The US Department of Defense in a surprising move to stop what it calls “non-essential spending”, has cancelled $5.1 billion worth of IT services contracts with consulting big guns, Accenture and Deloitte.
The move, confirmed in an internal memo dated April 10 and revealed today April 11, came at the hands of Defense Secretary Pete Hegseth, who called the canceled deals “a waste” and said they have duplicate the responsibilities that, according to Hegseth, Pentagon staff are well-equipped to handle.
“These terminations are worth $5.1 billion in wasteful spending… and about $4 billion in estimated savings,” said Hegseth, hinting at a broader move to reduce dependence on consultants working outside the military chain of command. 
The scrapped contracts were pieces of broader IT modernization efforts across multiple defense departments, but are now questioned for causing bloated budgets. Hegseth instead highlighted a move towards giving internal teams more power and a more direct and lean operation away from involving third-parties.
The revelation is anticipated to have a wide impact across Washington and Silicon Valley – and could affect future hires for consulting firms working with the federal government.
At Reagan officials will not comment on how many contracts, though industry analysts note tonight has been one of the biggest single day contract cancellations in the last century.
The affected companies have so far not made formal statements.
This massive suspension reflects the Defense Department’s latest cost-cutting initiative—one that is likely to change the course of contract performance for the U.S. military.
