Pentagon to Terminate $5.1 Billion in Contracts with Accenture, Deloitte, and Other Firms

U.S. Defense Secretary Pete Hegseth announced that the termination of several information technology services contracts is part of a broader effort to cut what he described as "non-essential spending on third-party consultants."

“These contracts represent non-essential spending on third-party consultants for services that Pentagon employees are fully capable of performing,” Hegseth said, emphasizing the need to streamline operations and prioritize in-house capabilities.

The canceled contracts, totaling $5.1 billion and involving major firms such as Accenture and Deloitte, are under review as part of the Department of Defense’s push for greater efficiency and fiscal responsibility.

The terminated contracts span a range of consulting services provided to the Navy, Air Force, Defense Advanced Research Projects Agency (DARPA), and the Defense Health Agency.

In a video posted on X (formerly Twitter), Hegseth said the services included “ancillary things like consulting and other non-essential services,” which the Pentagon now plans to bring in-house.

As part of the restructuring, Hegseth directed the Pentagon’s Chief Information Officer to work over the next 30 days with Elon Musk’s Department of Government Efficiency to develop a plan for cutting and in-sourcing IT consulting and management services across the Department of Defense.

The memo also indicated the Pentagon will seek to negotiate “the most favorable rates” for its cloud computing services moving forward.

Representatives for Accenture, Deloitte, and Booz Allen Hamilton did not immediately respond to requests for comment.

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Source: Thehindubusinessline