DOGE, DHS axed IT contracts to save money. Watchdog says it didn’t work
The Department of Homeland Security’s cost-cutting effort last year, which was executed in partnership with the so-called Department of Government Efficiency, didn’t produce the expected results, according to a review of the actions by the Government Accountability Office.
From January to September of 2025, DHS fully or partially cancelled nearly 440 contracts. The agency said the move would amount to around $10.5 billion in cost avoidance with around 95% of that total coming from IT-related contracts.
The tech contracts, however, were set up to fulfill IT requirements. Most had a 10-year period of performance through fiscal 2034. Once they were axed, DHS still needed to find a way to bridge the gaps — and the price tag wasn’t negligible.
The agency ended up spending $1.7 billion last year through other contracts to meet the requirements, muddying potential cost savings.
“Any additional obligations for the same requirements against the government-wide contracts in future years, through fiscal year 2034, would further reduce actual cost avoidance,” the watchdog said in its report. “As a result, actual cost avoidance will be less than the amount that DHS has reported.”
The GAO also warned that the axed contracts will affect how DHS purchases IT services moving forward, but it’s unclear what future impact that will have on costs, if any.
In addition to pouring more money in various contracts while scrapping others, DHS obligated funds for settlement costs and ongoing work under partially terminated contracts, further reducing the savings potential.
“Should DHS subsequently obligate additional funds to perform the same or replacement work associated with terminated contracts, the ultimate amount of savings or cost avoidance would be further diminished,” the GAO said.
The Office of the CIO, for example, partially terminated a contract that the agency had already allocated nearly $167 million. Then, the agency spent more than $48 million for ongoing work, creating a complex picture of the true cost avoidance total.
The audit ran from March 2026 to this month. The watchdog reviewed DHS documents and information from the Federal Procurement Data System, which served as the government’s repository for acquisition data before it was sunset in February and replaced by Sam.gov.
GAO said the report is the first in a series that aims to uncover the impact of the DOGE partnership with DHS. The next investigation will take a closer look at certain grant actions last year. Another forthcoming audit will examine DHS’s workforce reductions.
The latest report comes amid continued skepticism of the purported cost savings touted by the now-defunct DOGE group.
Last month, GAO said the group used unclear methods to produce its figures and highlighted DOGE’s lack of documentation regarding ethics and records management training.
While questions linger about the group’s activities following its official end on July 4, DOGE alumni remain scattered throughout the federal government.
Treasury Department CIO Sam Corcos entered government as a member of the group and now has taken on three roles within the General Services Administration. DHS’s new CIO also has DOGE roots.
