The Trump administration has promoted its cost-cutting efforts by canceling federal contracts, claiming billions in savings. However, data from the Department of Government Efficiency (DOGE), led by Elon Musk, reveals that nearly 40% of the terminated contracts do not actually save the government any money. This is because many of these contracts had already been paid for or had legally binding financial commitments.
Thousands of Contracts Canceled, but No Savings in Many Cases
DOGE recently released a list of 1,125 federal contracts that were canceled in an effort to reduce government spending. However, their own records, published on the “Wall of Receipts,” indicate that 417 of these cancellations—amounting to a total of $478 million—will not lead to any actual savings.
This happens when contracts are fully obligated, meaning the government is legally required to pay for the services or goods, whether they have been delivered or not. In many cases, the contracts had already been fulfilled, making the cancellations symbolic rather than financially beneficial.
Expert Criticism of the Approach
Charles Tiefer, a retired law professor and government contracting expert, compared the effort to “confiscating used ammunition after it’s been shot.” He argued that canceling these contracts serves no real purpose since the money has already been spent.
He also warned that a “slash and burn” strategy could harm government efficiency by disrupting essential services. Instead, he suggested working closely with contracting officers and inspectors to find real ways to cut costs.
What Types of Contracts Were Canceled?
The canceled contracts covered a wide range of services and purchases, including:
- Media subscriptions: Contracts for subscriptions to news agencies like The Associated Press and Politico were terminated, even though they had already been paid for.
- Research studies and training: Many contracts funded research and employee training programs that had already taken place.
- Software and IT services: Contracts for software and digital services, often necessary for government operations, were among those canceled.
- Internship programs: Contracts that had funded intern programs, many of which had already concluded, were also cut.
In some cases, the cancellations affected government modernization efforts. For example, a $13.6 million contract with Deloitte Consulting was intended to help restructure the CDC’s immunization and respiratory disease division, but it was canceled despite the funds already being obligated.
Examples of Contracts That Were Already Paid For
Several contracts highlight how the government’s commitments remain even after cancellation:
- Office Furniture for HUD
- The Department of Housing and Urban Development (HUD) had awarded a $567,809 contract for new office furniture. Although the contract was set to expire later this year, the agency had already spent the maximum amount with the supplier.
- Carpet Cleaning for USAID
- The U.S. Agency for International Development (USAID) signed a $145,549 contract to clean carpets at its Washington, D.C., headquarters. However, all funds had already been paid to a Native American-owned company in Michigan.
- Transition Services for the Department of Transportation
- A $249,600 contract had been awarded to a firm in Washington, D.C., to assist in the transition from the Biden administration to the Trump administration. The services had already been provided and paid for before cancellation.
Are the Savings Claims Exaggerated?
DOGE has claimed that canceling these contracts will save more than $7 billion, but independent experts have questioned this number. If hundreds of these cancellations do not generate savings, then the actual financial benefit of the program may be much lower than the administration suggests.
The administration defends its actions, stating that canceling contracts—even without immediate savings—helps eliminate unnecessary government spending in the long run. However, critics argue that this approach is ineffective and disruptive.
