In a decisive move to cut down on government expenditure, U.S. Defense Secretary Pete Hegseth has ordered the termination of IT service contracts valued at $5.1 billion. The contracts, held by prominent consulting firms including Accenture and Deloitte, were deemed non-essential and labeled as avoidable expenses by the Pentagon chief.
According to an internal memo dated April 10 and released Thursday by the Department of Defense, Hegseth emphasized that the services provided under these contracts could be efficiently handled by Pentagon personnel. “These terminations represent $5.1 billion in wasteful spending and nearly $4 billion in estimated savings,” the memo stated.
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Hegseth criticized the heavy reliance on third-party consultants for routine technological services, describing it as an inefficient use of taxpayer dollars. He underscored the need for greater self-reliance and better utilization of internal talent within the Department of Defense, especially in areas where in-house expertise is sufficient.
The decision aligns with broader efforts by the current administration to streamline defense spending and prioritize strategic investments. By eliminating redundant consultancy-based contracts, the Pentagon aims to redirect resources toward critical defense capabilities and internal workforce development.
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The terminated contracts include various IT-related services, ranging from system integration to digital transformation projects. Officials have not disclosed a full list of the affected projects but confirmed that the decision would not impact core defense operations.
The move signals a shift in defense procurement strategy, with a focus on cost-efficiency and strengthening in-house technical capabilities.