Making Sense of DOGE Contract Savings

The Department of Government Efficiency (DOGE) reports $55B in savings obtained during its federal agency reviews.

Recent contract cancellations have fostered an environment of concern and anxiety among many federal contractors. The DOGE’s criteria for cancellations also remains unclear. Many of the terminated contracts listed on the DOGE site are related to specific executive orders (i.e. DEIA), however, some terminated contracts appear outside the scope of the administration’s top priorities (i.e. IT-related). While savings can be realized through proposed efficiencies the savings calculations include multiple variables and is not for the faint of heart. It’s a “sticky widget” at best, requiring a thorough understanding of the Federal Acquisition Regulation (FAR) and Defense Contract Audit Agency (DCAA) methodologies.

A Deltek analysis of the contract cancelations on the DOGE website revealed multiple inconsistencies in reported savings and the department’s calculation methods were not provided. Among these, Deltek found:

1. Misunderstanding (or misapplication?) of Ceiling Values

DOGE appears to have based savings against the Base and All Options Values/Total Contract Value (TCV) field in the Federal Procurement Data System (FPDS). This methodology assumes the federal agencies planned to spend the entire amount of the total contract value. However, large Blanket Purchase Agreements (BPAs) and Indefinite Delivery Indefinite Quantity (IDIQ) contracts have assigned “ceiling values” that represent the maximum amount the government will spend during the contract lifecycle. This represents a spending limit not disbursed funds or the intended total of disbursed funds.

Many times, these ceiling values are front-loaded and reported at the time of award instead of in incremental amounts over the contract lifecycle. This helps prevent agencies from running out of spending power before the contract expires and having to go back and conduct a costly early recompete or justify adding additional funds. Again, this does not represent money spent or what the government was going to end up paying. It only represents the maximum spending capacity.

This scenario is like having a maximum spending limit on a credit card. If one has a credit card with a $25M limit, the holder can charge up to $25M. If the holder spends $5M on the card, $20M remains to be used. However, that does not mean the holder will charge the remaining amount. Therefore, there is not a $20M savings; it is only unused credit capacity. The same applies to BPAs and IDIQ contracts. The remaining unused ceiling represents unused capacity.

Furthermore, reporting methodologies in the FPDS on contract ceilings, listed as the Base and All Options Values/Total Contract Value, also varies among contracting offices. Some agencies report the ceilings individually on all contracts, even though it is a single shared ceiling among the contractors. This also causes confusion when calculating savings.

For example, Agency XYZ awards a BPA with a total ceiling value of $30M to be shared among three contractors. In FPDS, the individual BPAs each show a $30M Base and All Options Value. This could easily be interpreted as meaning the individual BPA holders each have a $30M contract making the total BPA value $90M. However, that is not the case. This does not mean that each contractor has a $30M BPA or even a $10M BPA each. The BPA ceiling value represents the total amount that could be spent, period. This could mean one contractor received $10M, another $15M and the third $5M, or even one contractor receiving the entire amount over time. The BPA only provides a “catalog” from these three vendors from which the agency can “order” over the contract lifecycle. Unless a minimum order is specified in the contract, the BPA holders are not guaranteed any amount.

2. Miscalculated Spending

The DOGE website also reflects “savings” from cancellation or changes to numerous federal contracts. These savings also appear to be calculated by the differences between the TCVs and Action Obligations. However, a closer look at a few of the contracts on the DOGE site reveals miscalculations in obligations/spending, and thus inaccuracies in the DOGE-reported savings.

For example, the DOGE lists a $34.5M savings for a contract with HHS, and the DOGE site reflects the entire value of the contract as a savings. However, a cursory look at the contract in FPDS shows the department reported more than $425K under the contract. Thus, the $34.5M in total savings is incorrect given the reported spending on FPDS.

Likewise, the DOGE lists a USPTO BPA for Organizational Assessment Consulting Services with a total savings of $25M, which again is also the TCV for the services. This insinuates obligations have not been made under the contract. Looking at FPDS, calculations of all obligation activity show the total spending to date as nearly $3M. Thus, the $25M figure does not equate to a savings. Furthermore, the remaining $22M also does represent an actual savings since it is only the remaining maximum amount that could be spent.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3. Potential Double Counting in Savings

The DOGE site often double counts a program’s ceiling value in the savings section, especially in programs with multiple awards as mentioned above. The DOGE lists the total contract value for the entire program separately under each individual contract within that program, leading to inflated savings figures.

