GAO says DHS contract savings will fall short of $10.5 billion estimate
The Department of Homeland Security's reported $10.5 billion cost avoidance from 438 contract terminations between Jan 1 and Sep 30 2025 is unlikely to be realized.
The Government Accountability Office reports that from January 20, 2025, through September 30, 2025, the Department of Homeland Security (DHS) completely or partially terminated 438 contracts for convenience. Prior to termination, DHS had obligated over $1.6 billion on those contracts and subsequently deobligated a net total of over $92 million. DHS publicly claimed the terminations could avoid over $10.5 billion in current and future contract costs, but GAO finds the figure overstated.
GAO identifies two reasons for the overstatement. First, the $10.5 billion figure reflects the maximum amount that could be obligated on the terminated contracts, not the amount that would actually have been obligated. Second, DHS can obtain many of the same goods and services through existing contracts, meaning the anticipated savings will be offset by new obligations.
Ninety-five percent of the reported potential avoidance stems from 30 terminated indefinite delivery/indefinite-quantity (IDIQ) contracts that support DHS information-technology requirements. Those IDIQs span a 10-year period of performance, from fiscal years 2025 through 2034. DHS had already obligated over $1.7 billion in fiscal year 2025 through existing government-wide contracts for the same requirements, so that amount will not be avoided. Future obligations against those government-wide contracts through fiscal year 2034 will further reduce any actual cost avoidance.
In March 2025, DHS required Deputy Secretary approval for all contract terminations and for any award of contracts worth $25 million or more; that requirement was rescinded in April 2026. The GAO analysis underscores that the department's reported savings are unlikely to materialize in full, given the reliance on alternative contracting mechanisms.
The findings suggest that DHS's cost-avoidance projections should be tempered by the reality of ongoing procurement needs and the availability of existing contracts to meet them.
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