NDAA: Massive expansion of commercial solutions openings and other key takeaways for defense contractors

"Expanded use of commercial solutions openings Section 1823 of the NDAA may prompt a monumental shift in defense acquisition. Revisions to 10 U.S.C. § 3458 allow DOD and the military departments to use commercial solutions openings to acquire products and services. This is a notable expansion; previously CSOs were limited to "innovative" commercial solutions. With the removal of this qualifier, CSOs can now be used as a general commercial acquisition tool."

"Furthermore, the revisions allow the government to award a follow-on production contract from such a CSO on a sole source basis. Thus, as long as the CSO was openly competed, the awardee of a CSO for a commercial product or service would be eligible for a sole-source follow-on production contract. Making this option even more attractive to industry is the fact that the awarded contracts can be Other Transaction Authority Agreements, or OTAs, rather than traditional procurement contracts."

The 2026 NDAA expands commercial pathways into defense acquisition by broadening the use of commercial solutions openings (CSOs), removing the prior "innovative" qualifier so CSOs can serve as a general commercial acquisition tool. The revisions permit sole-source follow-on production awards to CSO winners when the CSO was openly competed. Awarded contracts can take the form of Other Transaction Authority Agreements (OTAs), which are outside the Federal Acquisition Regulation and allow negotiated provisions including IP and data rights. Section 1806 raises thresholds and reduces the number of contracts subject to cost accounting standards, alleviating major compliance burdens for many contractors.

Read at Nextgov.com