US Defense Secretary Pete Hegseth signed a memorandum on Thursday outlining the reduction of $5.1 billion in contracts deemed “wasteful” by the Department of Defense. The cuts target nonessential services such as consulting, cloud IT services, and business process consulting.
The cuts include $1.8 billion in consulting contracts awarded by the Defense Health Agency, $1.4 billion for an enterprise cloud IT services contract with a software reseller, and a $500 million contract for business process consulting, the Pentagon confirmed.
This reduction follows last month’s announcement of $580 million in cuts across various programs, contracts, and grants, as part of a broader initiative in collaboration with the unofficial Department of Government Efficiency. The team, led by tech entrepreneur Elon Musk, is focused on reducing government expenditure.
“Today’s cuts bring the total savings to nearly $6 billion in just six weeks since the Department of Government Efficiency began its efforts here at the Defense Department,” said Hegseth in a video message.
While the Department of Government Efficiency’s team claims significant savings, previous reports have been criticized for inaccuracies, including instances where canceled spending was counted or items were listed multiple times. Musk himself acknowledged in February that mistakes were possible during the process.
Hegseth had previously met with Musk at the Pentagon to discuss the efficiency team’s initiatives. However, Musk’s team has faced criticism for its approach to downsizing, including accusations of improper layoffs and cuts to services like the Social Security Administration. There has also been criticism over Musk’s involvement in defense contract efforts, as it raises concerns about potential conflicts of interest.