The Defense Department says it has found $4 billion in savings by cutting consulting and non-essential contracts with Accenture, Booz Allen Hamilton, Deloitte, and other unnamed companies.
The contracts had a total value of $5.1 billion, according to a DOD memo and a video released of Defense Sec. Pete Hegseth announcing the cuts Thursday night. The cuts are part of the Department of Government Efficiency reviews at DOD.
Of the cuts, $1.8 billion were found at the Defense Health Agency, which involved contracts held by Accenture, Booz Allen, Deloitte and other unnamed contractors.
According to GovTribe data, Booz Allen has won $345 million in contract obligations at DHA over the last three years. Deloitte has $264 million over the same period, and Accenture is listed with $66 million in obligations.
Accenture, Booz Allen and Deloitte did not respond to requests for comments.
Another $1.4 billion cut was an Air Force contract held by Accenture to resell enterprise cloud IT services.
This contract may be the Air Force Cloud One task order that Accenture won in September. It had a $1.6 billion ceiling over five years and was described as cloud reselling contract across multiple cloud services.
When Accenture officially announced the win in Octoer, the company said it was a managed services contract with features such as real-time cost transparency and multi-cloud billing. According to Deltek data, only $48 million in work has been obligated through the contract.
Other cancellations announced this week include $500 million in business process consulting work at the Navy’s administrative offices of the bureau of medicine.
Also being cut is a DARPA IT helpdesk contract that duplicates services that DISA could provide.
DOD did not identify the contractors involved at DARPA and the Navy.
While the contracts are being terminated, the work will shift to DOD personnel, Hegseth said.
DOD is also pausing $500 million in grants with Northwestern and Cornell universities, which is on top of $70 million grants that the department froze at Columbia, Penn, Brown, and Princeton universities.
“As if any of these institutions need more government money at all,” Hegseth said.
To date, the DOGE has found $6 billion in contract cuts at DOD, including this latest batch, in the first six weeks that it has been combing through the department’s spending, according to Hegseth.
The memo also says that DOGE and DOD will work together over the next 30 days to prepare a plan to in-source IT consulting and management services to the department’s civilian workforce. The plan will include how to negotiate better pricing on software and cloud services. “So the DOD pays no more for IT services than any other enterprise in America,” according to the memo.
By April 18, DOD and DOGE will complete an audit the department software licenses so it is only paying for features it uses and at the most favorable rates.
Below is Hegseth’s announcement of the cuts:
