$1 billion in VA contracts terminated following requests from DOGE, senior officials

WASHINGTON — The Department of Veterans Affairs terminated hundreds of vendor contracts valued at $1.1 billion in 2025 at the direction of the Department of Government Efficiency, the General Services Administration and VA senior advisers, according to a federal watchdog report.

The VA Office of Inspector General issued an audit on Tuesday showing that 435 contracts were terminated “for convenience.”

Termination for convenience is a legal mechanism that allows government agencies to reduce or discontinue projects no longer required or determined not to be in the government’s best interest, according to Price Reporter, which advises businesses on government contracts.

Between January and June 2025, the VA fielded multiple requests from the Trump administration to end certain contracts amid a reduction in spending ordered at most federal agencies, including the elimination of diversity, equity and inclusion programs, according to the VA OIG report.

Sen. Richard Blumenthal, D-Conn., who originally requested the audit, criticized the VA’s “top-down process led by DOGE, [VA Secretary] Doug Collins and political leaders” to identify and cancel the contracts.

Blumenthal is the top Democrat on the Senate Veterans’ Affairs Committee.

“OIG reports that only after contracts were marked for cancellation did VA leadership ask officials to justify their proposed cuts. In addition, questions about the cancellations’ impact on veterans were not asked until the contracts were identified for termination,” Blumenthal said Wednesday.

The report did not make any recommendations to the VA for improvements. It also did not point to or support concerns that specific veteran benefits or direct services permanently ended.

Quinn Slaven, the VA press secretary, said that the OIG report confirms that the VA successfully “terminated hundreds of wasteful and duplicative contracts, saving the department more than $1 billion.”

Slaven said that the VA undertook a methodical and careful review process prior to the cancellations, ensuring that there would be “no negative impact whatsoever” on VA care and benefits.

“Instead, the department is reinvesting these massive savings to make landmark improvements to VA care and benefits,” Slaven said.

On Feb. 11, 2025, VA Secretary Collins established a team to identify and implement cost-saving measures across the VA, including a review of all VA contracts based on recent presidential directives.

“In particular, the secretary directed the team to look for contracts that supported mentors, consultants, coaches and advisers; contracts for consulting or data research services that only delivered reports or advice; and contracts that would be deemed wasteful by an average person,” the report said.

Collins, along with other VA leaders, established procedures for reviewing contracts before terminating them, which reduced the risk of the agency ending critical services, the report concluded.

A VA senior adviser worked with the Office of Acquisition, Logistics, and Construction to establish criteria to review the lists of contracts prior to termination.

Most of the terminated contracts were for consulting services, which included administrative and program management as well as strategic communications, the report said.

The VA spends more money on buying goods and services than any other agency in the federal government except for the Department of Defense, the report said.

As part of the audit, the VA OIG reviewed 2,210 contract actions.

Investigators found that the cancellation request process often involved several individual actions within a single contract.

“The remaining actions were either reinstated or never terminated, indicating they were considered but ultimately retained,” the report said.

Some contractors received stop-work orders or termination notices but ultimately continued as vendors.

Contracting officials with the VA and Veterans Health Administration dedicated staff full time to track and monitor the contract lists and correspondence from multiple agencies, the report said.

“In some cases, VA officials were given two weeks to complete their review; in others, they were given only a few hours to review hundreds of contracts,” the report said.

Blumenthal criticized the process and timeline as “haphazard.”

“Due to the reckless cancellation process, VA subsequently reversed some contracts that were already canceled,” he said.

For example, the OIG found that contracting officers initially terminated an additional 100 contract actions but later reinstated them, Blumenthal said.

The VA’s acquisition budget covers medical equipment, pharmaceuticals, IT systems, construction services for hospitals and administrative supplies, among other items.

The initial list of professional services and consulting contracts reviewed for termination was created by VA officials, and did not use an artificial intelligence program by DOGE, a concern expressed by some lawmakers, according to the report

“Most of the contracts that were ultimately terminated were included in this list,” the report said.

VA contracting staff were required to explain why contracts were of value and critical to veterans and the VA mission.

Blumenthal and Sen. Angus King, I-Maine, had requested that the OIG examine the process for terminating contracts.

The senators expressed concern about the impact on local agencies and the veterans they served.

“The senators asked the OIG to review the cancellation of VA contracts that began after Jan. 20, 2025, to identify which contracts were canceled, reduced in scope, stopped, or allowed to expire as part of this cancellation effort,” the report said.

The report also cited key actions by the Trump administration in 2025 that affected VA contracting policies and practices.

On Jan. 20, 2025, Trump issued an executive order that directed the cancellation of diversity, equity and inclusion activities in the federal government.

The VA responded that it flagged several contracts for termination because they involved diversity, equity and inclusion-related trainings, materials and other consulting services.

On Feb. 26, 2025, another executive order from Trump directed agencies to terminate or change contracts “to reduce” federal spending and reallocate the dollars to advance administration policies.