Commercial Off-The-Shelf(COTS)
Products or software readily available in the commercial marketplace, sold without modification and procured under streamlined FAR Part 12 procedures.
Overview
Commercial Off-The-Shelf (COTS) refers to products, software, or technology that are commercially available to the general public without modification. The federal government's preference for COTS solutions — codified in the Federal Acquisition Streamlining Act (FASA) and FAR Part 12 — aims to reduce development costs, leverage market innovation, and simplify procurement by using proven commercial items rather than custom-built alternatives.
Why It Matters in GovCon
The government's COTS-first policy means agencies are required to consider commercial solutions before developing custom ones. This creates opportunities for commercial technology companies to sell existing products to the government under simplified procedures, while also pressuring traditional defense contractors to incorporate commercial components into their solutions.
Key Details
- FAR Part 12: Streamlined procedures for acquiring commercial items reduce administrative burden and procurement timelines.
- COTS vs. GOTS: COTS is commercially developed; Government Off-The-Shelf (GOTS) is developed by or for the government.
- Preference: Agencies must conduct market research and consider COTS solutions before pursuing custom development.
- Modifications: Minimally modified COTS products may still qualify as commercial items if modifications are customary in the marketplace.
- Examples: Commonly includes enterprise software (Microsoft, Oracle, ServiceNow), networking equipment, and cloud services.
Related Terms
- Commercial Item
- FAR Part 12
- Market Research
- Government Off-The-Shelf (GOTS)
More Contracts Terms
A simplified method of filling anticipated repetitive needs for supplies or services by establishing charge accounts with qualified vendors.
A numbered item in a contract that identifies a specific deliverable, service, or unit of work along with its quantity and price.
A contract type where the government reimburses the contractor for allowable costs plus a predetermined fixed fee representing profit.
An order placed against an existing contract for the delivery of supplies or materials.
A contract type where the price is set at award and does not change regardless of the contractor's actual costs, placing maximum risk on the contractor.
Long-term government-wide contracts with commercial firms that provide federal agencies access to products and services at pre-negotiated prices.
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