The US’s defense secretary, Pete Hegseth, just ordered the termination of IT and consulting contracts with companies like Accenture and Deloitte, calling it “wasteful spending.”
In a Department of Defense memo, Hegseth said he would cut a Defense Health Agency contract “for consulting services from Accenture, Deloitte, Booz Allen, and other firms that can be performed by our civilian workforce.”
Also on the chopping block is the Air Force’s contract with Accenture to “re-sell third-party Enterprise Cloud IT Services,” which Hegseth says the government can “already fulfill directly with existing procurement resources.”
In the memo, Hegseth also said he was terminating 11 other contracts for “consulting services” that support “non-essential” activities, like Diversity, Equity and Inclusion (DEI), climate matters, and the Pentagon’s COVID-19 response.
Hegseth said the terminations “represent $5.1 billion in wasteful spending” at the DOD and would result in nearly $4 billion in savings.
The savings would be reallocated, Hegseth said, to serve “critical priorities to Revive the Warrior Ethos, Rebuild the Military, and Reestablish Deterrence.”
He did not specify in his memo which Pentagon projects this money would go to.
In response to a request for comment, the DOD directed Business Insider to an X video of Hegseth talking about the terminations.
“By the way, we need this money to spend on better healthcare for our warfighters and their families, instead of $500 an hour business process consultant. That’s a lot of consulting,” Hegseth said in the video.
Hegseth also expressed his gratitude to Elon Musk’s cost-cutting outfit, the Department of Government of Efficiency. DOGE has been slashing federal spending across various agencies, whether it be by laying off thousands of federal workers or shuttering foreign aid programs.
“So we want to thank our friends at DOGE. We want to thank all the folks here that have helped us unpack this, reveal it, and we’re excited to make these cuts on behalf of you, the taxpayer and the warfighters at the Department,” Hegseth said in his X video.
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The Tesla and SpaceX CEO referenced the Defense Department’s $841 billion budget in an op-ed he wrote with Vivek Ramaswamy for The Wall Street Journal in November. Ramaswamy, who was co-leader of DOGE at the time, left DOGE in January.
“The Pentagon recently failed its seventh consecutive audit, suggesting that the agency’s leadership has little idea how its annual budget of more than $800 billion is spent,” the pair wrote.
Last month, Hegseth announced that the Defense Department was terminating over $580 million in programs, contracts, and grants that DOGE had identified as wasteful spending.
Representatives for Accenture, Deloitte, and Booz Allen did not immediately respond to requests for comment from BI.
