COTS Supportability Across the Program Lifecycle—A Vendor's View of COTS' Evolution in the DoD Market

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.

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 contractors/integrators.

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 suppliers.

	Choosing a COTS Supplier 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 Disposal 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 costs 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 these elements.

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 smaller nations.

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 programs.

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 their programs.

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 Supplier.

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.

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 consideration.

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:

1. 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 benign environments.
2. 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 bar.
3. 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.
4. In very harsh environments where temperatures range from -62° to 125°C, compliance to the full mil-spec standard is mandatory.

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 targets.

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.