The COTS Trap: Why Your Commercial Components May No Longer Be Exempt Under the New DFARS and NDAA Rules
- Dennis Blacksmith
- Jun 20
- 2 min read
Updated: 2 days ago
By Dennis Blacksmith
One of the most dangerous misconceptions in defense supply chain compliance is the assumption that commercial off-the-shelf (COTS) items remain exempt from the new rules.
The updated DFARS 252.225-7052 and NDAA Section 842 requirements are changing that reality. The regulation is clear that COTS items lose their exception once they are incorporated into a defense end item. This includes training simulators, VR/AR systems, instructor stations, and any other delivered solution to the DoD.
Even components that are fully commercial when purchased individually — such as headsets, displays, edge devices, UPS systems, and computers — typically lose their COTS status when integrated into a training system.
This creates major challenges for defense contractors. The supply chain tracing burden shifts to the company delivering the final system, supplier resistance is common, and the cost and complexity of full compliance can be substantial. Many companies are only now realizing the scope of this issue, and the deadline is approaching fast.
The situation is further complicated by the fact that different primes may interpret the integration rules slightly differently, leading to inconsistent expectations across contracts. This lack of uniformity adds another layer of difficulty for companies trying to maintain compliance while managing multiple customer requirements.
At RavenClear, we provide full-service compliance solutions so you don’t have to navigate this complexity alone. We identify integration risks, conduct reasonable inquiry processes, build defensible documentation, and develop practical mitigation strategies that work in the real world.
If your systems include commercial components that will be integrated into defense end items, the time to assess your exposure is now. Reach out if you’d like to discuss how these changes may affect your programs.
