Pentagon Cancels $5.1 Billion in IT Contracts with Accenture, Deloitte, and Others
In a sweeping move to reduce government spending and enhance internal efficiency, the U.S. Department of Defense has announced the termination of $5.1 billion worth of information technology service contracts with major consulting firms, including Accenture and Deloitte. The decision, spearheaded by Defense Secretary Pete Hegseth, is aimed at curbing non-essential outsourcing and redirecting resources to core military priorities.
According to a memo issued by the Secretary, the terminated contracts were identified as “wasteful spending,” covering services such as enterprise cloud IT systems and consultancy roles within the Defense Health Agency and the U.S. Air Force. The Department estimates that nearly $4 billion in savings will result from these cancellations.
This action forms part of a larger effort by the Pentagon to reevaluate and restructure its expenditure patterns, prioritizing in-house capabilities over costly external engagements. Secretary Hegseth emphasized that the recovered funds would now be channeled toward critical defense objectives such as reviving combat readiness, strengthening military deterrence, and rebuilding the armed forces.
The move also follows mounting scrutiny over the Pentagon’s fiscal practices, especially after its repeated failure to pass independent audits. The Department of Government Efficiency (DOGE), which was instrumental in evaluating these contracts, played a central role in recommending the terminations after identifying overlaps and redundancy in outsourced services.
While the terminated firms have yet to officially respond, industry observers expect the decision to send shockwaves through the consulting sector, which has long relied on lucrative defense contracts. The shift signals a broader transformation within U.S. defense spending, where accountability and strategic focus are being reasserted amid tightening budget controls.
This development marks a significant recalibration in how the Pentagon approaches vendor relationships, with a clear emphasis on self-reliance, cost control, and mission-oriented spending.
