How OTAs and CSOs are Enabling the New Warfighting Era

To outpace emerging threats, the Department of Defense (DOD)/Department of War (DOW) is reshaping federal acquisition by championing Other Transaction Agreements (OTAs) and Commercial Solutions Openings (CSOs) that bring innovation to the warfighter at the front lines faster. This change embodies the administration’s intent to take a more offensive posture in meeting warfighter needs; one that challenges the acquisition community to move faster, think creatively, and embrace innovation as a core mission imperative.

DOD’s Rationale for Using OTAs and CSOs

On November 7, 2025, Secretary of Defense Pete Hegseth announced a sweeping transformation of the DOD’s acquisition system, with complete implementation guidance expected within 180 days. The DOD is acting with unprecedented urgency, and this transformation will influence every active and future solicitation. The intent is clear: accelerate procurement, expand competition, reduce regulatory drag, and make commercial technology the default for meeting defense needs.

To support this shift, contracting officers are issuing multiple requests for information (RFIs) to determine whether commercial products can meet mission requirements. This once-routine process now serves as a critical validation step in the new acquisition approach.

Underscoring this momentum, Secretary Hegseth declared,“Speed-to-delivery is now our organizing principle.” For acquisition professionals, this statement marks a fundamental cultural reset. Historically, large-scale programs required 2 to 3 years of preparation to issue a solicitation. Even then, timely awards were far from guaranteed. To mitigate delays, agencies began issuing 10-year contracts rather than 5-year terms.

That mindset no longer fits the mission. Under the emerging Warfighting Acquisition System (the successor to the legacy Defense Acquisition System), speed, innovation, and operational readiness are the new benchmarks of success.

DOD’s “Commercial First” Priority

A defining element of the new Warfighting Acquisition System is the DOD’s shift to a “Commercial First” contracting philosophy. Over the past three decades, industry has outpaced the U.S. government in research and development by more than $300B annually. Rather than trying to replicate this innovation internally, DOD is now directing its acquisition workforce to use proven commercial technologies first and build only when no viable market solution exists. This approach serves two strategic purposes:

• Expanded access to innovation. It opens the door for small businesses with breakthrough technologies that cannot navigate traditional acquisition barriers.
• Integrated cross-domain capabilities. It allows large corporations that operate across multiple mission areas to bring mature, commercially funded solutions directly into the defense ecosystem.

By adopting a “Commercial First” mindset, DOD can harness the speed, investment, and creativity of the private sector to transform the way the nation equips its warfighters for the challenges ahead.

DOD’s Charge to Use OTAs and CSOs

The new Warfighting Acquisition System is directing all DOD agencies and services to use OTAs and CSOs wherever feasible and mission-appropriate. A formal policy framework and accompanying regulations are expected to be issued within the next 90 days, signaling a decisive move toward agility and innovation across the acquisition enterprise.

While OTAs have existed for decades, their use was historically limited to research and academic initiatives. Today, they are being elevated as a cornerstone of rapid prototyping and capability development, particularly for engaging non-traditional defense contractors who can deliver breakthrough technologies outside the constraints of the Federal Acquisition Regulation.

However, this shift also exposes a readiness gap. Many acquisition professionals, including contracting officers (COs), contracting officer representatives (CORs), and program managers (PMs), have received only limited exposure to OTAs and CSOs, often through basic Defense Acquisition Workforce Improvement Act (DAWIA) training modules. To realize the full potential of these tools, DOD personnel must move beyond theory and gain hands-on experience in applying OTAs and CSOs to real-world acquisition challenges.

The Emergence of OTAs and CSOs

The resurgence of OTAs began in 2016 with the creation of the Defense Innovation Unit-Experimental (DIUx), a DOD initiative headquartered in Silicon Valley to strengthen collaboration with the nation’s most innovative technology ecosystem. The goal was clear: identify and rapidly acquire cutting-edge commercial capabilities to meet urgent defense needs.

However, DIUx quickly encountered the full weight of the traditional acquisition bureaucracy. For small companies, waiting 12 to 24 months for potential government funding was untenable. Recognizing these barriers, the 2016 Defense Policy Bill expanded the DOD’s statutory authority to use OTAs, allowing agencies to transition successful prototypes directly into production through streamlined, sole-source contracts.

To complement this flexibility, DIUx pioneered the CSO process, which enabled the government to purchase commercial technology at scale. The success of this model drew widespread attention, prompting other federal agencies and military services to embed personnel at DIUx headquarters to learn the CSO process and replicate it within their own organizations.

In 2017, I had the opportunity to work on-site with DIUx to establish both an OTA and a CSO framework. The effort faced significant cultural resistance, ranging from entrenched leadership skepticism to funding constraints and institutional “mission rice bowls.” Yet, with strong executive backing, the initiative succeeded. Within months, we stood up a fully operational OTA and subsequently launched a CSO, laying the groundwork for the agile acquisition practices now spreading across DOD.

How Companies and Government Can Excel in the New OTA/CSO Environment

With more than 27 years of experience in the defense acquisition system and deep expertise in OTA and CSO contracting, I am encouraged by the direction of the new Warfighting Acquisition System. Its goal of eliminating unnecessary bureaucracy and accelerating delivery to the warfighter represents a long-overdue evolution in how the government buys innovation. However, success will depend on preparation, education, and adaptability across both government and industry, as summarized in the recommendations below.

