Pentagon hits Accenture, Booz Allen and Deloitte with contract cancellations

The Defense Department says it has found $4 billion in savings by cutting consulting and non-essential contracts with Accenture's U.S. federal subsidiary, Booz Allen Hamilton, Deloitte and other unnamed companies.

The contracts had a total value of $5.1 billion, according to a DOD memo and a video released of Defense Secretary Pete Hegseth announcing the cuts Thursday night.

The cuts are part of the Department of Government Efficiency reviews at DOD.

Of the $5.1 billion in cuts, $1.8 billion were found at the Defense Health Agency. That involves contracts held by Accenture, Booz Allen, Deloitte and other unnamed contractors.

GovTribe data indicates Booz Allen has received $345 million in contract obligations at DHA over the last three years. Deloitte has $264 million over the same period and Accenture is listed with $66 million in obligations.

Officials at Accenture Federal, Booz Allen and Deloitte did not respond to requests for comments.

A second major cut totals $1.4 billion and involves a Air Force contract held by Accenture Federal to resell enterprise cloud IT services.

This contract may be the Air Force Cloud One task order that Accenture won in September. It had a $1.6 billion ceiling over five years and was described as a reselling contract across multiple cloud services.

When Accenture Federal officially announced the win in October, the company said it was a managed services contract with features such as real-time cost transparency and multi-cloud billing. Deltek data estimates only $48 million in work has been obligated through the contract.

Other cancellations announced include $500 million in business process consulting work at the Navy’s Administrative Offices of the Bureau of Medicine.

Also being cut is a Defense Advanced Research Projects Agency contract for IT help desk services, which DOD says could be provided by the Defense Information Services Agency.

DOD did not identify the contractors involved at DARPA and the Navy.

Hegseth said work being performed under the terminated contracts will shift to DOD personnel, Hegseth said.

DOD is also pausing $500 million in grants with Northwestern and Cornell universities. That goes on top of $70 million grants DOD froze at Columbia, Penn, Brow and Princeton universities.

“As if any of these institutions need more government money at all,” Hegseth said.

Hegseth said DOGE has found $6 billion in contract cuts at DOD to-date, including this latest batch, in the first six weeks that it has been combing through the department’s spending.

DOD's memo also says that DOGE and the Pentagon will work together over the next 30 days to prepare a plan to in-source IT consulting and management services to the civilian workforce.

The plan will include how to negotiate better pricing on software and cloud services with the intent to ensure "DOD pays no more for IT services than any other enterprise in America," according to the memo.