GAO: DHS likely won’t realize most claimed contract savings

Most of the more than $10.5 billion in potential savings that the Department of Homeland Security attributed to contract terminations is unlikely to materialize, according to a new Government Accountability Office audit.

GAO found that DHS fully or partially terminated 438 contracts between Jan. 20 and Sept. 30, 2025. The department had obligated more than $1.6 billion on those contracts before termination. Through March 31, 2026, DHS had deobligated more than $249 million but incurred about $157 million in additional obligations, leaving a net deobligation of about $92.4 million.

That net figure is not the same as a final measure of lifetime savings. GAO said the department continued obtaining many of the same goods and services through other contracts, which can reduce or eliminate the savings attributed to the original cancellations.

What GAO found

GAO published report GAO-26-109096 on Sept. 3, 2026. The review examined DHS contract actions from January through September 2025 that were part of the administration’s federal cost-cutting initiative.

The 438 contracts were terminated for convenience, a federal procurement process that allows the government to end all or part of unfinished work when doing so is determined to be in the government’s interest. GAO cautioned that Federal Procurement Data System records do not distinguish between complete and partial terminations, so an undetermined number of the contracts may still have active work.

GAO’s analysis covered the period from each termination through March 31, 2026. Of the 438 contracts, 261 had deobligations totaling about $249.2 million, 32 had additional obligations totaling about $156.8 million, and 145 had no additional obligations or deobligations. The result was a net reduction in obligations of about $92.4 million.

Why the $10.5 billion figure is different

DHS publicly reported that the terminations could potentially avoid more than $10.5 billion in costs over the contracts’ lifespans. GAO said that figure was based on the maximum amount DHS could have obligated under the contracts, not on a demonstrated estimate of what the department would otherwise have spent.

GAO identified a second problem: ending a contract does not necessarily end the underlying requirement. If DHS still needs the same goods or services and purchases them through another contract, that spending has been shifted rather than avoided.

The issue is concentrated in information technology. Nearly $10 billion, or 95% of DHS’s reported potential cost avoidance, was tied to 30 terminated indefinite-delivery, indefinite-quantity contracts for IT services and equipment. Those contracts covered fiscal years 2025 through 2034.

GAO said DHS obligated more than $1.7 billion in fiscal year 2025 through existing government-wide contracts to meet related IT requirements. That spending was not avoided merely because the earlier contracts were terminated. Additional purchases through those replacement vehicles could reduce the eventual savings further.

Congressional scrutiny

On Sept. 8, House Democrats asked committee leaders to seek testimony from former U.S. DOGE Service head Elon Musk and other DOGE officials about how DHS’s savings figures were calculated and whether the cancellations affected department operations.

The requests are not a scheduled hearing or a completed investigation. They represent an oversight demand by Reps. Bennie Thompson of Mississippi and James Walkinshaw of Virginia, according to federal-management reporting.

A DHS spokesperson told Government Executive that the department had reviewed thousands of contracts, ended hundreds it considered no longer mission-critical and redirected resources to higher-priority operations. The spokesperson described that process as responsible stewardship.

What to watch next

The central accountability questions are whether DHS and DOGE can document how projected savings were calculated, how replacement contracts were tracked and whether public reports clearly separated potential cost avoidance from realized reductions in federal obligations.

The DHS audit also fits into a broader GAO review of DOGE’s “Wall of Receipts,” which found errors and gaps in supporting evidence for some savings claims. The DHS report is narrower: It does not conclude that officials committed fraud, and it focuses on the financial effect of DHS contract terminations and subsequent obligations.

For taxpayers, the practical lesson is that a large federal savings headline may represent the theoretical ceiling of a contract rather than spending that would otherwise have occurred. The more meaningful measures are the funds actually deobligated, the cost of termination settlements and whether the government continues paying for the same work through another acquisition vehicle.

Sources

• Government Executive report on congressional testimony requests
• U.S. GAO review of the DOGE Wall of Receipts

Look for updates to this story

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