Defense Secretary Pete Hegseth announced Thursday the termination of $5.1 billion worth of Pentagon IT and consulting contracts, targeting major firms such as Accenture, Deloitte, and Booz Allen Hamilton. The move, he said, is aimed at eliminating “wasteful spending” and redirecting funds toward core defense priorities.
In a Department of Defense memo, Hegseth ordered the cancellation of a significant Defense Health Agency contract that had engaged multiple consulting firms. “These are services our civilian workforce can and should be performing,” Hegseth stated, adding in a video message that the funds would be better used “on better healthcare for our warfighters and their families, instead of $500-an-hour business process consultants.”
Also scrapped was a U.S. Air Force contract with Accenture to re-sell third-party Enterprise Cloud IT services. Hegseth argued the services could be obtained through existing government procurement channels without the added cost of middlemen.
The cuts extend beyond IT. Hegseth’s memo outlined the termination of 11 other contracts supporting what he described as “non-essential” efforts, including programs related to diversity, equity, and inclusion (DEI), climate initiatives, and the Pentagon’s COVID-19 response.
“These terminations represent $5.1 billion in wasteful spending,” Hegseth said, projecting nearly $4 billion in savings to be reallocated to what he called critical priorities: “Revive the Warrior Ethos, Rebuild the Military, and Reestablish Deterrence.”
While specific reallocation plans were not detailed, Hegseth expressed gratitude to the Department’s internal watchdogs and external allies who helped uncover the spending. “We’re excited to make these cuts on behalf of you—the taxpayer—and the warfighters at the Department,” he said in a video posted to X (formerly Twitter).
The decision marks a sharp pivot in Pentagon budget strategy, potentially signaling further scrutiny of defense contracts and civilian consultancy roles in military operations.