Program Management

Commercial off-the-Shelf (COTS)

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A Commercial off–the-Shelf (COTS) item is one that 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.

The use of COTS allows the military 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. The use of these items can minimize or eliminate the need for costly, time-consuming, government-sponsored research and development programs.

Federal Acquisition Regulations (FAR)
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

Defense Acquisition Guidebook (DAG)
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.

Topics in the DAG that address COTS include:

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