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diff --git a/runtime/src/test/java/org/onap/policy/clamp/loop/PolicyComponentTest.java b/runtime/src/test/java/org/onap/policy/clamp/loop/PolicyComponentTest.java
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+++ b/runtime/src/test/java/org/onap/policy/clamp/loop/PolicyComponentTest.java
@@ -0,0 +1,296 @@
+/*-
+ * ============LICENSE_START=======================================================
+ * ONAP POLICY-CLAMP
+ * ================================================================================
+ * Copyright (C) 2019, 2021 AT&T Intellectual Property. All rights
+ *                             reserved.
+ * ================================================================================
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+ *
+ * http://www.apache.org/licenses/LICENSE-2.0
+ *
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ * ============LICENSE_END============================================
+ * ===================================================================
+ *
+ */
+
+package org.onap.policy.clamp.loop;
+
+import static org.assertj.core.api.Assertions.assertThat;
+
+import com.google.gson.Gson;
+import com.google.gson.JsonObject;
+import java.io.IOException;
+import org.apache.camel.Exchange;
+import org.apache.camel.Message;
+import org.junit.Test;
+import org.mockito.Mockito;
+import org.onap.policy.clamp.clds.util.ResourceFileUtils;
+import org.onap.policy.clamp.loop.components.external.ExternalComponentState;
+import org.onap.policy.clamp.loop.components.external.PolicyComponent;
+import org.onap.policy.clamp.loop.template.LoopTemplate;
+import org.onap.policy.clamp.loop.template.PolicyModel;
+import org.onap.policy.clamp.policy.microservice.MicroServicePolicy;
+import org.onap.policy.clamp.policy.operational.OperationalPolicy;
+import org.skyscreamer.jsonassert.JSONAssert;
+
+public class PolicyComponentTest {
+
+    /**
+     * Test the computeState method.
+     * oldState           newState        expectedFinalState
+     * NOT_SENT      SENT_AND_DEPLOYED          NOT_SENT
+     * NOT_SENT             SENT                NOT_SENT
+     * NOT_SENT           NOT_SENT              NOT_SENT
+     * NOT_SENT           IN_ERROR              IN_ERROR
+     */
+    @Test
+    public void computeStateTestOriginalStateUnknown() {
+        Exchange exchange = Mockito.mock(Exchange.class);
+        Message message = Mockito.mock(Message.class);
+        Exchange exchange2 = Mockito.mock(Exchange.class);
+        Mockito.when(exchange.getIn()).thenReturn(message);
+        Mockito.when(message.getExchange()).thenReturn(exchange2);
+        // policy found + deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        PolicyComponent policy = new PolicyComponent();
+
+        ExternalComponentState state = policy.computeState(exchange);
+        assertThat(state.getStateName()).isEqualTo("SENT_AND_DEPLOYED");
+        // policy found + not deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state2 = policy.computeState(exchange);
+        assertThat(state2.getStateName()).isEqualTo("SENT");
+        // policy not found + not deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state4 = policy.computeState(exchange);
+        assertThat(state4.getStateName()).isEqualTo("NOT_SENT");
+        // policy not found + deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state3 = policy.computeState(exchange);
+        assertThat(state3.getStateName()).isEqualTo("IN_ERROR");
+    }
+
+    /**
+     * Test the computeState method.
+     * oldState           newState        expectedFinalState
+     * NOT_SENT      SENT_AND_DEPLOYED          NOT_SENT
+     * NOT_SENT             SENT                NOT_SENT
+     * NOT_SENT           NOT_SENT              NOT_SENT
+     * NOT_SENT           IN_ERROR              IN_ERROR
+     */
+    @Test
+    public void computeStateTestOriginalStateNotSent() {
+        Exchange exchange = Mockito.mock(Exchange.class);
+        Message message = Mockito.mock(Message.class);
+        Exchange exchange2 = Mockito.mock(Exchange.class);
+        Mockito.when(exchange.getIn()).thenReturn(message);
+        Mockito.when(message.getExchange()).thenReturn(exchange2);
+        // policy found + deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        PolicyComponent policy = new PolicyComponent();
+        ExternalComponentState notSent = new ExternalComponentState("NOT_SENT",
+                "The policies defined have NOT yet been created on the policy engine", 90);
+        policy.setState(notSent);
+        ExternalComponentState state = policy.computeState(exchange);
+        assertThat(state.getStateName()).isEqualTo("NOT_SENT");
+        // policy found + not deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state2 = policy.computeState(exchange);
+        assertThat(state2.getStateName()).isEqualTo("NOT_SENT");
+        // policy not found + not deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state4 = policy.computeState(exchange);
+        assertThat(state4.getStateName()).isEqualTo("NOT_SENT");
+        // policy not found + deployed
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state3 = policy.computeState(exchange);
+        assertThat(state3.getStateName()).isEqualTo("IN_ERROR");
+    }
+
+
+    /**
+     * Test the computeState method.
