The Government Accountability Office (GAO) said Sept. 3 that the Department of Homeland Security’s (DHS) estimate of more than $10.5 billion in potential savings from 2025 contract terminations will not fully materialize. The watchdog said nearly all of the projected cost avoidance is tied to IT contracts whose requirements are still being purchased elsewhere.
In a new report, GAO found that nearly $10 billion – or 95% – of DHS’ reported potential cost avoidance came from terminating 30 indefinite-delivery/indefinite-quantity contracts for IT services and equipment. Those contracts covered fiscal years 2025 through 2034.
DHS told GAO that it obligated more than $1.7 billion in fiscal 2025 through existing government-wide contracts to meet the same IT requirements, meaning those costs “were not avoided but incurred through other contracts,” according to the watchdog.
GAO said future spending for those requirements through fiscal 2034 would further reduce actual cost avoidance.
“As a result, actual cost avoidance will be less than the amount that DHS has reported as potential cost avoidance,” GAO said. “While these terminations will affect how DHS purchases some information technology services going forward, it is unknown what future impact they will have on costs going forward, if any.”
The findings stem from a department-wide review DHS conducted in 2025 after President Donald Trump directed agencies, in consultation with their Department of Government Efficiency DOGE teams, to review contracts and grants for potential termination or modification.
DHS reviewed more than 17,000 contracts and categorized them as “mission critical,” “mission essential,” or “other.” Components then recommended whether contracts should be fully or partially terminated, renegotiated, allowed to expire, or left unchanged.
GAO found that DHS fully or partially terminated 438 contracts for convenience between Jan. 20 and Sept. 30, 2025. The department had obligated more than $1.67 billion on those contracts before termination.
As of March 31, DHS had deobligated more than $249 million from those contracts but also obligated nearly $157 million for expenses, including settlement costs and ongoing work under partially terminated contracts. That left net deobligations of about $92.4 million.
GAO cautioned that even the $92 million figure could fall if DHS later spends additional money on replacement work associated with terminated contracts.
IT accounted for a significant share of the terminated contracts. DHS’ Office of the Chief Information Officer (OCIO) accounted for five terminated contracts with nearly $171.8 million obligated before termination. However, after the contract terminations, GAO found the office then obligated an additional $46.9 million – the highest amount among DHS components examined.
GAO also found that DHS’ public count of 521 contract terminations included duplicate entries and contract vehicles that did not represent orders for goods or services. After adjusting for those issues, GAO identified a total of 438 unique contracts that were fully or partially terminated for convenience.
GAO said DHS did not provide formal comments on the report but submitted technical comments that the watchdog incorporated where appropriate. The report is the first in a planned series examining DHS contract and grant terminations undertaken in 2025.