal Acquisition Regulation (FAR) based solicitation authority for acquiring innovative and commercial solutions.

Each proposal submitted under a CSO is evaluated on its individual merits rather than on a comparative basis, and the Government has considerable latitude in determining which of the submitted proposals it will fund. Inefficient processes add complexity, cost, and time and are removed during CSO.

DoD innovation hubs (e.g., Defense Innovation Unit Experimental (DIUx)) have adopted the model to move at the speed of business to match Silicon Valley counterparts.

Purpose of Commercial Solution Opening (CSO)

The purpose of CSO is to reduce barriers of entry for non-traditional contractors to provide innovative commercial items, technologies, or services that directly fulfill requirements, close capability gaps, or provide potential technological advances.

Benefits of Commercial Solutions Opening (CSO)

The benefits of the CSO strategy include: [1]

  • Simpler contract terms
  • Attracted new companies
  • A streamlined application process requiring only minimal corporate and technical information
  • Fast track evaluation timelines for solution briefs; with notification made, in most cases, within 30 calendar days of topic closure
  • Negotiable payment terms
  • Capital is non-dilutive
  • All intellectual property (IP) rights are negotiable and the Government does not plan to own any IP
  • Direct feedback from operators, customers, and users within the DoD to help product teams develop and hone product design and functionality
  • Potential follow-on funding for promising technologies and sponsorship of user test cases
  • Can be used as either FAR or non-FAR based solicitation method

Contracting for Commercial Solutions Opening (CSO)

CSO can use either use Other Transactions (OT) contracts or FAR-based fixed-price contracts (but not cost-reimbursable).

Commercial Solutions Opening (CSO) Limitations

The following are the main limitations of using a CSO. These limitations are:

  • Can only be used on fixed-price or fixed-price incentive contracts
  • Awards exceeding $100 million require approval from USD A&S or military service acquisition executive
  • September 30, 2022 authority expiration
  • No competition requirement required

Commercial Solution Opening (CSO) DFARS Statement

DFARS Subpart 212.2 – Special Requirements for the Acquisition of Commercial Items: “See DoD Class Deviation 2018-O0016, Defense Commercial Solutions Opening Pilot Program, issued June 26, 2018. This class deviation allows the contracting officer to acquire innovative commercial items, technologies, or services using the competitive procedure outlined in the class deviation called a commercial solutions opening (CSO). Use of a CSO is authorized by section 879 of the National Defense Authorization Act for Fiscal Year 2017 (Pub. L. 114-328). Under a CSO, DoD may competitively select proposals received in response to a general solicitation, similar to a broad agency announcement, based on a review of proposals by scientific, technological, or other subject matter experts. This class deviation remains in effect until September 30, 2022”

How are Commercial Solutions Opening (CSO) different from Other Transaction Agreement (OTA)

An Other Transaction Authority (OTA) is a “legally binding procurement agreement” between government and industry authorized for scientific research, technology development, and prototype projects. Commercial Solutions Opening (CSO) is a “solicitation method” that can be either non-FAR or FAR-based.

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Updated: 8/26/2021

Rank: G4.5