Recommendations for Companies

• Learn the process. Business developers, capture managers, and proposal professionals must master the fundamentals of OTAs, CSOs, and Broad Agency Announcements (BAAs). These mechanisms will increasingly shape competitive strategy.
• Designate internal experts. Appoint dedicated OTA, CSO, and simplified acquisition specialists who can support all divisions and serve as corporate focal points for agile contracting.
• Leverage internal innovation. Identify prototypes, technologies, and commercial products already developed across the enterprise. Establish a shared product database so all business units can access and align around existing capabilities.
• Build white papers and pitch briefs. Develop concise, persuasive materials that demonstrate how your solutions solve government mission problems. These are critical for engaging in OTA, CSO, and BAA processes.
• Engage early and often. Track OTA and CSO announcements and respond quickly to commercial solicitations. Submit white papers to standing BAAs and RFIs to shape requirements and validate commercial viability.
• Prioritize agility. The volume of RFIs will increase dramatically. Firms that can rapidly tailor responses and align commercial products to government needs will maintain a decisive edge.

Recommendations for Government

• Mandate training. COs, CORs, and PMs must receive mandatory training on OTAs, CSOs, and BAAs—not as theory, but through applied, hands-on instruction.
• Build in-house expertise. Each division should designate OTA and CSO specialists to guide program teams. A single expert for an entire agency is insufficient for the scale of transformation underway.
• Define real-world challenges. Document mission problems early and use OTA and CSO processes to crowdsource potential solutions. Hold monthly forums across mission areas to surface new issues and identify available funding.
• Foster collaboration. Technical experts must take a more active role in helping industry navigate unique deployment, security, and accreditation processes.
• Institutionalize performance metrics. Establish annual objectives for PMs, COs, and CORs that include reviewing white papers, developing problem statements, and executing a minimum number of OTA or CSO actions per year.
• Prototype before you commit. Whenever possible, pilot new requirements through OTAs or CSOs before locking into long-term contracts, thereby reducing risk while validating capability and performance.

Challenges and Impacts Ahead

As the DOD accelerates adoption of OTAs and CSOs, both government agencies and commercial companies will experience growing pains alongside new opportunities. Having led and supported multiple OTA and CSO implementations from both sides of the table, I can attest that early education and proactive engagement are the surest paths to success.

Government Impacts

As agencies and companies adjust to faster, more flexible procurement models, the impacts will vary depending on how quickly each adapts. The following outline highlights key opportunities and challenges facing both government and industry participants in this evolving environment:

Positive Outcomes

• Rapid access to innovative, industry-developed capabilities that address immediate warfighter needs.
• Cost savings through prototype testing before long-term commitments.
• Greater leverage of private-sector R&D investments, reducing government development costs.
• Faster deployment of life-saving technologies to the battlefield.
• Improved morale among acquisition professionals empowered to deliver results quickly.
• Expanded participation from non-traditional and small business innovators.

Potential Challenges

• Agencies that fail to execute OTAs and CSOs risk losing funding and leadership confidence.
• Increased workload to justify acquisition approaches and manage multiple RFIs.
• Institutional resistance from legacy acquisition processes and leadership turnover.
• Over-customization of commercial solutions, leading to cost overruns or schedule delays.
• Missed opportunities if acquisition personnel remain untrained or risk-averse.

Corporate Impacts

Positive Outcomes

• New business growth driven by innovative commercial off-the-shelf (COTS) and prototype solutions.
• Opportunities for sole-source follow-on awards following successful pilot efforts.
• Expansion into new mission areas and agencies through scalable, commercial offerings.
• Enhanced morale and reputation through rapid delivery of high-impact solutions.

Potential Challenges

• Missed opportunities by failing to monitor OTA and CSO solicitations.
• Loss of follow-on work as traditional contract vehicles are phased out.
• Risk of being labeled a non-performer under new evaluation criteria.
• Loss of customer confidence or market share due to a lack of agility or accreditation readiness.
• Delays caused by limited understanding of federal compliance standards, such as Risk Management Framework (RMF) or Zero Trust.

Conclusion

As the federal government reopens and implements the new Warfighting Acquisition System, both industry and government must act decisively. Companies with COTS solutions have a unique opportunity to expand their presence and support national defense objectives if they learn to navigate OTA and CSO processes effectively. Government acquisition professionals, meanwhile, now possess the tools to deliver innovation to warfighters faster than ever before.

The success of this transformation will depend on how quickly each side adapts, collaborates, and embraces a culture of speed, flexibility, and mission focus. Those who prepare now will not only shape the future of acquisition but also strengthen the nation’s ability to respond to emerging threats with unmatched agility.

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By Daniel T. Minton, Principal Consultant and Government Contracts SME, Lohfeld Consulting Group

Daniel Minton brings more than 27 years of federal acquisition experience and a proven record of leadership in establishing and executing OTAs, CSOs, and BAAs. He previously worked on-site at DIU for a year and continues to monitor and analyze more than 100 active OTA, CSO, and BAA initiatives. In addition to providing strategic business development and implementation support, he produces real-time Source Selection Evaluation Board (SSEB) analyses, delivering specialized evaluation products that mirror government SSEB standards and directly support Contracting Officers in award decisions.

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Lohfeld Consulting Group has proven results specializing in helping companies create winning captures and proposals. As the premier capture and proposal services consulting firm focused exclusively on government markets, we provide expert assistance to government contractors in Capture Planning and Strategy, Proposal Management and Writing, Capture and Proposal Process and Infrastructure, and Training. In the last 3 years, we’ve supported over 550 proposals winning more than $170B for our clients—including the Top 10 government contractors. Lohfeld Consulting Group is your “go-to” capture and proposal source! Start winning by contacting us at www.lohfeldconsulting.com and join us on LinkedIn, Facebook, and YouTube^(TM).