The Department of Homeland Security terminated 438 contracts between January 20 and September 30, 2025, and deobligated a net total of more than $92 million on them, according to a Government Accountability Office analysis of federal procurement data released September 3, 2026.
DHS publicly reported on its website that those terminations could allow it to avoid more than $10.5 billion in costs. GAO said that figure overstates what will actually be avoided.
Where the $10.5 billion comes from
GAO found that 95 percent of the reported potential cost avoidance was attributable to 30 terminated indefinite delivery/indefinite-quantity contracts that DHS had in place to meet information technology requirements. Those contracts carried a 10-year period of performance, covering fiscal years 2025 through 2034.
Indefinite delivery/indefinite-quantity contracts set a ceiling on what an agency may order rather than a fixed amount it will spend. GAO said the $10.5 billion figure “represents the maximum that could be obligated on these contracts, not how much would have actually been obligated.”
According to DHS, the agency obligated more than $1.7 billion in fiscal year 2025 through existing government-wide contracts to meet the same requirements. “Thus, $1.7 billion in costs were not avoided but were incurred through other contracts,” GAO wrote. Any further obligations against those government-wide contracts through fiscal year 2034 would reduce actual cost avoidance further, the report said.
The terminations
DHS had obligated more than $1.6 billion on the 438 contracts before they were terminated. All were terminated for convenience, meaning ending the work was determined to be in the federal government’s interest. Some were terminated completely and some partially.
Deobligation reverses a prior commitment of funds. GAO said the $92 million represents cost savings “in that they reduce federal obligations and may be available for other purposes,” but added that savings would be diminished if DHS later obligates additional funds for similar work.
How the review was ordered
GAO said that in the first half of 2025 the President issued a series of executive orders directing agency heads — in consultation with the United States DOGE Service, also known as the Department of Government Efficiency — to review and terminate contracts to reduce federal spending, among other things.
In response, DHS reviewed more than 17,000 contracts to assess their importance to the agency’s mission, GAO said. That assessment led components to terminate contracts completely or partially.
In March 2025, DHS began requiring the Deputy Secretary to approve all contract terminations regardless of value, and to approve awards of any contract worth $25 million or more. The termination-approval requirement was rescinded in April 2026, according to the report.
Scope
GAO said it was asked to review DHS and DOGE efforts to terminate contracts and grant awards and to reduce the department’s workforce in 2025. This report is the first in a series and covers contract actions from January through September 2025. GAO reviewed executive orders and agency guidance, analyzed federal procurement data, and interviewed officials from DHS’s Offices of the Chief Procurement Officer and Chief Financial Officer.
Source: U.S. Government Accountability Office, “DHS Contracts: Reported Potential Cost Avoidance from Terminations Will Not Fully Materialize” (GAO-26-109096), released September 3, 2026. The report is the first in a series and covers only DHS contract review and termination actions from January through September 2025; contract counts and dollar amounts are based on GAO’s analysis of federal procurement data.