Intermediate Systems Acquisitions Course. Commercial and Non-Developmental Items

Transcription

1 Commercial and Non-Developmental Items Many systems acquired by DHS are not completely new developments; instead, they use existing products. These products may be used just as they are, or they may be modified to meet unique homeland security requirements. They may be widely available in the commercial marketplace, or they may be available only to Government agencies. This lesson will examine some issues associated with the acquisition of products that were not originally developed for DHS. This lesson focuses on test and evaluation and logistics support of those products. It also examines some of the restrictions associated with limited data rights. You may print the Commercial and Non-Developmental Items lesson for future reference. Page 1 of 27

2 Objectives Upon completion of this lesson, you should be able to: Recognize the advantages of integrating commercial and non-developmental items into design solutions List the challenges of integrating commercial and non-developmental items into design solutions Identify the constraints of limited data rights associated with commercial and nondevelopmental items Page 2 of 27

3 What are Commercial Items? Commercial items (CIs) are items that are customarily used for non-governmental purposes and are offered for sale, lease or license to the general public. The term "commercial off-the-shelf" (COTS) refers to a subset of commercial items. COTS does not refer to real property, services, or items that have been modified. Although modified items are not considered COTS, they are considered CIs if the modifications are of a type available to the general public. Likewise, services are not COTs, but they are considered CIs if they are offered and sold widely in the commercial marketplace. Page 3 of 27

4 What are Non-Developmental Items? Non-developmental items (NDIs) are items that require little or no development within a DHS program, because they were previously developed for other government applications. In other words, NDIs were previously developed exclusively for government purposes by Federal, state, or local governments. These items may require minor modifications, but they are still considered NDIs. Page 4 of 27

5 Benefits of Commercial and Non-Developmental Items CIs and NDIs help get systems to users faster by using demonstrated technology. The benefits of CIs and NDIs include: A quick response to operational needs Availability of product samples to screen items during the selection process Elimination or reduction of R&D costs Application of state-of-the-art technology to current requirements Reduction of technical, cost, and schedule risks Under the Federal Acquisition Regulation (FAR), programs should acquire CIs and NDIs when they are available to meet the needs of the agency. Page 5 of 27

6 Drawbacks of Commercial and Non-Developmental Items Using CIs and NDIs is not entirely risk-free. Some of the drawbacks include: Difficulty in adapting an existing item to a new use Difficulty in integrating components that were designed for a different purpose Problems with long-term logistics support when there is a risk that an item may no longer be supported or produced A lack of relevant engineering and test data, which may not be as complete as if you had developed the item in-house Both benefits and drawbacks are important considerations for identifying suitable solutions and contractors during market research. Page 6 of 27

7 Knowledge Review Which of the following would be considered a common drawback to using commercial or nondevelopmental items? A. Higher production costs B. Increased risk C. Higher R&D costs D. Difficulty in integrating components Correct! It may be difficult to incorporate components, designed for a different purpose, into a new system. Page 7 of 27

8 Test and Evaluation (T&E) of CIs/NDIs Now let's talk about testing commercial products and NDIs. Even when buying existing products, the T&E community must be involved in the acquisition process from the start so that all test issues are adequately addressed. Developers, users, and the independent Operational Test Agents (OTAs) should all work together to tailor test requirements and execution strategy, just as they do for any other acquisition program. Page 8 of 27

9 Test and Evaluation (T&E) of CIs/NDIs (continued) The use of CIs and NDIs does not eliminate the need for test and evaluation (T&E), although it should reduce the amount required. Furthermore, any modifications to these items will be subject to T&E. The extent of testing and the specific test events required will depend on the nature of the item and its intended use, as well as the availability of existing commercial and Government test data. Note: Be careful not to test items to the extent that you negate the cost and schedule savings of using CIs and NDIs. The extent of testing should be determined by the amount of information needed to assess the system's operational effectiveness, suitability, and cybersecurity. D Page 9 of 27 A diagram labeled Comparative Costs of Testing indicating that the T&E required for New Development is significantly more than the amount needed for Commercial and NDI.

