Last week, I looked at Air Force contract spending on information technology (IT) from fiscal year (FY) 2023 through 2025. This week I will focus on the Department of the Navy (DoN), including the U.S. Marine Corps.

Total Navy IT Spending

Reported federal contract spending data under a compilation of Product Service Codes (PSC) categorized as IT shows that the Navy obligated $18.7B for IT products and services in FY 2025, an increase from $18.1B in FY 2024 and $16.8B in FY 2023.

The top-line FY 2025 amount represents a 12% increase over what the Navy spent on IT in FY 2023 and a 3.2% bump in what they spent in FY 2024. That spending level places the Navy as the second highest spender on IT among the DoD components in FY 2025, second only to the Air Force.

Spending by Top Navy and Marine Corps Organizations

Breaking things out among the Navy and the Marine Corps reveals that the growth in DoN IT spending has been within the Navy, with Marine Corp IT spending remaining flat in FY 2025 after a slight decline in FY 2024.

The reported contracting data provides a view into how the following Navy components ranked in IT spending from the most to the least from FY 2023 through FY2025.

This is not an exhaustive list of Navy IT buyers, but these twelve top-spending entities account for $15.9B (95%) of the Navy’s (only) total FY 2025 IT spending. The remaining Navy organizations account for $835M for FY 2025, including $274M in reported obligations that fail to list a funding organization.

Three-quarters of the top 12 entities listed above increased their IT spending over the three years from FY 2023-2025, with many showing consistent growth over the three-year period. Of the three organizations that show declines, only the US Pacific Fleet shows a significant reduction from FY 2023, and all three had some rebound in spending from FY 2024 to FY 2025.

Spending by US Marine Corps Organizations

Breaking out the USMC reveals where the reductions in IT spending occurred among its organizations.

Marine Corps Systems Command (MCSC) accounts for 85% of the Marine Corps FY 2025 IT contract spending, and while the spending there rebounded in FY 2025, that level was still 1.4% below the FY 2023 level. Spending patterns at the other organizations began to shift in FY 2024 and for the most part continued in those trajectories into FY 2025.

Navy IT Spending by Business Size

Similar to the other DoD components, the Navy has increased its spending with small businesses over the period, growing from $5.2B in FY 2023 to $5.4B in FY 2025.

While 3% is not the strongest growth rate among DoD components over the period, the Navy holds a slight lead over the other military services – Army and Air Force – in the proportion of IT spending it does with small businesses. In FY 2025, the Navy spent $5.4B (29%) of the total $18.7B with small businesses, compared to 28% for the Army and 27% at the Air Force. Only the Defense Agencies, taken together at 34%, exceed the Navy’s proportion of FY 2025 small business utilization.

Top Companies by Navy IT Spending

Exploring the companies which have been reaping the most in Navy IT contracts reveals a mix of systems integrators, core IT hardware and software suppliers and firms that provide platforms and weapons systems.

The convergence of traditional IT and defense platforms and weapons systems underscores the extent to which information technology has become integral to modern warfighting systems and platforms.

While most of these top firms have some portion of their FY 2025 IT contract dollars with the Marine Corps, a few of them have a proportion that accounts for more than 20% of their FY 2025 DoN IT contract dollars. This includes:

• Leidos ($200M, 18%)
• Dell ($120M, 23%)
• SAIC ($84M, 22%)
• L3Harris ($77M, 27%)
• Northrop Grumman ($83M, 71%)
• Microsoft ($44M, 41%)

Closing Thoughts

At the top-line, the Department of the Navy continues to grow its spending on IT products and services at a healthy rate, second only to the Air Force in its growth rate over the last three fiscal years. The growth trend bucks trend of uncertainty and the expectation of declines by many due to many of the contracting reforms and scrutiny undertaken by the DoD. This points to the overall health and resilience of the DoD IT market and the continued reliance of the Navy and others on the IT capabilities which industry provides to meet both mission and enterprise priorities.