Using COTS To Maximize Value For Money

Last Updated Jan 11, 2010 5:57 AM EST

The U.S. Department of Defense buys a great deal of equipment and services. Many of these are similar to what a commercial entity would procure especially when it comes to products that provide personnel, administrative and support. Despite the conditions in which they operate much of what DoD and the Services need may be met by companies and products that are not necessarily made to military specifications.

The actual regulations governing defense acquisition encourage the use of commercial products when they meet the needs of a requirement. Commercial Off The Shelf (COTS) is a concept that is actually exactly what it sounds. You buy an existing developed product. Laws also guarantee that the Feds will pay the lowest price available as the company has to justify it is offering the best price it did to any commercial customer.

The U.S. military also relies heavily on satellites for communication and data transfer. Now they are about to let one of the largest COTS contracts. A twenty year one to provide commercial satellite bandwidth and services. If the full contract is executed it could be worth over $14 billion.

The Future Comsatcom Services (FCS) is a plan where all government needs for these services are going to be combined. This includes even the state and local government requirements. The idea as with so many government contracts such as the GSA schedule is that by buying massive bulk orders the unit cost will be low. Right now the different services and defense agencies buy their own needs through multiple contracts.

Since the U.S. military is struggling to meet its needs with existing satellites various programs are underway to develop newer, more powerful one. The ambitious Transformational Satellite (TSAT) was canceled by the new Obama administration due to cost and schedule issues. The Wideband Gapfiller System (WGS) is being made as is the existing Advanced Extremely High Frequency (AEHF) systems.

The goal of the FCS is to allow a stable program where the civil companies will know how much is being bought each year through a series of one year contracts. It will also drive some upgrades to capabilities and infrastructure if the DoD is planning on buying so much bandwidth each year. This will not only benefit the Government and the satellite companies but also their commercial customers. The investment in the overall system to include new satellites will be a boon to the whole world's economy.

COTS works best when there is an established civil product or service that meets the needs of the military. It avoids lengthy development costs and should be able to be delivered quickly. The only concern would be that the Government's needs are such that they deprive the commercial market of the service or product. This could lead to price increases for other customers. In this case using civil systems is appropriate especially as a stop gap effort while DoD completes their development and investment in their own upgraded systems and capability. The United States also has several different companies like Globalstar and SES that could benefit from these large orders.

  • Matthew Potter

    Matthew Potter is a resident of Huntsville, Ala., where he works supporting U.S. Army aviation programs. After serving in the U.S. Navy, he began work as a defense contractor in Washington D.C. specializing in program management and budget development and execution. In the last 15 years Matthew has worked for several companies, large and small, involved in all aspects of government contracting and procurement. He holds two degrees in history as well as studying at the Defense Acquisition University. He has written for Seeking Alpha and at his own website, DefenseProcurementNews.com.