Navy Spending on Other Transaction Agreements for Cybersecurity, FY 2020-2022

The Department of Defense (DoD) and the military departments (MILDEPs) have used Other Transaction Authority (OTA) contracts to acquire and develop information technology (IT) capabilities, including cybersecurity. However, not all components have leveraged OTAs to the same degree.

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

DoD Cybersecurity-Related OTA Spending, FY 2020-2022

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), FY 2020 through FY 2022. (See chart below.)

To probe deeper, Navy spending with OTAs for cybersecurity-related capabilities has varied significantly over this three-year period, showing both rapid growth and precipitous contraction.

From FY 2020 through FY 2022 the Navy spent an aggregate $8.4M on cybersecurity-related efforts using OTAs. After $5.8M growth from FY 2020 to FY 2021, Navy spending on OTAs for cybersecurity efforts declined by nearly 60% from FY 2021 to FY 2022, to come in at $2.5M. (See chart below.)

Cybersecurity-Related OTA Spending by Navy Organization, FY 2020-2022

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

Seventy percent of recent Navy spending on OTA for cyber is done by two organizatoins – the Naval Network Warfare Command (NAVNETWARCOM) and the Naval Information Warfare Systems Command (NAVWAR).

Other organizations using OTA contracts for cyber-related efforts include the Naval Personnel Development Command (NPDC) at the Naval Education and Training Command (NETC), and the Naval Surface Warfare Center (NSWC) at the Naval Sea Systems Command (NAVSEA), which together account for 13% of OTA spending over this period. Making up the $1.4M (17%) are OTA contracts that provided no additional buying organization on the contract beyond listing the Department of the Navy. (See chart below.)

Navy Cybersecurity-Related Efforts Using OTA, FY 2020-2022

Below is a list of the Navy efforts using OTA that had significant cyber-elements for the past three fiscal years and had spending reported for FY 2022, signifying the most recent activity. The amounts below are aggregate OTA spending from FY 2020 through FY 2022, with FY 2022-specific spending also noted. Where a DON organization is provided in the data, this is also provided below.

• Persistent Cyber Training Environment Cyber Innovation Challenge Number 4, $2M total at NAVWAR, all in FY 2022
• ARP Layer 2 Network Security, $463M total at NAVNETWARCOM, all in FY 2022
• Base Production OTA for Mayhem [SW] with ForAllSecure, $128M total, $42.5M in each fiscal year, including this amount spent in FY 2022 at the NSWC, Port Hueneme Division. (The previous FYs listed no buying organization.)

It is worth noting the Persistent Cyber Training Environment Cyber Innovation Challenge #1 Follow-On contract listed $5.8M in OTA spending in FY 2021 only, split between NAVNETWARCOM ($3.375M, 58%), NPDC ($1.075M, 19%) and “Not reported” ($1.35M, 23%).

Final Thoughts

While the Navy’s use of OTA contracts for cybersecurity-related efforts is dwarfed by comparison among the other DoD components, their use at the Navy still underscores the utility of these acquisition methods for targeted technology development, prototyping and other needs. Further, the Navy’s OTA contracts for the Persistent Cyber Training Environment and for Mayhem software are elements that the Navy has in common with the Air Force and other DoD components, signifying both shared priorities and common requirements.

Given the high priority that cybersecurity continues to hold across the DoD, it is very possible that we will see additional OTA contracts at Navy to meet common requirements in the future. Time will tell.