WASHINGTON, September 10 — The Government Accountability Office has concluded that the Department of Homeland Security will not realize most of the $10.5 billion in cost savings it publicly claimed from terminating contracts, delivering a blunt independent verdict on one of the administration’s signature spending-reduction efforts. The finding, published September 3 and reported by Legis1 Editorial on Wednesday, September 9, examines a contract termination campaign that began after the Trump administration directed federal agencies in early 2025 to review and potentially terminate contracts to reduce federal spending.
DHS conducted a department-wide review of over 17,000 contracts to assess their importance to the agency’s mission, working in consultation with the United States Department of Government Efficiency, the body the administration established to assist agencies in carrying out its priorities.
What the procurement data actually shows
GAO’s independent analysis of federal procurement data covers January 20, 2025, through September 30, 2025. In that window, DHS terminated 438 contracts and deobligated a net total of over $92 million on those contracts. The department had obligated over $1.6 billion on those same 438 contracts before terminating them.
The internal breakdown matters. Of the 438 terminated contracts, 261 had deobligations since termination totaling $249,158,880, while 32 carried additional obligations of $156,791,323.
The remaining 145 saw no additional deobligations or obligations at all. DHS’s own public accounting diverges from GAO’s. The department reported that from late January 2025 through September 30, 2025, it terminated 521 contracts with an obligated value at termination of over $1.2 billion and nearly $181 million in deobligations since termination.
The gap between DHS’s count of 521 and GAO’s count of 438 reflects differences in how the two entities categorized and counted contract terminations.
Two reasons the $10.5 billion figure does not hold
GAO found the $10.5 billion DHS claimed as potential cost avoidance overstates actual costs avoided for two distinct reasons. First, it represents the maximum that could be obligated on these contracts, not how much would have actually been obligated. Second, if DHS continues to need the goods and services covered by those terminated contracts and meets those needs through other contracts, then those costs would not be avoided but incurred through those contracts instead.
Ninety-five percent of DHS’s reported $10.5 billion in potential cost avoidance was attributable to 30 terminated indefinite delivery and indefinite-quantity contracts for information technology requirements. Those 30 IT contracts had 10 years of performance spanning fiscal years 2025 through 2034.
DHS obligated over $1.7 billion in fiscal year 2025 through existing government-wide contracts to meet the same IT requirements covered by the 30 terminated IDIQ contracts. Those costs were not avoided. They were incurred through alternative vehicles.
The approval architecture and the credibility gap
In March 2025, DHS began requiring approval by the Deputy Secretary for all contract terminations regardless of value and for awards of any contracts worth $25 million or more. The requirement for Deputy Secretary approval of contract terminations was rescinded in April 2026. Strategically, the calculus here is straightforward.
The administration built its cost-cutting agenda on headline projections, and GAO has now measured those projections against the procurement record. With actual net deobligations of $92 million against a claimed $10.5 billion in potential cost avoidance, and with DHS already obligating $1.7 billion through alternative contracts to meet the same IT requirements, the administration faces a credibility gap on its cost-cutting agenda.
What this signals for the broader stakes is that the gap will widen, not narrow. As DHS continues to meet its operational needs through other contracts through fiscal year 2034, the actual cost avoidance will shrink further, making the initial projections increasingly difficult to defend. Watch whether Congress presses DHS on the discrepancy between its 521-contract count and GAO’s 438, and whether the department revises its public savings claims as the IDIQ requirements continue to be met through other vehicles.