+     * oldState           newState        expectedFinalState
+     * SENT                 SENT                SENT
+     * SENT          SENT_AND_DEPLOYED          SENT
+     * SENT              IN_ERROR              IN_ERROR
+     * SENT              NOT_SENT              NOT_SENT
+     */
+    @Test
+    public void computeStateTestOriginalStateSent() throws IOException {
+        Exchange exchange = Mockito.mock(Exchange.class);
+        Message message = Mockito.mock(Message.class);
+        Exchange exchange2 = Mockito.mock(Exchange.class);
+        Mockito.when(exchange.getIn()).thenReturn(message);
+        Mockito.when(message.getExchange()).thenReturn(exchange2);
+        PolicyComponent policy = new PolicyComponent();
+        ExternalComponentState sent = new ExternalComponentState("SENT",
+                "The policies defined have been created but NOT deployed on the policy engine", 50);
+        policy.setState(sent);
+        // new policy state SENT
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state = policy.computeState(exchange);
+        assertThat(state.getStateName()).isEqualTo("SENT");
+        // new policy state SENT_AND_DEPLOYED
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state2 = policy.computeState(exchange);
+        assertThat(state2.getStateName()).isEqualTo("SENT");
+        // new policy state IN_ERROR
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state3 = policy.computeState(exchange);
+        assertThat(state3.getStateName()).isEqualTo("IN_ERROR");
+        // new policy state NOT_SENT
+        policy.setState(sent);
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state4 = policy.computeState(exchange);
+        assertThat(state4.getStateName()).isEqualTo("NOT_SENT");
+    }
+
+    /**
+     * Test the computeState method.
+     * oldState                   newState        expectedFinalState
+     * SENT_AND_DEPLOYED     SENT_AND_DEPLOYED    SENT_AND_DEPLOYED
+     * SENT_AND_DEPLOYED            SENT                SENT
+     * SENT_AND_DEPLOYED          IN_ERROR            IN_ERROR
+     * SENT_AND_DEPLOYED          NOT_SENT            NOT_SENT
+     */
+    @Test
+    public void computeStateTestOriginalStateSentAndDeployed() throws IOException {
+        Exchange exchange = Mockito.mock(Exchange.class);
+        Message message = Mockito.mock(Message.class);
+        Exchange exchange2 = Mockito.mock(Exchange.class);
+        Mockito.when(exchange.getIn()).thenReturn(message);
+        Mockito.when(message.getExchange()).thenReturn(exchange2);
+        PolicyComponent policy = new PolicyComponent();
+        ExternalComponentState sendDeployed = new ExternalComponentState("SENT_AND_DEPLOYED",
+                "The policies defined have been created and deployed on the policy engine", 10);
+        policy.setState(sendDeployed);
+        // new policy state SENT_AND_DEPLOYED
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state = policy.computeState(exchange);
+        assertThat(state.getStateName()).isEqualTo("SENT_AND_DEPLOYED");
+        // new policy state SENT
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state2 = policy.computeState(exchange);
+        assertThat(state2.getStateName()).isEqualTo("SENT");
+        // new policy state IN_ERROR
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state3 = policy.computeState(exchange);
+        assertThat(state3.getStateName()).isEqualTo("IN_ERROR");
+        // new policy state NOT_SENT
+        policy.setState(sendDeployed);
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state4 = policy.computeState(exchange);
+        assertThat(state4.getStateName()).isEqualTo("NOT_SENT");
+    }
+
+
+    /**
+     * Test the computeState method.
