10.1.1 Commercial-Off-The-Shelf (COTS) and Nondevelopmental Item (NDI)
(COTS) and Nondevelopmental Item (NDI) Considerations
Under the current military acquisition reform initiatives, the
Department of Defense is advocating the use of Commercial-Off-The-Shelf (COTS)
and Nondevelopmental Items (NDI) in the products it acquires for military
applications. Commercial industry has long used NDI in building new products.
NDI is any previously developed item used exclusively for government purposes by “federal agency, a state or local
government or a foreign government with which the US has mutual defense cooperation agreement.” 1
COTS are items available in a
domestic or foreign commercial marketplace. The increased emphasis on
commercial products and practices has occurred for a number of reasons. First,
the decrease in military spending over the last decade has resulted in an
erosion in the industrial base that existed to support development of weapon
systems. Second, while technology was driven primarily by the DoD in the past,
this is no longer the case. Third, many technologies (e.g., electronics,
information, communications) are advancing at such a rapid pace that the
government can no longer afford an acquisition process that has historically
required at least a 2-3 year cycle to develop, test, and field a
The objective of using COTS/NDI is
to reduce the development time and risk associated with a new product by
reducing or eliminating new design and development, thereby capitalizing on
proven designs. Whether it is the government or a private commercial company,
using COTS/NDI can potentially reduce costs, risks, and acquisition time.
However, some compromises in the required functional performance (including
reliability) of the product may be necessary, and other issues, such as
logistics support, must also be considered. The decision to use COTS/NDI must
be based on a thorough evaluation of its ability to perform the required
function in the intended environment and to be operated and supported over the
planned life of the product.
A product that is new in every
aspect of its design carries with it cost, schedule, and performance risks.
These risks are usually high for such a product because of all the unknowns
surrounding a totally new design. A product development involving a completely
new design is considered revolutionary in nature.
In contrast to a completely new
design (revolutionary approach), using a proven product or incorporating
proven components and subsystems in a new product is an evolutionary approach.
Using COTS/NDI is a way to follow a pattern of new product development in
which new design is minimized or eliminated. Some types of NDI
Items available from a domestic
or foreign commercial marketplace
Items already developed and in
use by the U.S. government
Items already developed by
COTS/NDI items may constitute the entire product (e.g., a
desktop computer) or they may be components or subsystems within the product
(e.g., displays, power supplies, etc., used within a control system). The
advantages and disadvantages of using COTS/NDI are summarized in Table
The use of commercial items in military systems is no longer a
question of “yes or no” but a question of “to what degree.” A pictorial
presentation of the commercial/ NDI decision process is shown in Figure 10.1-1
taken from SD-2. The R&M activities needed for COTS/NDI are different than
for new development items, as shown in Table 10.1-3. These considerations are
discussed in more detail in the following paragraphs.
For new development programs, the customer imposes reliability
requirements in the system specification and development specifications. (In
addition, prior to Acquisition Reform, the customer stipulated in the
statement of work which tasks the contractor would conduct as part of the
reliability program and how (by imposing standards) the tasks were to be
With commercial items and NDI, the basic product is already
designed and its reliability established. Consequently, the reliability
assessment should be an operational assessment of the military application in
the expected military environments. Since the basic design of a commercial or
nondevelopmental item cannot be controlled by the buyer, the objective is to
determine whether well-established and sound reliability practices were
applied during the item’s development.
When considering the use of COTS/NDI equipment, much work needs
to be done up front in terms of market research and development of minimum
requirements. This means that procurement offices must work closely with the
end user to define the minimum acceptable performance specifications for
R&M. Market research then needs to be performed to see what COTS/NDI
equipment exists that has the potential of meeting defined requirements at an
The challenge for market research is obtaining R&M data on
COTS/NDI equipment. COTS vendors may not have the kinds of data that exist in
military R&M data collection systems. (Text continues after Tables 10.1-1
and 10.1-2 and Figure 10.1-1).
TABLE 10.1-2: ADVANTAGES AND DISADVANTAGES OF
|Technical, Schedule, and Financial
||Decreased technical, financial, and schedule
risks due to less new design of components and subsystems. Ideally no
research and development costs are incurred.
||When NDI items are used as the components and
subsystems of a product, integration of those items into the product can
be difficult, expensive, and time-consuming.|
||There is increased confidence due to
established product performance and the use of proven components and
||Performance trade-offs may be needed to gain
the advantages of NDI. Integration may be difficult.|
||In similar applications, proven ability to
operate under environmental conditions.
||In new applications, may require
modifications external or internal to the equipment to operate.|
||Ability to capitalize on economies of scale,
state-of-theart technology, and products with established quality.
||There may not be a perfect match between
requirements and available products.|
||Quick response to an operational need is
possible because new development is eliminated or minimized.
||Integration problems may reduce the time
||If already in production, processes are
probably established and proven.
||Configuration or process may be changed with
no advance notice.|
||There is no need for (large) inventory of
spares because they can be ordered from supplier.
||The long-term availability of the item(s),
particularly COTS, may be questionable.|
||No organic support may be required (probably
not possible). Repair procedures and rates are established.
||Supplier support or innovative integrated
logistics support strategies may be needed to support the
TABLE 10.1-3: R&M
ACTIVITIES FOR NEW DEVELOPMENT
ITEMS AND FOR COTS
TYPE OF ITEM
||Develop requirements based on user needs and
technology being used. Estimate achievable level of R&M.
||Limited to verifying manufacturer
|Understand the Design
||Perform FMEA, FTA, and other analyses for
entire design. Conduct design reviews. Develop derating criteria. Conduct
||Limited to integration and any
||Analyze design to determine correct parts
application for robust design. Identify needed screening.
|Validate the Design
||Conduct extensive development testing that
addresses all aspects of the design. Identify design deficiencies and take
corrective action. Establish achieved levels of R&M.
||Limited to what is needed to verify
manufacturer claims and to validate integration or required modifications
based on the intended environment.|
||Design manufacturing processes to retain
inherent R&M. Implement statistical process control and develop good
||None if the item is already in production.
Otherwise, design the manufacturing process to retain the inherent design
FIGURE 10.1-1: THE COMMERCIAL/NDI DECISION PROCESS
If design documentation is available, specific R&M tasks,
such as prediction and failure modes and effects analysis, may be part of the
COTS/NDI evaluation process. Because the prime military contractor is not
likely to be the COTS/NDI vendor in this case, both the government and the
prime will need to perform the evaluation i.e., a cooperative effort should
exist between the two parties.
The amount of testing required to verify that a commercial item
or NDI meets the operational requirement is governed by whether the item will
be used in the environment for which it was designed and by operators with
skills equal to the operators for which it was designed. What may be needed is
to require the supplier to furnish operational and environmental
characterization data and the results of testing to substantiate reliability
and maintainability claims. Also, it may be necessary to require the supplier
provide some evidence that the manufacturing processes do not compromise the
designed-in reliability and maintainability characteristics. This evidence may
include the results of sampling tests, control charts showing that critical
processes are in control with a high process capability, and so
1 SD-2, Buying Commercial and Nondevelopment Item:
A Handbook, Office of the Assistant Secretary of Defense for Production and
Logistics, April 1996.