The good news is that Commercial
off-the-shelf (COTS) utilization in the U.S. has met many of its
initial goals. We have engendered cost reduction, performance
improvement, and accelerated our development cycles to match
commercial technology. The bad news is that we have created as much
complexity as COTS has simplified, especially in large-scale weapon
and electronic system development.
Less than 10 years ago, U.S. Defense Secretary Bill Perry
sponsored the Strategic Acquisition Initiative (SAI) that brought
COTS to a full mandate. And we have made progress. But then so has
technology, moving at far greater speeds than it did 30 years ago.
For example, over the course of a single defense and military
program the COTS microprocessors chosen five years ago have
advanced multiple generations and their speed has increased by a
factor of 10. We have to factor this rate of change into COTS
products and into COTS program lifecycles. This technology
insertion and its concomitant obsolescence management constitute
some of the major issues facing future COTS work.
From '72 Till Now
In 1972, Bob Costello, then the Deputy Director of Defense,
coined the acronym COTS to describe a shift in military procurement
priorities and practices. This was the beginning of the initiative
to decrease costs and shorten development cycles for military and
weapons systems. Since then, companies targeting military markets
have struggled to balance the needs of government/military
agencies, the capabilities of the defense contractors, and the
advanced technology for COTS compliance, mandated by U.S. law.
During the 1980s business trend of rightsizing, these companies
focused on their core strengths and streamlined their organizations
accordingly. This fueled the need for outsourcing and for COTS
products and technologies. In this era, the aerospace companies'
downsizing was especially beneficial for commercial electronics and
computer companies whose products replaced the proprietary systems
previously developed and deployed by defense
As recently as five years ago, defense contractors spent 11% of
their budgets on outsourcing component and subsystem requirements.
Today, the outsourcing percentage has risen to 70%, and the success
of many COTS suppliers is due wholly or at least in part to this
paradigm change within the community. Contractor's acceptance of
the rightsizing trend opened up a $55 billion market to COTS
Both Government agencies and defense contractors select COTS
suppliers for projects or programs. Here are some of the key
costing elements considered in selecting COTS suppliers:
- Initial product price
- Maintenance costs
- Operational costs
- Training costs
- Installation costs
- Software change/upgrade costs
- Software tools (system design and models) costs
- Technology costs
- Software integration costs
- Fault isolation/redundancy costs
- Support (integrated logistics support, sparing, test and
repair, and documentation) costs
- Planned product improvement and lifecycle installation
- Interchangeability of hardware/software architecture, form fit,
function, replacement, and expandability capabilities
- Supplier longevity and financial stability
- Risk mitigation
- Past performance.
In their business models, most COTS suppliers are able to
provide statistics on only a few of these elements. The
Government's supplier ideal, is one that focuses on most or all of
In 1991, Perry initiated the SAI, which mandated that U.S.
Defense contractors must look to COTS as the first consideration in
program development. Only then, if there is no commercial solution
available, can they justify a custom development. Reviewing
commercial alternatives vs. custom development is a common
occurrence in full mil-spec programs.
While the SAI and outsourcing initiatives drive the expansion
and adoption of COTS, changes in the worldwide political climate
shifted the priorities and funding allocations for the defense
community. Instead of targeting the global threat of one or two
superpowers, the U.S. Department of Defense (DoD) has moved toward
evaluation and preparedness of multiple regional threats from
This lack of a centralized threat has led to decreased defense
budgets in the U.S. It has also generated a movement to limit
large-scale production of new weapons systems. Consequentially,
current procurement programs have shifted to modernization, to
technology insertion and updates to existing systems, and to
smaller quick start programs addressing the narrower regional
threats. The effect on COTS is that these efforts demand rapid
development and deployment of upgrade and modernization
Outside of the U.S., COTS is not mandated. The concept of
utilizing standard off-the-shelf products has gotten varying
amounts of support and is in various stages of adoption. Australia
and many Western European countries have embraced similar concepts
and are using COTS in both the development and deployment phases of
The highly industrialized countries in Asia historically have
taken a cautious approach to the adoption of COTS. But recently,
demand in Japan, Singapore, Korea, and China has accelerated for
COTS in their development systems. Deployment for most Asian
programs is handled by having the contractor license technology
from the COTS supplier.
One of the key problems in COTS is the disparity in the length
of each player's product lifecycles. The typical COTS suppliers'
product lifecycle is two to three years. However, the typical
defense contractors' program lifecycle is 7 to 15 years. And the
typical Government program lifecycle and sustainable platform life
is 25 to 40 years. This lifecycle disparity has forced the defense
contractors and the COTS supplier base to look more closely at the
costs of obsolescence management and technology insertion.
