- The Department of Government Efficiency might be killing contracts, but that doesn’t mean it’s producing savings for each one—because the money could have already been spent.
The Department of Government Efficiency, the non-cabinet body that may or may not be run by Elon Musk, has been tasked by the president to dramatically cut government spending. But an initial list of 1,125 federal government contracts that the cost-cutting body says it recently terminated includes more than a third, or a total of 417, that will result in zero savings, the Associated Press reported.
The money has already been spent in most cases, and it’s too late for the government to change its mind.
“It’s like confiscating used ammunition after it’s been shot when there’s nothing left in it. It doesn’t accomplish any policy objective,” Charles Tiefer, a retired University of Baltimore law professor who has an expertise in government contracting, told the AP. “Their terminating so many contracts pointlessly obviously doesn’t accomplish anything for saving money.”
An official in the Trump administration told the AP it made sense to cancel contracts that are no longer of value even if it won’t result in any savings. Those 417 contracts had a total value of $478 million, according to the AP, which reviewed the so-called “wall of receipts.”
Some of the contacts were for media subscriptions, research studies, trainings, and software. One was between the Department of Housing and Urban Development and a furniture company to purchase and install office furniture at multiple branches. That contract expires later this year, but the maximum $567,809 was already paid, per the AP. Another fulfilled contract worth $249,600 was paid to a firm hired to prepare the Department of Transportation for the transition from the Biden to Trump administration, the outlet reported.
One of the largest contracts was with Deloitte. It was to conduct a reorganization at the Centers for Disease Control, and the maximum $13.6 million had already been paid out, according to the AP.
The department that became DOGE once President Donald Trump took office did not immediately respond to Fortune’s request for comment.
Currently, DOGE’s online tracker reads: “DOGE’s total estimated savings are $65 billion, which is a combination of fraud detection/deletion, contract/lease cancellations, contract/lease renegotiations, asset sales, grant cancellations, workforce reductions, programmatic changes, and regulatory savings.”
But even when it comes to cuts that are saving money, some have questioned if they’re truly adding up. The New York Times previously reported the online tracker’s math doesn’t make sense, claiming the ledger was marred with mistakes, from accounting errors to outdated data. One $8 million contract was entered as $8 billion.
Nobel laureate Paul Krugman, a day ago, claimed “DOGE is the Theranos of Cost-Cutting,” a reference to the blood-testing startup that sold itself as revolutionary when in fact it never had a working technology.
Musk has previously vowed to find savings of $2 trillion in the federal government, although he has since walked back the figure. Regardless, governance professionals say federal headcount is not where the savings are: The more than 200 million civilian federal employees account for just 4% to 5% of the budget, Fortune previously reported. The bulk of the government’s $6.75 trillion in spending this year is for Social Security, Medicare, or the defense budget—all programs that are widely popular and difficult to cut.
“People do want more accountability in government operations,” said Danielle Brian, executive director of the watchdog Project On Government Oversight. “It’s just that DOGE is not looking in the right places.”
Brian pointed to examples of the Trump administration eliminating offices that brought in revenue for the government and identified waste—including firing independent inspectors general and staff cuts at the Consumer Financial Protection Bureau and the Internal Revenue Service, both of which brought in more money than they cost to run.
“That was a catastrophic mistake if the goal is to find ways of saving money,” she said. “Had DOGE’s purported mission been sincere, they would have been harnessing the strength of those offices.”
