A practical breakdown of DIU's Commercial Solutions Opening — how it differs from traditional procurement, what makes a strong submission, and why it matters for commercial tech companies.
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.
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.
Step 1: Find an open Area of Interest (AOI)
DIU publishes Areas of Interest on their website — these are specific problems the DoD needs solved. Recent examples have included AI-powered logistics optimization, autonomous underwater vehicles, space domain awareness, and predictive maintenance for military equipment.
Unlike a traditional solicitation, AOIs are often deliberately broad. DIU doesn't prescribe a solution — they describe a problem and ask the market what's possible.
Step 2: Submit a solution brief
This is a short document — typically 5-10 pages — that describes your technology, how it addresses the AOI, and your company's ability to deliver. No 200-page proposal. No cost accounting standards. No representations and certifications.
The solution brief should cover:
Step 3: Pitch day
If your solution brief makes it through initial screening, you'll be invited to present to a panel that includes DIU staff and representatives from the military end-user organization. This is typically a 30-minute presentation followed by Q&A.
This is where DIU differs most dramatically from traditional procurement. You're in a room with the people who will actually use your technology. They ask real questions. They tell you what matters and what doesn't. It's a conversation, not a compliance exercise.
Step 4: Prototype contract
If selected, you receive a prototype OT (Other Transaction) agreement — typically 12-24 months, funded at $1-5 million. The goal is to demonstrate your technology in a relevant military environment. This isn't R&D — DIU expects you to bring an existing product and adapt it for defense use.
Step 5: Production OT (the real prize)
If the prototype succeeds, DIU can transition directly to a production Other Transaction — a full-scale contract that can be worth tens or hundreds of millions. This transition happens without a new competition, which means the prototype phase is effectively your audition for the big contract.
DIU is not looking for government contractors. They're looking for commercial companies with proven technology that can be adapted for defense use. The distinction matters.
Commercial traction: DIU wants to see that your technology works in the real world. Commercial customers, revenue, and deployment history signal that the technology is mature and the company is viable. If you're pre-revenue with a prototype, SBIR is probably a better fit.
Speed: DIU operates on commercial timelines, not government ones. They expect to go from solution brief to prototype contract in 60-90 days. If your company can't move that fast, the process will leave you behind.
Dual-use potential: The best DIU candidates have technology that serves both commercial and defense markets. This matters because it means the DoD gets a product that's continuously improved by commercial market forces, not a bespoke defense system that only gets updated when Congress appropriates money.
Scalability: DIU isn't interested in one-off demonstrations. They want technology that can scale across the DoD. If your solution works for one Army unit, can it work for all of them? The production OT depends on the answer being yes.
The conventional path to a DoD contract can take 2-5 years and requires specialized knowledge of FAR, DFARS, cost accounting standards, and the Byzantine world of defense acquisition. The CSO can get you from application to contract in 90 days.
But speed comes with a trade-off: DIU's bar for technology maturity is high. They're not funding your idea — they're buying your product. The companies that succeed with DIU have already proven their technology in the commercial market and can credibly demonstrate it in a military context within months, not years.
For commercial tech companies that meet that bar, the CSO is the most efficient path into the defense market. For those that don't, programs like SBIR, AFWERX, and NavalX provide the R&D funding to get there.
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