The fact is that most defense contractors incur 60-70% of their
costs after initial deployment in the form of maintainability,
reliability, and supportability programs. Thus, it is critical that
Defense contractors consider these program issues when choosing a
COTS supplier. More importantly, only the hardware costs are easily
quantified, but the majority of lifecycle costs are
software-related. Environments and tools that emphasize software
portability without expensive and labor intensive rewrites and
re-optimization are crucial.
The U.S. DoD has realized that the program lifecycle needs to
look toward shorter design/insertion cycles. And that successive
refinements, rather than a series of point-designs, is the best
approach to fit the COTS model.
Low startup costs and the need for continuity between
generations of a product design were historically the reasons for
the success of COTS programs. The rapid prototyping and accelerated
implementation capabilities that COTS brings to the defense
contractors' programs are now regarded as its real benefit.
From the defense contractor's perspective, its basic cost
considerations are similar to those of its Government customer.
However, profit motive and competitive pressures come into play at
this level, adding complexities to the selection of COTS suppliers.
One result has been that it is the long-range upgrade plan,
software development, and maintenance costs that have the most
impact on the potential profit that can be realized.
Software development can represent a $15-20 million,
multigenerational investment, with maintenance adding $2-3 million
over and above that. To keep overall lifecycle costs in check, the
management of upgrade costs, proven software portability, and reuse
have now become the key elements in COTS supplier selection. If
defense contractors are unable to get realistic predictions of cost
performance from their COTS suppliers, both for initial deployment
and over the program lifecycle, they should look elsewhere for a
Forging and fostering strategic partnerships that span the
program lifecycle is one of the ways to ensure that the COTS
initiative can work in the marketplace. The COTS supplier base must
now focus on methods for containing upgrade costs and providing a
path for continuous cost reductions over the program lifecycle.
These approaches must be standard considerations and be reflected
in proposals obtained from the COTS source. The realization of the
COTS promise is to merge cost-reduction with the vision of an
adaptable family of products and flexible methods of doing business
across the program lifecycle. Without this, the COTS initiative
will fail in the long-term.
COTS in Harsh Environments
Many of today's military/defense programs use commercial
components with commercial-level cooling, operating temperatures,
and shock and vibration ranges. Ground-based radar systems,
receiving sonar systems, and some airborne applications utilize
COTS without consideration for harsh or rugged environments.
However, more and more weapon systems are being deployed with
increasingly sophisticated computer subsystems that require this
While, each rugged COTS computer vendor has its own nomenclature
for building boards and subsystems for harsh environments, the
requirements for ruggedization fall into four main categories:
- Commercial components with no enhancements beyond the
manufacturer's specifications. These systems are usually used in
lab environments, or development platforms, and can be deployed in
- When a project requires an extended temperature range
(-20°C to 65°C) and is subject to increased vibration,
boards are conformally coated and fitted with a central stiffening
- In deployed environments, such as fighter aircraft, where
temperatures and vibration are more extreme, additional measures
are taken for operation in very harsh environments. Beyond the
central stiffener and conformal coating, additional stiffeners are
added to accommodate vibration levels. At this level, conduction
cooled designs can be used to accommodate the temperature
requirements of -40° to 85°C.
- In very harsh environments where temperatures range from
-62° to 125°C, compliance to the full mil-spec standard
Each COTS supplier has a different approach to ruggedizing its
products. The specialized technologies employed by vendors that
develop products for extremely harsh environments result in
products that are expensive and typically do not keep pace with the
industry's standard price/performance ratio (Moore's Law). In terms
of performance per dollar, per watt, and per square inch, the
design goals of these technologies are focused on different
The companies that specialize in high performance embedded
computing such as SKY Computers, generally utilize third-party
partners to provide several levels of rugged high performance
computer systems to their customers. This partnering enables SKY
and others to provide a family of COTS lifecycle products.
A COTS solution with full lifecycle support is needed. However,
vendors have routine adaptations to standard COTS products by
reformatting, repackaging, or by delivering program-specific
enhancements. Programs with needs that are not fully met by COTS or
by hybrid solutions can be addressed with technology licensing,
strategic partnerships, or co-technology developments between the
vendor and its design partners. These approaches can often provide
the best solution for defense contractors by minimizing development
costs and creating a consistent flow of technology solutions.