SD-2 Dod Acquisitions Buying Commercial Items And Nondevelopmental ItemsThis document offers guidance on acquisitions involving all types of commercial and nondevelopmental items: systems, subsystems, assemblies, parts, and items of supply. Commercial services are also addressed.This document does not present a “cookbook” approach to the acquisition of commercial and nondevelopmental items; such an approach could not accommodate the vast array of potential applications. It does offer lessons learned and things to consider when participating on an integrated product team.

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Define  Requirements

Initially, requirements are defined at a high level by the customer or end user.The focus at this point is on operational requirements, for example, the type of item needed and the environ- ment in which the item must operate. In addition, the customer/user should distinguish between requirements that are mission critical and those that are mission enhancements.

To maximize the potential for commercial and NDI solutions, operational requirements should be stated in terms of performance or functionality and should be flexible.The use of commercial technology in an item can best be maximized when the capabilities of commercial items form the basis of the requirements, rather than when the user establishes the requirements independent of any knowledge of commercial capabilities. Undertaking market research to gain a broad understanding of commercial markets, technologies, companies, and products (strategic market research) is a good way to learn about commercial capabilities. (For detailed information about market research techniques, see SD-5, Market Research: Gathering InJormation About Commercial Products and Services.)

Once an acquisition program, along with the IPT, is established, the requirements can be defined in more detail. As with any acquisition program, thresholds and objectives for total ownership (life-cycle) cost, schedule, and performance parameters must be determined. A threshold is the minimum acceptable value for a parameter that, in the user's judgment, is nec- essary to provide a capability that will satisfy the mission need. An objective is a value beyond the threshold that could potentially have a measurable beneficial impact on capability, opera- tions, or support above that provided by the threshold value.

To establish realistic objectives, the IPT must balance mission needs with projected outyear resources. As a general rule, the IPT should use the Cost as an Independent Variable (CAIV) process when setting cost objectives.The CAIV process establishes cost as a fixed element (in- dependent variable) and allows performance and schedule to vary (dependent variables) in or- der to keep systems affordable. Balancing mission needs and life-cycle costs requires tradeoff analyses. Such analyses address unit costs, parametric estimates, mission effectiveness analyses, ac- cident attrition, technology trends, and other relevant considerations such as commercial versus DoD specifications. As different trades are considered, the requirements become more refined.

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