WASHINGTON, D.C: U.S. Defense Secretary Pete Hegseth has canceled several technology service contracts worth US$5.1 billion. These included deals with big companies like Accenture, Booz Allen Hamilton, and Deloitte, according to a memo from the Pentagon.
Hegseth said the contracts were for services that Pentagon employees could handle themselves. He called the spending "non-essential" and said ending the contracts could save about $4 billion.
After the announcement, Booz Allen's stock dropped 2.4 percent and Accenture's fell 2 percent in early trading. The companies have not yet responded to requests for comment.
The canceled contracts covered consulting work for the Navy, Air Force, DARPA, and Defense Health Agency. In a video on X (formerly Twitter), Hegseth said these were for extra services like consulting, which would now be handled internally.
He also directed the Pentagon's tech chief to work with Elon Musk's Department of Government Efficiency over the next 30 days to create a plan for cutting and bringing tech services in-house. The Pentagon also plans to negotiate better prices for cloud services.