+     * oldState           newState        expectedFinalState
+     * IN_ERROR     SENT_AND_DEPLOYED         IN_ERROR
+     * IN_ERROR            SENT               IN_ERROR
+     * IN_ERROR          IN_ERROR             IN_ERROR
+     * IN_ERROR          NOT_SENT             IN_ERROR
+     */
+    @Test
+    public void computeStateTestOriginalStateInError() throws IOException {
+        Exchange exchange = Mockito.mock(Exchange.class);
+        Message message = Mockito.mock(Message.class);
+        Exchange exchange2 = Mockito.mock(Exchange.class);
+        Mockito.when(exchange.getIn()).thenReturn(message);
+        Mockito.when(message.getExchange()).thenReturn(exchange2);
+        PolicyComponent policy = new PolicyComponent();
+        ExternalComponentState inError = new ExternalComponentState("IN_ERROR",
+                "There was an error during the sending to policy, the policy engine may be corrupted or inconsistent",
+                100);
+        policy.setState(inError);
+        // new policy state SENT_AND_DEPLOYED
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state = policy.computeState(exchange);
+        assertThat(state.getStateName()).isEqualTo("IN_ERROR");
+        // new policy state SENT
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(true);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state2 = policy.computeState(exchange);
+        assertThat(state2.getStateName()).isEqualTo("IN_ERROR");
+        // new policy state IN_ERROR
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(true);
+        ExternalComponentState state3 = policy.computeState(exchange);
+        assertThat(state3.getStateName()).isEqualTo("IN_ERROR");
+        // new policy state NOT_SENT
+        Mockito.when(exchange2.getProperty("policyFound")).thenReturn(false);
+        Mockito.when(exchange2.getProperty("policyDeployed")).thenReturn(false);
+        ExternalComponentState state4 = policy.computeState(exchange);
+
+        assertThat(state4.getStateName()).isEqualTo("IN_ERROR");
+    }
+
+    /**
+     * Test the create policies payload PdpGroup test.
+     */
+    @Test
+    public void createPoliciesPayloadPdpGroupTest() throws IOException {
+        Loop loopTest = new Loop("ControlLoopTest");
+        PolicyModel policyModel1 = new PolicyModel("onap.policies.monitoring.test", null, "1.0.0");
+
+        MicroServicePolicy microServicePolicy = new MicroServicePolicy("configPolicyTest", policyModel1, true,
+                new Gson().fromJson("{\"configtype\":\"json\"}", JsonObject.class), null, "pdpGroup1", "pdpSubgroup1");
+        loopTest.addMicroServicePolicy(microServicePolicy);
+
+        MicroServicePolicy microServicePolicy2 = new MicroServicePolicy("configPolicyTest2", policyModel1, true,
+                new Gson().fromJson("{\"configtype\":\"json\"}", JsonObject.class), null, "pdpGroup2", "pdpSubgroup1");
+        loopTest.addMicroServicePolicy(microServicePolicy2);
+
+        PolicyModel policyModel2 = new PolicyModel("onap.policies.monitoring.test2", null,
+                "1.0.0");
+        OperationalPolicy opPolicy =
+                new OperationalPolicy("opPolicy", new Gson().fromJson("{\"configtype\":\"json\"}", JsonObject.class),
+                        new Gson().fromJson("{\"jsonschema\":\"schema\"}", JsonObject.class), policyModel2, null,
+                        "pdpGroup2",
+                        "pdpSubgroup2");
+
+        loopTest.addOperationalPolicy(opPolicy);
+        OperationalPolicy opLegacyPolicy =
+                new OperationalPolicy("opLegacyPolicy", new Gson().fromJson(
+                        "{\"guard_policies\":[{\"policy-id\":\"guard1\"}]}", JsonObject.class),
+                        new Gson().fromJson("{\"jsonschema\":\"schema\"}", JsonObject.class), policyModel2, null,
+                        "pdpGroup2",
+                        "pdpSubgroup2");
+
+        loopTest.addOperationalPolicy(opLegacyPolicy);
+
+        LoopTemplate loopTemplate = new LoopTemplate("test", "yaml", 1, null);
+        loopTemplate.setDcaeBlueprintId("UUID-blueprint");
+        loopTest.setLoopTemplate(loopTemplate);
+
+        JSONAssert.assertEquals(ResourceFileUtils.getResourceAsString("example/policy/pdp-group-policy-payload.json"),
+                PolicyComponent.createPoliciesPayloadPdpGroup(loopTest, "POST"), false);
+    }
+}