Deloitte and Accenture loses major contract from U.S. Defense Department

In a move aimed at tightening defense expenditures, the U.S. Department of Defense has scrapped IT service contracts worth $5.1 billion, impacting major consulting firms such as Deloitte and Accenture. Defense Secretary Pete Hegseth directed the cancellations as part of a broader effort to reduce reliance on outsourced services and boost internal capabilities.

An internal memo dated April 10, released Thursday by the department, outlined the decision. Secretary Hegseth stated that the services in question were non-essential and could be handled more effectively by Pentagon personnel. “These terminations represent $5.1 billion in wasteful spending and nearly $4 billion in estimated savings,” the memo noted.

The affected contracts covered a range of digital services, including system integration, IT infrastructure upgrades, and transformation programs. Officials confirmed that no critical defense operations would be impacted by the decision.

Hegseth voiced concerns over the DoD’s growing dependence on third-party consultants for routine technical work, calling it an inefficient use of taxpayer funds that undermines internal expertise. He reaffirmed a commitment to empowering existing staff and optimizing internal resources.

The move is in line with the administration’s broader agenda to reform defense operations, emphasizing strategic investment, operational efficiency, and fiscal discipline. By cutting redundant consultancy agreements, the department plans to channel resources into essential defense programs and workforce development.

This shift signals a major realignment in defense procurement strategy, underscoring the Pentagon’s intent to strengthen internal capabilities and exercise greater accountability in public spending.