For the last several years, Federal Market Analysis (FMA) has posted data concerning the Department of Defense/War’s (DOD/W) spending on Other Transaction Agreements (OTAs) for information technology (IT). In March 2025, the Secretary of Defense/War mandated that OTAs be used before any other procurement type to speed up the acquisition of technology solutions for warfighters. This mandate put OTAs even more at the center of DOD/W IT procurement.

Today’s post looks at high-level trends in defense OTA spending for IT from fiscal years 2023-2025. Other articles will follow in the weeks to come that detail this spending by defense organization and technology area.

Total OTA Spending: Non-IT vs. IT Requirements

The last three fiscal years show that spending on non-IT requirements has been rising. This said, spending dipped in FY 2025 compared to FY 2024 when it rose by more than $3.0B. Meanwhile, spending on IT requirements, which in this case includes unmanned systems and space/satellite communications solutions, followed a similar trajectory albeit with spending in FY 2025 outpacing FY 2024 even as it fell slightly behind FY 2023.

The curious thing about the spending trends is that the number of OTAs awarded for IT-related requirements rose each fiscal year, from 2,125 in FY 2023 to 2,797 in FY 2025. In FY 2025, DOD/W organizations awarded 207 more OTAs than in FY 2024. The dip in spending in FY 2025 compared to FY 2024 suggests that while the DOD/W is awarding more OTAs those awards are for smaller dollar amounts. This trend would be consistent with the department’s insistence that Defense/War customers use more commercial technology, which is often sold as a lower-priced commodity, than bespoke solutions that cost more to engineer.

IT OTA Spending by Defense Organization

Breaking down spending by defense organization yields the following distribution.

As has been the case for several years now, the U.S. Army spends the most on IT OTAs. Agencies that are part of the Fourth Estate also continue to rely on OTAs for IT, with the Office of the Secretary of Defense spending $376M in FY 2025, followed by the Washington Headquarters Service ($165M) and Defense Advanced Research Projects Agency ($153M).

The Air Force began catching up strongly in FY 2024, its spending growing by more than $600M compared to FY 2023. Meanwhile, the Navy continues to lag in terms of total spending on IT OTAs compared to the rest of the DOD/W.

IT OTA Spending by Technology Area

Concerning spending by technology area, here is the data.

Spending on requirements for network and communications technology currently outpaces that for any other solution. This is a bit of a change from previous years when spending on either cloud computing or cyber capabilities led the way. Spending on cloud computing solutions remains strong, too, although it has fallen from a high of nearly $1.8B in FY 2023. Not surprisingly, spending on artificial Intelligence/machine learning requirements has also remained strong even though it too has declined from a high of $1.3B in FY 2023.

Final Thoughts

The sluggishness of ordinary defense procurement methods pretty much ensures that the DOD will continue to use OTAs for both IT and non-IT requirements. It will continue to pay, therefore, for industry partners to keep track of requirements appearing as OTA competitions, even partners who do not specialize in R&D support.