Pete Hegseth Announces $5.1 Billion DOD Contract Cuts

Secretary of Defense Pete Hegseth announced Thursday that the Department of Defense will cut $5.1 billion in “wasteful” contracts, including with consulting firms Deloitte, Accenture, and other firms.

"That's with a 'B'—$5.1 billion in DOD contracts for ancillary things like consulting and other nonessential services," Hegseth said in a recorded video announcing the decision.

The cuts include $1.8 billion in consulting contracts awarded by the Defense Health Agency to various private firms. It also includes a $1.4 billion cloud IT services contract awarded to a software reseller and a $500 million Navy contract for business process consulting.

In a memo, Hegseth said the DoD would be cutting a Defense Health Agency contract "for consulting services from Accenture, Deloitte, Booz Allen, and other firms that can be performed by our civilian workforce."

The department is also scrapping a $500 million Defense Advanced Research Projects Agency (DARPA) contract for IT help desk services, which Hegseth called “completely duplicative” of services already provided by the Defense Information Systems Agency.

"We need this money to spend on better health care for our warfighters and their families, instead of $500 an hour business process consultant," Hegseth explained. "That's a lot of consulting."

Hegseth also confirmed the department is terminating 11 contracts related to diversity, equity, and inclusion (DEI), climate change initiatives, the Pentagon’s COVID-19 response, and related “nonessential” activities.

"We are committed to rooting out DEI — root and branch — throughout this department … [And] I'm going to keep looking," Hegseth added. The announcement follows an initial pledge by Hegseth made in March to cut $580 million in programs, contracts and grants.

"If you're keeping score at home, today's cuts bring our running total to nearly $6 billion in wasteful spending over the first six weeks of the Department of Government Efficiency effort here at the Defense Department," Hegseth said.

Hegseth credited the Department of Government Efficiency (DOGE) with helping to identify the cost savings. “We're excited to make these cuts on behalf of you, the taxpayer and the warfighters here at the department,” he said.