The GOVCON industry continues to be impacted by DOGE, and we at FedSavvy Strategies continue to analyze the effects and risk to future contracting activity. In February, we released a short analysis on select U.S. Government agencies with varying degrees of potential impact from DOGE.
This month, we are looking at specific contract impacts to understand the pattern of DOGE-related contract terminations and how this affects the way government contractors market their products and services to the government.
Note: This blog utilizes some data from terminated or partially terminated contracts as reported by G2Xchange in April 2025.
The FedSavvy Strategies Takeaway
- Across the government, DOGE is targeting programs associated with professional and management services, showing a strategic pivot away from the government’s use of external firms and instead using direct services to reduce non-critical overhead.
- Agencies receiving the most cuts by spending thus far include the U.S. Department of the Interior (DOI), U.S. Department of Health and Human Services (HHS), U.S. Department of Veterans Affairs (VA), U.S. Department of Education (DOED), and U.S. Department of Homeland Security (DHS).
- DOI related contract cancellations are mostly due to DOI being utilized as an assisted acquisition services organization by HHS Administration for Children and Families (ACF), U.S. Department of Agriculture (USDA), and the U.S. Agency for International Development (USAID).
- These agencies are terminating professional and administrative services, evaluation and learning study programs, and redundant or non-essential IT support and digital services.
- Instead of continuing these programs as they are, the government’s goal is to reduce its external support contracts in favor of more self-sufficient operational models and shifting work being performed under these terminated contracts to the civilian workforce.
Terminations By Service Area
Figure 1 – Terminated contracts organized by PSC. Source: G2Xchange.
As depicted in the graph above, DOGE appears to be targeting programs associated with professional and management services. Several codes (R499, R408, R425, R699) fall under professional and management services, indicating a focus on cutting consulting, program management, and administrative support services.
This includes programs like the $241 million ceiling value U.S. Department of Veterans Affairs (VA), Veterans Benefits Administration (VBA) Records Research Center Support Services contract held by Le’Fant, which researches military records, performs data analysis, and provides quality control to help veterans receive the benefits they earned faster by expediting the appeals process.
Other commonly terminated programs include those under the IT services category, including contracts providing IT portfolio management and other general IT service delivery support. It appears that DOGE views these contracts as redundant and non-essential; therefore, these services are expected to shift to being performed directly by government agencies.
There is also a focus on cutting programs under Studies and Analysis related services (e.g., PSC B542), which are almost all U.S. Department of Education (DOED) contracts held by research companies like Westat, Research Triangle Institute (RTI), AEM Corporation, and ABT Global. For example, this includes the $110 million ceiling value Early Childhood Longitudinal Study, Kindergarten Class of 2022-23, designed and conducted by Westat, which provides comprehensive data on children’s early learning, development, and experiences in early care and education settings.
Terminated Contracts By Federal Agency
Figure 2 – Terminated contracts by awarding agency and their total contract value. Source: G2Xchange.
Thus far, the highest value of terminated contracts were awarded by DOI, HHS, VA, DOED, and DHS (conversely, the General Services Administration [GSA] has terminated the highest number of contracts). The nature of services offered within each agency’s terminated contracts can be described as follows:
- DOI: On the surface, this looks as though DOI was aversely affected by contract cancellations. This is only partly true. When we examine the funding source, this high value of contract value is really made up of HHS Administration for Children and Families (ACF), U.S. Department of Agriculture (USDA), USAID and an array of others with only $30 million in DOI funded contracts. The funding customers who are have cancelled contracts utilized DOI to perform assisted acquisition services. We add this editorial comment to clarify what could be easily confused as DOI reductions in spending when it is really connected to other agencies.
- HHS: Terminated contracts were most prevalent in Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH), and Administration for Children and Families (ACF). Terminated programs generally fall under DEI-related initiatives and health equity programs, administrative and professional services, evaluation and learning studies, technical assistance and capacity building, and redundant or non-essential IT and digital services contracts.
- VA: Terminated contracts include PMO support, strategic advisory services, strategic communications and marketing campaigns, data analytics and technology services, and support to the Veterans Benefits Administration (VBA). Many terminations involve support for programs, rather than direct patient care.
- DOED: Most terminated contracts focused on education-related research, evaluation, data collection, and technical support. This includes studies on student aid, literacy programs, teacher development, and various federally funded educational initiatives.
- DHS: Terminated contracts mainly affected U.S. Customs and Border Protection (CBP) and the Office of Procurement Operations within DHS Headquarters. Terminated programs centered on IT support and digital modernization, strategic consulting, and performance evaluation roles.
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