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Defense Cybersecurity Spending Using Other Transaction Agreements, FY 2019-2021

Published: January 13, 2022

Federal Market AnalysisUSAFARMYContracting TrendsCybersecurityDEFENSEForecasts and SpendingInformation TechnologyNAVY

Defense Department spending on cybersecurity-related OTAs grew strongly from FY 2019 through FY 2021, dominated by the Defense Agencies and the Army.

Over the past decade or more the Department of Defense (DOD) and the military departments (MILDEPS) have been leveraging the flexible and timely procurement options offered by Other Transaction Authority contracts, or OTAs, to onboard emerging commercial technologies and develop prototype systems. This includes using OTAs to procure cybersecurity-related capabilities.

Total Cybersecurity-Related OTA Spending, FY 2019-2021

Now that we are into January 2022, we should have complete spending data for all of fiscal year (FY) 2021, given the DOD’s traditional 90-day lag in reporting contract data to the Federal Procurement Data System (FPDS).

This data shows the DOD spent more than $1.2B on cyber capabilities via OTA contracts over the last three fiscal years. (See chart below.)

Cyber OTA spending across the DOD has been growing rapidly, more than doubling from FY 2019 to FY 2020 and then growing an additional 55% into FY 2021. The end result is a more- than-tripling in spending in just two years.

Cybersecurity-Related OTA Spending by Defense Organization, FY 2019-2021

Breaking out the spending by DOD component gives a deeper perspective on where the activity is focused. Of the $1.2B+ OTA spending over the last three fiscal years the vast majority (96%) was spent by the Defense Agencies (53%) and the Army (43%), with the Air Force and Navy each accounting for roughly 2%.  (See chart below.)

For OTA contracts among the Defense Agencies the Strategic and Spectrum Missions Advanced Resilient Trusted Systems program accounts for nearly $597M (89%) of the total $673M for the period. Breaking this down further, OTA contracts for this program awarded by the Washington Headquarters Service accounts for more than $582M (98%) of the program total, with the remaining additional $15M in OTAs.

At the Army the Automotive Cyber Security, Vehicle Safety Technologies, Vehicle Light Weighting, Autonomous Vehicles and Intelligent Systems and Connected Vehicles program, predominantly at the Army Futures Command, accounts for $355M (66%) of the Army’s total cyber OTA spending for the period. This is followed by the Cyber Protection Brigade program through the Army’s Assistant Secretary for Acquisition, Logistics and Technology.

Though much smaller by comparison the Air Force and Navy cyber OTA spending is also fairly concentrated. The Phase II Open Secure Communications On AFSOC Cloud program at the Air Force Materiel Command reported $6M of the department’s $25M in cyber OTA spending. The Strategic and Spectrum Missions Advanced Resilient Trusted Systems program through the Navy’s Assistant Secretary for Research, Development and Acquisition accounts for all of the Navy’s cybersecurity-related OTA spending over this period, nearly $17M of which came in FY 2021.

Implications

One recognizable theme emerges within the data, regardless of the relative size of cyber OTA spending among the DOD components. Every component had increasing OTA spending each year from FY 2019 through FY 2021, signaling a growing propensity to use OTAs to prototype new cyber capabilities at every level of the DOD. This underscores both the urgency with which the DOD is seeking to bolster its cyber posture as well as its reliance on contracted expertise in developing emerging cyber capabilities.