How the DIU Commercial Solutions Opening Actually Works

In 2015, Secretary of Defense Ash Carter stood up the Defense Innovation Unit in a WeWork office in Mountain View, California. The location was the message: the Pentagon was coming to Silicon Valley, not the other way around.

A decade later, DIU has brokered over $4.8 billion in prototype contracts between the Department of Defense and commercial tech companies. The vehicle they use — the Commercial Solutions Opening, or CSO — is fundamentally different from anything else in federal procurement. And most companies still don't understand how it works.

What the CSO Actually Is

The CSO is not an RFP. It's not a grant. It's not SBIR. It operates under Other Transaction Authority (OTA), which means it lives outside the Federal Acquisition Regulation — the 2,000-page rulebook that governs traditional government contracting.

Why does that matter? Because the FAR is the reason most commercial companies can't sell to the DoD. FAR compliance requires specialized accounting systems, certified cost or pricing data, and a mountain of regulatory overhead that makes no sense for a company selling a commercial product.

The CSO eliminates most of that. If you have a commercial product or technology that solves a defense problem, you can pitch it to DIU using a process that looks more like a VC pitch than a government proposal.

Think of the CSO as the DoD's equivalent of Y Combinator's application — short, focused on the technology and the problem, and designed to move fast by government standards.