Recently, I had the opportunity to speak with the Senior Vice President for Contracts and Pricing at a major government contracting firm and her team about commercial buying. The conversation reinforced a point that is easy to miss in policy discussions: commercial solutions require commercial behavior. That means government must be willing to engage the market differently, and industry must be willing to explain, candidly and constructively, what commercial buying entails. Without that mutual adjustment, commercial acquisitions risk remaining a policy imperative rather than becoming a practical success for both sides.
Federal acquisition leaders are once again being encouraged to emphasize the procurement of commercial products and services. Although this approach is longstanding, recent policy developments have underscored its renewed significance. The Office of Management and Budget’s 2026 memorandum on expanding commercial acquisitions reinforces established guidance that agencies should, whenever feasible, procure commercially available products and services, including those adaptable to agency requirements. The broader Federal Acquisition Regulation (FAR) modernization initiative continues to prioritize acquisition reform, simplification, and the adoption of commercial buying practices.
This environment presents acquisition leaders with an important question: what practical changes are necessary to improve commercial buying? The solution lies not simply in further policy development but in shifting behaviors.
The Foundation of Commercial Acquisition
Commercial acquisition is not a novel concept. FAR Part 12 provides comprehensive policies and procedures for acquiring commercial goods and services, while FAR Part 10 guides acquisition teams in conducting market research to determine the availability or adaptability of commercial solutions to meet government needs.
Commercial markets often offer advanced technology, proven services, competitive pricing, and access to vendors who may not identify as traditional government contractors. Frequently, these markets evolve more rapidly than government-specific development processes. The government should responsibly leverage such capabilities when appropriate. However, successful commercial acquisition depends not on mere preference or policy citation, but on aligning acquisition practices with commercial market realities.
Distinguishing Commercial from Private-Sector Behavior
Adopting commercial behavior doesn’t mean mirroring private-sector practices. Public procurement involves obligations that go beyond those found in commercial transactions, such as ensuring competition, fairness, transparency, cybersecurity, mission accountability, fiscal responsibility, support for small businesses, and legal compliance. These obligations are integral to public trust and responsibility.
When engaging in commercial buying, the government needs to realize the mechanics of how the market operates.
Successful commercial vendors make deliberate decisions regarding product design, pricing, licensing, warranties, support, upgrade cycles, customer service, and risk allocation. These aspects are essential elements of their offerings.
Commercial Offerings Are More Than the Product
Agencies must understand the full scope of a commercial offering, not just the product or service. For instance, a software platform may have set pricing and standard contract terms, including license agreements, updates, support, and liability limits. Requests for custom licensing, unlimited liability, unique support, or upgrade control can alter these terms and raise costs or cause vendors to opt out. When government requirements diverge from the commercial model, such as demanding customization or non-standard terms, vendors may charge more, alter their offerings, or decline to compete.
Risk and Rights Are Part of Commercial Models
Commercial practices also require a more mature conversation about risk and rights. Industry does not experience risk as an abstract acquisition variable. Risk is something that must be accepted, priced, bounded, phased, or declined. Some risks can be accepted when the contractor controls the relevant performance drivers. Others need to be bounded through assumptions, volume bands, governance mechanisms, or change triggers. Still others should be phased through pilots, discovery periods, or modular commitments because the facts are not mature enough for either side to make a responsible fixed-price commitment at award.
The same logic applies to data rights and intellectual property. If government wants commercial solutions, it cannot reflexively demand the rights profile of a bespoke development program without affecting the economics that make commercial investment possible. Government needs sufficient rights to use, secure, integrate, audit, transition, and sustain the capability. But industry needs to retain enough rights in background intellectual property, platforms, tools, models, and methods to continue improving and investing in those capabilities. Commercial behavior requires both sides to distinguish what the government truly needs for mission assurance from what industry must preserve to keep bringing its best solutions to the federal market.
Government agencies must consider if they truly need to own the engine to drive the car.
Revealing Government Acquisition Habits
Commercial acquisition can expose established patterns in traditional procurement processes. When agencies either fail to define their mission needs clearly or specify solutions too rigidly, companies may struggle to match their products effectively. This misalignment can exclude potentially better options or unintentionally turn commercial opportunities into custom projects which may not meet an agency’s ability to achieve cost, schedule, or performance objectives and force it to operate contrary to OMB guidance.
It's also essential to understand that commercial solutions aren't always ideal; some government requirements are so specific that they require custom development. A true commercial-first approach recognizes these differences.
If a commercial solution does prove feasible though, is the acquisition system adequately prepared to accommodate it?
Commercial Buying Is a Team Discipline
Addressing this question requires engagement beyond the contracting office. Commercial buying decisions are influenced by program offices, requirements owners, technical teams, cybersecurity and data stakeholders, legal advisors, budget officials, and senior leadership all shaping acquisition outcomes prior to solicitation release.
Therefore, commercial buying should be considered an operational discipline across the entire acquisition team, rather than solely a contracting technique.
Key Principles of Commercial Behavior
Success begins with government agencies asking relevant questions to foster effective commercial acquisition strategies:
- Can outcomes be defined without detailing every requirement?
- Is there a thorough understanding of market practices regarding sales, pricing, licensing, support, upgrades, and modifications?
- Are requested terms indispensable, legally mandated, or merely familiar?
- Will evaluation methods accurately recognize commercial value?
- Are requests for evidence reasonable for commercial firms?
- Do timelines reflect market realities?
Agencies should test requirements against market practices before finalization. If firms consistently indicate that a requirement is unusual, costly, or inconsistent with standard commercial practice, acquisition teams must evaluate whether it is essential, required, or simply habitual on their part.
Separating desired outcomes from preferences allows industry to propose existing commercial solutions. Approaching terms and conditions as components of market strategy can enable negotiation and risk management, rather than simply accepting or rejecting them without careful consideration.
Evaluation criteria should reflect how commercial value is delivered, encompassing performance history, implementation, customer support, scalability, interoperability, lifecycle cost, cybersecurity, and vendor sustainability.
Industry participants must help to facilitate government evaluation of commercial value by providing clear explanations regarding pricing models, support boundaries, upgrade practices, risk assumptions, and areas impacted by customization. They should clarify the flexibility of commercial practices and relate commercial value to mission outcomes in evaluable terms that make sense to government agencies.
Policy Versus Execution
While policy can stimulate urgency and direct focus, it cannot singularly drive market-informed requirements or convert vague demands into actionable outcomes. Policy alone cannot make government-unique terms common in commercial settings, nor does it ensure that evaluation criteria are relevant to the market. Persuading government contracting firms to participate in commercial offerings requires acquisition environments that do not appear costly, inefficient, unclear, or disconnected from their operational realities.
Ultimately, execution is determined by people.
Government success depends on acquisition teams transitioning from legacy practices to informed decision-making while maintaining accountability. On the industry side, it requires articulating commercial value to support public procurement decisions. Improved communication between both parties can minimize risk premiums, exceptions, delays, and no-bid outcomes.
The federal government can maintain competition, fairness, transparency, cybersecurity, and taxpayer value by implementing procurement practices that align with market norms, but it will need to carefully identify which standards are required by law, mission, or traditional practice and be willing to challenge its own assumptions.
A commercial-first policy provides opportunity, but sustained commercial behavior is required to truly realize its benefits.