DHS Contracts: Reported Potential Cost Avoidance from Terminations Will Not Fully Materialize

What GAO Found In the first half of 2025, the President issued a series of executive orders directing federal agency heads—in consultation with the United States DOGE Service (also known as the Department of Government Efficiency) agency team leads—to review and terminate contracts in order to reduce federal spending, among other things. In response, the Department of Homeland Security (DHS) conducted a department-wide review of over 17,000 contracts to assess their level of importance to the agency’s mission. This assessment resulted in DHS components completely or partially terminating contracts for cost savings. In addition, in March 2025, DHS began requiring approval by the Deputy Secretary for all contract terminations regardless of value and for awards of any contracts worth $25 million or more. The requirement for Deputy Secretary approval of contract terminations was rescinded in April 2026. GAO analysis shows that from January 20, 2025, through September 30, 2025, DHS completely or partially terminated 438 contracts for convenience—meaning that termination of work under the contracts was determined to be in the federal government’s interest. DHS had obligated over $1.6 billion for these contracts prior to termination. Since these contracts were terminated, GAO analysis shows that DHS deobligated a net total of over $92 million on these contracts. These funds represent cost savings in that they reduce federal obligations and may be available for other purposes. However, if DHS should subsequently obligate additional funds to perform similar work associated with terminated contracts, the amount of cost savings or avoidance would be further diminshed. DHS publicly reported on its website that its contract terminations over this time frame could allow the department to potentially avoid over $10.5 billion in costs. However, this overstates actual costs avoided for two reasons. First, it represents the maximum that could be obligated on these contracts, not how much would have actually been obligated. Second, if DHS continues to need the goods and services covered by those contracts and meets those needs through other contracts, then those costs would not be avoided but incurred through those contracts. In fact, GAO found that 95 percent of DHS’s reported $10.5 billion in potential cost avoidance was attributable to 30 terminated indefinite delivery/indefinite-quantity contracts in place for DHS to meet information technology requirements. These contracts had a 10-year period of performance, from fiscal years 2025 through 2034. According to DHS, the agency obligated over $1.7 billion in fiscal year 2025 through existing government-wide contracts to meet those requirements. Thus, $1.7 billion in costs were not avoided but were incurred through other contracts. Additionally, any future obligations for the same requirements against the government-wide contracts in future years, through fiscal year 2034, would further reduce actual cost avoidance. As a result, DHS will not fully achieve the amount of reported potential cost avoidance. Why GAO Did This Study In early 2025, the President directed the heads of federal agencies to implement a series of initiatives to reform government operations, including reviewing federal contracts and grants for termination or modification to potentially save costs. To advance these initiatives, the President established the United States DOGE Service and directed agencies to establish DOGE teams to assist in carrying out administration priorities. GAO was asked to review DHS and DOGE efforts to terminate contracts and grant awards and make reductions to its workforce in 2025. This report, the first in a series, provides information on DHS actions to review and terminate contracts from January through September 2025, and the number and value of contracts terminated. GAO reviewed and analyzed documents such as executive orders directing federal agencies to review and terminate contracts and agency documents directing components on how to conduct these efforts. GAO analyzed federal procurement data to determine the number of contracts terminated by DHS and dollar amounts obligated or deobligated on those contracts. GAO also interviewed officials with DHS’s Offices of the Chief Procurement Officer and Chief Financial Officer about these efforts. For more information, contact Chris Currie at CurrieC@gao.gov.

DHS Contracts: Reported Potential Cost Avoidance from Terminations Will Not Fully Materialize

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