Defense Secretary Pete Hegseth’s new memo ordering the termination of several IT services contracts lacks clarity, provides vague instructions and unrealistic deadlines, and contradicts previously issued guidance that seeks to reshape the defense civilian workforce, according to a nonpartisan watchdog group.
In an April 10 memo, Hegseth said he plans to cut several IT services contracts that, he argues, can be handled by the department’s civilian workforce or fulfilled directly with existing procurement resources.
The contracts, Hegseth said, “represent non-essential spending on third party consultants,” and that the work can be “more efficiently performed by the highly skilled members of our DoD workforce using existing resources.” He also gave the DoD chief information officer 30 days to devise a plan on how the department will in-source IT consulting and management services to its civilian workers.
Days prior, Deputy Secretary of Defense Stephen Feinberg directed senior Pentagon leaders to conduct a detailed analysis of the Defense Department’s civilian workforce. In a memo signed on April 7, Feinberg said every civilian role should be “reclassified, outsourced, or removed” if it does not “directly enable lethality, readiness, or strategic deterrence.” He also directed the Pentagon leadership to identify civilian functions that are “not inherently governmental” and prioritize them for privatization.
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“Within three days of each other, you’ve got the secretary of defense and the deputy secretary of defense saying apparently contradictory things. One of them wants to in-source, the other one wants to outsource, and that just makes it difficult to take either one of them seriously,” Greg Williams, director of the Center for Defense Information at Project on Government Oversight, told Federal News Network.
The memo comes as the Defense Department continues its effort to shrink the size of its civilian workforce by about 60,000 jobs.
The Defense Department is currently offering civilians the deferred resignation program and Voluntary Early Retirement Authority. Officials told employees that these offers are their final chance to leave the federal service voluntarily before potentially being subject to layoffs. The department has already laid off probationary employees, many of whom were never reinstated despite a judge’s rule to bring those workers back.
The memo lists four categories of contracts targeted for termination but lacks detail to identify them.
Among the contracts to be terminated are:
A Defense Health Agency contract for consulting services from Accenture, Deloitte, Booz Allen, which Hegseth said will save the Pentagon $1.8 billion.
An Air Force contract with Accenture to re-sell third party Enterprise Cloud IT Services worth $1.4 billion.
A Navy contract for business process consulting services for administrative offices, which could save $500 million.
A DARPA contract for IT Helpdesk Services that Hegseth said could be fulfilled by the DISA workforce.
The memo suggests the department’s civilian workforce is able to take on the extra work, while simultaneously directing the CIO office to come up with a plan on how the department will in-source IT services. Williams said it’s possible that the Defense Department has evaluated whether its civilian workforce can take on the work previously performed by contractors, but that “it is strange that [Hegseth] would make such an assertion without offering any evidence in support of it.”
“On average, a contractor personnel per full time equivalent cost two to three times as much as a DoD civilian employee. At POGO we believe what he’s suggesting is, in general, a good idea. I’m delighted that he’s looking for these kinds of opportunities. But it’s hard for me to take his efforts seriously, because he’s provided so little information about them and has so little experience managing this kind of thing,” Williams said.
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Hegseth also directed the DoD CIO to conduct an audit of the DoD’s software licenses to ensure the department is only paying for the licenses it actually uses.
“He proposes to do some things that just are not realistic in my experience. I’ve heard of software audits for individual departments in the government, meaning not like the Department of Defense, but a small office taking years. The idea that someone is going to figure out what software a three million person organization is using within a week seems absurd,” Williams said.
In addition, Hegseth said the department is pausing more than $500 million in grants to Northwestern and Cornell universities — on top of the $70 million in grants the DoD had already paused at Columbia, Penn, Brown and Princeton.
Last week, Cornell officials said the university had received more than 75 stop-work orders from the Department of Defense. The affected grants supported “work of significance for our national defense, the competitiveness of our economy, and the health of our citizens,” including research into new materials for jet engines, propulsion systems, large-scale information networks, robotics, superconductors, space and satellite communications, and cancer research.
“As if any of these institutions need more government money at all,” Hegseth said.
Hegseth also directed the termination of 11 contracts across the department that “support Diversity, Equity and Inclusion (DEI), climate, Covid-19 response, and non-essential activities.”
Overall, Hegseth said DOGE is saving the Pentagon $5.1 billion, which represents about 0.61% of the defense budget.
“If they were focused on things like the F-35 — the most expensive weapon system in history that has never met its performance requirements, they would already have saved $2 trillion. Instead, they seem to be focused on relatively small consulting contracts, women, people of color and transgender people,” Williams said.
If you would like to contact this reporter about recent changes in the federal government, please email anastasia.obis@federalnewsnetwork.com or reach out on Signal at (301) 830-2747
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