Pentagon Cancels $5.1 Billion in Contracts to Reallocate Funds for Military Readiness

Defense Secretary Pete Hegseth's latest cost-cutting measure targets consulting services and nonessential programs to prioritize warfighter support and operational efficiency.

• Defense Secretary Pete Hegseth signed a memorandum canceling $5.1 billion in Pentagon contracts, including $1.8 billion in consulting services and $1.4 billion in enterprise cloud IT services.
• A $500 million Navy business process consulting contract and a $500 million DARPA IT help desk services contract were terminated due to redundancy with existing capabilities.
• The Department of Defense also cut 11 contracts tied to diversity, equity, and inclusion (DEI), climate change initiatives, and COVID-19 response, labeling them as nonessential.
• Savings from these cuts will be redirected to improve healthcare for warfighters and their families, aligning with the department's broader mission-critical priorities.
• This move builds on earlier cost-saving measures, bringing the total eliminated wasteful spending to nearly $6 billion since February 2025.

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