On its “Wall of Receipts,” the Department of Government Efficiency took credit for canceling an IT services contract to 700 military hospitals—but the contract was never actually canceled.

Part of the Department of Government Efficiency’s (DOGE’s) sweeping cost-cutting efforts across the federal government conducted last year were within the Department of Defense. Of course, no one with a brain can doubt that there is plenty of waste within the Pentagon, and the proposed $1.5 trillion budget request for fiscal year 2027 (FY27) isn’t likely to improve matters.

Yet one problem in particular should raise eyebrows. One of the contracts that DOGE recommended to be cut was one valued at $1.76 billion to provide information technology (IT) services to the Defense Health Agency (DHA), supporting its more than 700 military treatment facilities around the world.

“The contractor will provide the expertise, technical knowledge, staff support, and other related resources necessary. The nine GSP scope areas include: IT Service Desk; Database, Application, and Web Development; Identity Management and Desktop Support; Data Center Operations; Information Assurance; Network Operations; Telecommunications; Clinical Informatics; and Information Business Operations,” read the June 2023 contract notice from the DoD.

The five-year indefinite-delivery/indefinite-quantity contract was split across multiple IT providers in Virginia and Texas. It featured a potential five-year extension, with a $2.4 billion ceiling, and was meant to standardize IT support across the DHA.

IT support for 700-plus military hospitals would seem to many observers like the sort of service that should be deemed critical, so it is unclear how it ended up on the proverbial chopping block. Apparently someone in the Pentagon must have agreed, as the Government Accountability Office (GAO) acknowledged in its latest report that the DHA’s IT contract was never, in fact, canceled. Even so, the total value of the contract was included on DOGE’s “Wall of Receipts” totaling $215 billion—or $1,335.40 per American taxpayer—in estimated savings.

“DOGE reported $1.7 billion in savings on the Department of Defense’s Defense Health Agency contract for IT services at more than 700 military treatment facilities worldwide. While DOGE initially identified the contract for termination, in the end, no action was taken to terminate the contract or to reduce scope, value, or funding. Thus, no savings were achieved,” the GAO report explained.

The watchdog further noted that Pentagon program leadership and contracting officials met with DOGE, discussed the work being conducted under the contract, after which DOGE acknowledged it wouldn’t terminate the contract. Nor was there any reduction in the scope of work.

“While no action was taken on the contract, the Wall of Receipts continued to report savings of more than $1.7 billion,” the GAO added.

Up to $27 Billion in DOGE Savings Was Never Actually Saved

It is unclear why the figures remained on the Wall of Receipts, even after it was determined that the contract wouldn’t be terminated. The simplest answer may have been that it was just too big to remove.

According to the GAO, within the Pentagon, the Department of the Air Force (DAF) and the DHA “represented the top two largest total reported savings for DOD contracts that could be matched to FPDS (Federal Procurement Data System).” Cuts within the entire DAF represented about 27 percent of the savings, and DHA accounted for 9 percent of total reported savings within the Pentagon.

There were just two examples. The GAO also found that DOGE claimed to have saved more than $61 billion by cutting 13,476 contracts, but noted that 2,503 of them—accounting for $27.4 billion in total—were never terminated.

Why Did DOGE Want to Cut IT Contracts?

DOGE has typically declined to explain its reasoning for why particular contracts were terminated, why some employees were fired, or why some departments and agencies were closed. The official mission statement was that it was to eliminate perceived waste, fraud, and abuse, reduce federal spending, and downsize the civil service. Critics have argued that the entire process was badly handled, and that it affected vital public services and national security operations.

The situation with the IT contracts has been especially worrisome. The federal government already relies on aging computer networks and outdated infrastructure. IT is especially vital to the Pentagon, serving as the digital backbone for global military operations, ensuring that there is communication, intelligence sharing, and administrative logistics across the entire department.

Security experts might also question whether it was the proper course of action to scuttle the IT department with DHA, given that health care providers and insurance companies are prime targets for cyberattacks. These institutions store high-value, permanent personal data and operate critical systems where downtime directly threatens patient safety, forcing many organizations into paying steep ransoms when attacked.

Although the DHA hasn’t ever been directly attacked or suffered a successful breach of its core networks, it has been repeatedly impacted by major cyberattacks on its commercial medical contractors and its third-party prescription processors.

Given those facts, it should be seen as penny smart and pound foolish even to contemplate terminating the DHA contract. Fortunately, it remained in place—and the question facing observers and oversight agencies today is not why DOGE tore up a vital military health contract, but merely why it falsely took credit for doing so.

About the Author: Peter Suciu

Peter Suciu has contributed to dozens of newspapers, magazines and websites over a 30-year career in journalism. He regularly writes about military hardware, firearms history, cybersecurity, politics, and international affairs. Peter is also a contributing writer for Forbes and Clearance Jobs. He is based in Michigan. You can follow him on Twitter: @PeterSuciu. You can email the author: Editor@nationalinterest.org.

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