U.S. Navy Awards $70M OTA to New Entrant CoAspire for Affordable Cruise Missile Program

The U.S. Navy has awarded $70 million to a new missile manufacturer to develop a low-cost cruise missile, describing the contract as only the opening move in a broader acquisition strategy.

Contract Details

The Office of the Assistant Secretary of the Navy for Research, Development and Acquisition confirmed that PAE Munitions — the Navy's precision-strike acquisition arm — awarded CoAspire, a company characterized as a new entrant into the defense industrial base, a $70 million Other Transaction Authority (OTA) agreement for the Coalition Heterogeneous Affordable Offensive Strike (CHAOS) program.

An OTA is a contracting tool that allows the Department of Defense to move faster than traditional procurement processes, enabling the Navy to fund prototype development with fewer bureaucratic hurdles. The use of this mechanism signals urgency behind the CHAOS program, which aims to field an affordable, mid-range cruise missile capable of striking both land-based targets and moving ships at sea — a dual-purpose capability that offers allied navies greater flexibility from a single weapons stockpile.

Strategic Context

The Navy office stated that the award represents PAE Munitions' direct investment in the emerging low-cost cruise missile market. This segment has drawn growing Pentagon attention as the war in Ukraine has demonstrated that both sides are expending precision munitions faster than traditional defense manufacturers can replace them.

The shortage has pushed the Department of Defense to look beyond its usual roster of large prime contractors toward smaller, faster-moving companies willing to build weapons using cheaper materials and quicker manufacturing methods — even if those companies lack the decades-long track record of traditional missile builders.

About CoAspire

Based in Virginia, CoAspire describes itself as a privately owned small business that has operated profitably for 13 years without outside investors, remaining entirely owned by its two founders. The company states this structure allows it to move faster than venture-backed or publicly traded competitors constrained by shareholder timelines and larger internal bureaucracies.

CoAspire's cruise missile family relies heavily on additive manufacturing (3D printing), which the company says maximizes payload capacity while reducing the custom tooling and manual labor that typically drive up costs and slow production timelines on traditional missile assembly lines.

Significance of the Award

According to the Assistant Secretary of the Navy's office, the CHAOS award is significant on two fronts:

• Security assistance partners: It marks a milestone in developing an affordable maritime strike capability specifically intended for allied nations that receive American-made weapons through official government sales channels.
• Industrial base expansion: It expands the broader defense industrial base by introducing competition into a market segment historically dominated by a small handful of established contractors.

Competitive Acquisition Strategy

The Navy office said PAE Munitions expects to sign at least one more industry agreement under the CHAOS program as part of its stated competitive strategy. This indicates that CoAspire will not be the only company building toward this requirement, and that the Navy intends to evaluate multiple cruise missile designs against one another rather than committing early to a single vendor.

Competitive prototyping of this kind has become increasingly common within the Department of Defense's newer, faster acquisition pathways, as running rival designs against one another before committing to full-rate production tends to produce better pricing and better-performing hardware than awarding a sole-source contract upfront.

Broader Implications

The Navy's effort to accelerate a new entrant into its precision strike portfolio carries strategic weight beyond this single contract. The precision strike portfolio refers to the broader family of guided weapons the Navy uses to hit specific targets accurately from standoff range — a category traditionally dominated by a small number of long-established missile manufacturers building exquisite, expensive systems.

Bringing in a company like CoAspire, promising missiles built in months rather than years using 3D-printed components, represents a deliberate bet that speed and affordability can supplement the Navy's existing capabilities.