10 Test and Evaluation (T&E) of CIs/NDIs (continued) With CIs and NDIs, the extent of testing also depends on the originally intended environment versus the required operational environment. COTS/NDI require OT&E to verify the item(s) continue to perform as expected under unique operational environments. Be sure to consider previous test data and performance history as it applies to the new situation. While some developmental testing and evaluation (DT&E) may be needed, the focus of T&E for these items shifts more to operational testing and evaluation (OT&E) of system integration, interoperability, suitability, effectiveness, reliability, and cybersecurity. Page 10 of 27 Developmental testing and evaluation: Any test used to assist the engineering design and development process, and to verify the status of technical progress. DT&E is a tool to help identify and manage design risks, substantiate achievement of technical performance requirements, validate manufacturing process requirements and system maturity, and certify readiness for Operational Testing (OT). DT&E typically requires instrumentation and measurements, and is performed under known, controlled, and limited conditions that might, or might not be, representative of the complex operational environment. DT&E is controlled by the PM and consists of all testing performed by the contractor and/or Government during system development. Operational testing and evaluation: Operational Tests are field tests of any system or component, conducted under realistic conditions, to determine that system or components' overall effectiveness and suitability for use prior to their deployment. They are usually conducted by an independent evaluator and not controlled by the PM. The results of operational tests are documented within various OT&E reports. The reports are used to evaluate the degree to which the system or components meets their requirements, and how well a system will provide the desired capability when operated by typical users in the intended environment.

11 Determining Amounts of Testing for CIs/NDIs The amount of testing required is primarily determined by the way the item will be used. Items may be used in four different ways: In the same environment and conditions for which it was originally designed In a different environment than the one for which it was designed Integrated into a larger unit Modified with new or improved features Let's discuss each of these in more detail. Page 11 of 27

12 Testing CIs/NDIs in the Same Environment If an item is used in the same environment and under the same conditions for which it was designed, it normally does not require DT&E. However, when the contractor has not previously produced an acceptable finished product and the item is assessed as a high risk, a form of developmental testing known as production qualification testing (PQT) may be required on a number of samples to ensure the effectiveness of the manufacturing process. A commercial radio used on both commercial and Government transport aircraft is an example of an item used in the same environment for which it was designed. Even when developmental testing is not needed, operational testing is still required to make sure the item will meet cybersecurity requirements and be effective and suitable for the DHS mission. Page 12 of 27

13 Testing CIs/NDIs in a Different Environment If an item is used in a different environment than the one for which it was designed, some DT&E may be required to ensure the item meets specifications. The full range of operational testing will be required to verify both effectiveness, suitability, and cybersecurity. Example: A handgun designed for use by urban police forces may be used by Border Patrol agents in a different environment than the one for which it was originally designed. Under field conditions found on the Southwest border, there is much more dirt and debris that can affect the weapon's operation. The handgun will need to be tested in the new environment to ensure that it functions to the required specifications. Page 13 of 27

14 Testing Integrated CIs/NDIs If an item is intended for integration into a larger system, developmental testing will be required before the item is integrated into the system. After integration, pre-production testing of the total system, both hardware and software, may be required. Operational testing of the larger system by field operators will also be required. For example, a commercial navigation system intended for integration into a border patrol vehicle's electronics suite may require new electric plugs and racks and possibly interface software to work in the field. Page 14 of 27

15 Testing Modifications to CIs/NDIs An item may need modifications to meet DHS requirements. If the COTS/NDI has been modified, integration may require regression testing at the system level to ensure the modification does not change expected system performance. For example, the commercial navigation system in the previous example may have a display that only operates above -10 C. Customs and Border Protection may have a requirement to operate in temperatures well below -10 C, requiring the integration of a new display or a way to warm the existing display. Testing will focus on the modification to ensure that it meets the operational capability needs and does not negatively impact the overall operation. Some DT&E may be required for this item. Page 15 of 27

