When a DoD contractor is developing a new system/software as a deliverable in a typical DoD contract, is it possible to include existing open source software?

Yes, it's possible. In nearly all cases pre-existing OSS are "commercial components", and thus their use is governed by the rules for including any commercial components in the deliverable. The use of commercial components is generally encouraged, and when there are commercial components, the government expects that it will normally use whatever license is offered to the public. Depending on the contract and its interpretation, contractors may be required to get governmental permission to include commercial components in their deliverable; where this applies, this would be true for OSS components as well as proprietary components. As with all commercial items, organizations must obey the terms of the commercial license, negotiate a different license if necessary, or not use the commercial item. An alternative is to not include the OSS component in the deliverable, but simply depend on it, as long as that is acceptable to the government. This is often done when the deliverable is a ...  more