Navy Spending on Cybersecurity Using Other Transaction Agreements, FY 2021-2023

The Department of Defense (DoD) and the military departments (MILDEPs) have been using Other Transaction Agreement (OTA) contracts to acquire and develop information technology (IT) capabilities, including for cybersecurity. However, not all components have been leveraging OTAs to the same extent.

Last week, I looked at the Air Force’s use of OTAs for cybersecurity-related efforts. This week, I will focus on the Department of the Navy (DON).

DoD Cybersecurity-Related OTA Spending, FY 2021-2023

The latest OTA spending data reveals widely varying levels of OTA usage among the DoD components over the most recent three completed fiscal years (FY) 2021 through 2023.

Navy Cybersecurity-Related OTA Spending, FY 2021-2023

To probe more deeply into Navy spending with OTAs for cybersecurity-related capabilities we find that this spending has varied significantly over this three-year period, showing ebbs and flows of both contraction and growth.

From FY 2021 through FY 2023 the Navy spent an aggregate $34.4M on cybersecurity-related efforts using OTAs. After $3.7M drop from FY 2021 to FY 2022, Navy spending on OTAs for cybersecurity efforts jumped by $10M (+145%) from FY 2022 to FY 2023, to reach $16.9M.

Cybersecurity-Related OTA Spending by Navy Organization, FY 2021-2023

The latest spending data shows that cyber-related work via OTA at the DON is concentrated among a handful of organizations that have within their mission to develop new, emerging capabilities and technologies. This priority of innovation also aligns with the purpose and benefits of using OTA contracts.

Over this period, more than seventy-three percent of Navy spending on OTAs for cyber was done by two organizations – the Marine Corps Systems Command (MCSC) and the Naval Network Warfare Command (NAVNETWARCOM).

Other organizations using OTA contracts for cyber-related efforts include the Naval Personnel Development Command (NPDC) at the Naval Education and Training Command (NETC), the Naval Information Warfare Systems Command (NAVWAR), the Naval Surface Warfare Center (NSWC) at the Naval Sea Systems Command (NAVSEA), and Office of Naval Research (ONR), which together account for about 23% of OTA spending over this period. Making up the remaining $1.4M (4%) are OTA contracts that provided no additional buying organization on the contract beyond listing the Department of the Navy.

Navy Cybersecurity-Related Efforts Using OTAs, FY 2021-2023

Below is a list of the Navy efforts using OTAs that had significant cyber-elements for the past three fiscal years and had spending reported for FY 2023, signifying the most recent activity. The amounts below are aggregate OTA spending from FY 2021 through FY 2023, with FY 2023-specific spending also noted. Where a DON organization is provided in the data, this is also provided below.

• Big Data Platform-Cyber Hunt & Analytic Operations System (BDP-CHAOS) Production PA (MCSC), $16.1M total, $7.3M (46%) in FY 2023, up from $4M in FY 2022
• Persistent Cyber Training Environment Cyber Innovation Challenge #1 Follow-On. Prototype Development of a Cloud-Based Training Platform to Support Cyber Workforce with Individual Through Force Level Sustainment Training, Team Certification, and Provide the Foundations for a Collective Training Network (NPDC), $8.4M total, $2.6M (31%) in FY 2023
• Persistent Cyber Training Environment Cyber Innovation Challenge Number 4 (NAVNETWARCOM), $7.6M total, $5.6M (74%) in FY 2023. For comparison, NAVWAR spent 5.6M on this OTA in FY 2022.
• Information Warfare Research Project 2, $1M total, all in FY 2023; $773K at NAVWAR and $287K at ONR
• Threat Simulation Systems (TSS) Prototyping (NSWC), $286K total, all in FY 2023

Final Thoughts

While the Navy’s use of OTA contracts for cybersecurity-related efforts is much lower by comparison among the other DoD components, their use at the Navy is growing, which underscores the utility of these acquisition methods for targeted technology development, prototyping and other related purposes. Further, several of the OTA contracts used by the Navy are also used by other DoD components. For example, the Persistent Cyber Training Environment contracts above are also used by the Air Force and the Army. The Information Warfare Research Project 2 OTA is also used by Defense Intelligence Agency (DIA). The Threat Simulation Systems (TSS) Prototyping OTA is also used by the Army. These commonalities can signify shared priorities and common requirements and may also point to contractor opportunities across DoD components.