16 CI/NDI Logistics Issues Although you'll save time and expenses by using CIs or NDIs, other issues need to be considered, such as: What if the commercial product line is changed or discontinued? What happens if replacement parts become unavailable? How can we be sure that item parts will be interoperable with the overall system? What if our DHS-unique modification to a commercial item invalidates historical test data? What is the best balance between contractor support and in-house Government support for a fielded system? This last issue, contractor versus organic support, is influenced by how much modification the system needs, where and how long the system will be used, and the stability of the system's design. You will explore these factors in more detail over the next few screens. Page 16 of 27

17 CI/NDI Logistics Issue: Contractor Support Select the D-link to read a detailed explanation of the graphic CIs and NDIs range from as-is to highly modified. Less modification to CI/NDI systems will create more opportunities to use existing contractor support structures. More modifications may require the creation of new support systems, either by developing and then procuring them from a contractor or by creating an organic capability. D Page 17 of 27 A graphic showing the trade-off between Contractor and Government support. Above the graphic is the question, "How much modification is required?" The graphic indicates that the contractor has the most responsibility for "as-is" items, with its level of responsibility decreasing the more modified the item gets. Conversely, the Government has the most responsibility for highly modified items, with its level of responsibility decreasing the more "as-is" the item gets.

18 CI/NDI Logistics Issue: Contractor Support (continued) Select the D-link to read a detailed explanation of the graphic If the item will only be in the inventory for a limited time, then contractor logistics support might be preferable. Conversely, if the item will be available for a prolonged period, Government support may be more appropriate. Even when the contractor provides initial support, an item may be pulled off the market before the Government replaces it, at which point the Government may have to take on the role of providing support. D Page 18 of 27 A graphic showing the trade-off between Contractor and Government support. Above the graphic is the question, "What is the projected service life?" The graphic indicates that the contractor has the most responsibility for items with a service life lasting a "limited time," with its level of responsibility decreasing the longer the item's service life gets. Conversely, the Government has the most responsibility for items with a service life lasting a "prolonged period," with its responsibility decreasing the shorter the item's service life gets.

19 CI/NDI Logistics Issue: Contractor Support (continued) Select the D-link to read a detailed explanation of the graphic Does the item take advantage of an advancing technology with constantly changing configurations, or is it based on a proven, stable design? If the technology is continuously changing along with the configuration, it may be preferable to go with contractor logistics support. In some cases, the answers to these questions will be split between favoring contractor and organic (i.e., in-house, government) support. When that occurs, a mix of contractor and organic support may be most appropriate. Logistics planners should work closely with systems engineers to determine the optimal support concept. D Page 19 of 27 A graphic showing the trade-off between Contractor and Government support. Above the graphic is the question, "How stable is the design/configuration?" The graphic indicates that contractor has the most responsibility for designs that use "Advancing Technology," with its level of responsibility decreasing the more stable the design gets. Conversely, the Government has the most responsibility for "Stable Designs," with its level of responsibility decreasing the more the designs use advancing technology.

20 Knowledge Review As a PM, which of the following conditions would favor a decision to use organic support rather than contractor support for a fielded system? A. The system will be used in an office environment and replaced within three years B. The system relies on new, rapidly changing technology C. You anticipate the system will be in operational use for years D. A commercial item has been integrated with no changes in configuration Correct! Ten or more years is a long time, so you might be more inclined to select Government support over contractor support. Page 20 of 27

21 Data Rights One of the other challenges associated with using commercial or non-developmental items is the issue of proprietary data rights. The Federal Acquisition Regulation (FAR) includes two basic forms of data rights: unlimited data rights and limited data rights. In general, if the Government pays for development of an item for example, under a development contract the Government owns unlimited rights to the data associated with that item. The Government is free to use, duplicate, or disclose that data for any purpose. If a contractor has developed an item entirely at its own expense, then the Government is only entitled to limited rights, within the Government itself, and normally cannot release the data to other parties outside the Government. There are many nuances to both kinds of rights, which are beyond the scope of this lesson. (If you want more detail, see FAR Part 27.4.) This lesson will focus only on limited data rights. Page 21 of 27

