For over a decade, the U.S. Government has been emphasizing its preference for using commercial-off-the-shelf (COTS) products as a way to reduce program costs and accelerate schedules. The results of this initiative have been mixed, with many programs reporting fewer benefits from COTS usage than its advocates had forecast. This paper explores the reasons for the unfulfilled potential of COTS utilization and presents some new considerations for addressing the COTS challenges. Between 1992 and 1996, a NASA Task Force called the COST LESS Team developed recommendations for a combined technical architecture and electronic-commerce marketplace strategy for reducing the cost and cycle time of systems for space programs, while improving their quality and responsiveness to customer needs. COTS buying was a central, but not exclusive, feature. The strategy involves a comprehensive re-engineering of the entire buy/sell process and the relationships between government program management and the supply chain. In addition to using COTS products, the strategy includes: (1) aggregating demand across organizational and program boundaries that traditionally are uncoordinated, (2) determining fundamental reusable components that may not be recognized as similar in today's organizational framework, (3) influencing the design and creation of products available from the supply chain, and (4) revamping the mechanisms for matching the buyers and sellers, i.e., marketplace modernization. Each of these features for a COTS acquisition strategy is discussed in detail. Case summaries are presented which demonstrate that implementing these features will enhance the advantages of using COTS and remove some of the impediments that have limited its early successes. Specific recommendations are offered to realize the full potential for COTS utilization through incorporation with re-engineered processes.
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