22 Limited Data Rights If development of an item is privately funded, as is generally the case with a commercial item, the contractor can limit the Government's use of the technical data associated with the item. Data includes such things as software source code, technical drawings and technical descriptions. Unless a system is purely stand-alone, the Government often needs this technical data to integrate various components and/or to maintain and support the system. Access to this data is not free; it must be purchased under a contractual agreement. When the Government awards a contract to buy a commercial item, the contractor is offered the chance to identify data items for which they wish to limit the Government's rights. Page 22 of 27

23 Limited Data Rights (continued) Any limited-rights data identified by the contractor must carry the following notice: "These data are submitted with limited rights under Government Contract No. (and subcontract, if appropriate). These data may be reproduced and used by the Government with the express limitation that they will not, without written permission of the Contractor, be used for purposes of manufacture nor disclosed outside the Government; except that the Government may disclose these data outside the Government for the following purposes, if any; provided that the Government makes such disclosure subject to prohibition against further use and disclosure: [Here you would list any intended uses of the limited-rights data]" Source: FAR (g)(3) This notice must be marked on any reproduction of the data, in whole or in part. Any disclosure by the Government is subject to prohibition against further use and disclosure by the recipient. Page 23 of 27

24 Examples of Limited Data Rights The following examples of specific exceptions may be added to the Limited Rights Notice shown on the previous screen: Use (except for manufacture) by support service contractors Evaluation by non-government evaluators Use (except for manufacture) by other contractors participating in the Government's program of which the specific contract is a part Emergency repair or overhaul work Release to a foreign government, if required to serve the interests of the U.S. Government, for information or evaluation, or for emergency repair or overhaul work by the foreign government Source: FAR (c)(1) Page 24 of 27

25 Limited Data Rights (continued) In summary, you (as a Government employee) must: Identify data needed to fulfill a contract Protect any limited-rights data identified by the contractor The contractor must: Identify any limited-rights data needed to fulfill a contract Mark each limited-rights data item (regardless of media) with the appropriate notice Source: FAR (c)(1) Page 25 of 27

26 Knowledge Review You are the program manager for the Foreign Visitor Identification System (FVIS). In order to keep FVIS vermin-free, you have selected the commercially available security system, Automated Better Mousetrap, from ABM Corporation. ABM Corporation has identified the technical specifications for the Mousetrap as limited-rights data. In order to integrate the Mousetrap into FVIS, PRIME Corporation, your systems integrator, requires the technical data for Mousetrap. May you copy the technical data onto a CD and give it to PRIME Corporation? Select the best answer. A. Yes, because it is required to accomplish the mission B. Yes, but only if this use was identified in the contract with ABM and you apply the appropriate markings to the CD C. No, disclosure of limited-rights data outside the Government is strictly prohibited Correct! This is the best answer because it stipulates conditions for releasing limited-rights data outside the Government. Page 26 of 27

27 Summary In this lesson you studied the advantages and disadvantages of using commercial items (CIs) and non-developmental items (NDIs) in DHS acquisitions. Using these items can reduce development time, save R&D costs, and reduce your program risk. However, the disadvantages include the difficulty of adapting an existing item to a new use, the possibility that support for an item may be discontinued, and the potential lack of relevant technical data. The use of CIs and NDIs does not eliminate the need for test and evaluation (T&E), although it should reduce the amount required. The required amount of T&E is determined by the environment and conditions in which the item will be used, whether it will be integrated into a larger unit, and whether it will be modified with new features. CIs and NDIs will require varying levels of contractor versus Government support, depending on the degree of modification to the system, how long the system will be used, and the stability of the system's design. Finally, you saw some of the constraints associated with limited data rights for items that have been developed with private funds. While we have a need for access to technical data to develop and support our systems, we also have the responsibility to protect data developed and owned by private entities. Those rights and duties are found in the Federal Acquisition Regulation (FAR). You may print the Commercial and Non-Developmental Items lesson for future reference. Page 27 of 27