For example, three contracts are listed under Treasury on the DOGE site for the department’s Treasury Scholars Program Services, each with a “savings” of $6.5M, for a total of $19.5M.

 

 

 

 

As previously explained, contracts reported on FPDS often list the program’s total value under each associated contract entry. However, those familiar with FPDS and multiple award programs such as BPAs understand that the total contract value is typically shared among all awarded contracts. There are instances where the reported TCVs in FPDS represent individual contract values, but in those cases, this is specified in the solicitation and resulting contract. Without copies of the contracts or solicitations for those reported on the DOGE site, verification is unavailable, and subsequently, the savings cannot be validated.

Back to the Treasury example, if the total ceiling value for the Treasury Scholars Program is $6.5M, then the $19.5M reflected on the DOGE site is triple counting the savings by listing $6.5M for each contract. As a side note, FPDS reports obligations under all three contracts at Treasury, furthering the fact that the listed savings on the DOGE site is inaccurate.

A similar case exists with an EPA BPA for DEIA Enterprise Services. The EPA awarded three BPAs with reported ceilings of $15M each with no reported obligations for any. Again, since the solicitation is not available to clarify the intended total value, it could be $45M as reported by DOGE ($15M for each BPA) or only $15M.

Finally, DOGE cancelled four BPA contracts for Program Analysis and Evaluation (PA&E) services at the Department of Homeland Security (DHS), Office of the Chief Financial Officer (OCFO). To date, there is no reported spending on these BPAs, which together hold a combined ceiling value of $30M. However, the DOGE site individually lists the TCV and Savings of $30M for each of the contracts, listing the TCV and Savings amounts four times. While this may be a factor of the technological limitations of pulling data from FPDS for the DOGE site, the multiple listing creates confusion if the viewer infers that the total value and savings is $30M for each BPA rendering a $120M savings.

4. Lag in Reported Termination vs. DOGE Listing

Near the top of the Savings webpage, the DOGE disclaimer states, “listed below are a subset of contract and lease cancellations; for the former, the contracts listed are those that have been posted publicly on www.fpds.gov. Note that the FPDS posting of the final termination notices can have up to a 1-month lag. These specific listed contracts account for approx. 20% of overall DOGE savings.”

Here, the DOGE acknowledges a gap between when terminated contracts appear on the DOGE site and when they appear on the FPDS site. This sequence has led to some contractors finding out the termination of a contract not only before it is listed on the FPDS site, but in some cases, learning of the termination on the DOGE site before even hearing from the respective Contracting Office.

For example, DOGE cancelled a BPA held by D&G Support Services with the Immigration and Customs Enforcement (ICE) agency’s Office of Diversity and Civil Rights (ODCR). The entire $8M ceiling value of the BPA is listed as savings, as there has not been any reported spending on the BPA to date. While the BPA cancellation is listed on the DOGE site, FPDS did not yet list the contract as cancelled at the time of publication.

5.  Questions About Implications to Future Acquisitions

DOGE cancelled a task order on the Desktop Support Services 2 (DSS 2.0) BPA contract for the Department of Homeland Security (DHS), Office of the Chief Information Officer (OCIO). The DOGE site lists a TCV of more than $4.4M for this BPA and Savings of $2.7M, which is based on a reported $1.7M in total spending to date reported in FPDS. The numbers fit, but there is more to the story.

While the task order on the BPA was cancelled, the existing overall BPA contract was not cancelled and but does have a September 2025 expiration date. Meanwhile, DHS had already released an RFI in mid-January in anticipation of soliciting a follow-on DSS 3.0 contract later this spring or summer.

Given the cancellation of the existing task order, it remains unclear whether a follow-on BPA competition will move forward and how. In a savings-minded environment, it is possible that a recompete could be delayed, rescoped, split up or completely cancelled, with any ongoing DSS-related work being shifted to other existing longer-term contracts versus spending the time and money on recompeting a new BPA. Deltek is watching for other examples of this type of activity as indicators of a possible trend. Time will tell. 

Looking Forward

The list of possibilities, questions and concerns around the savings reported for all federal agencies remains and will take time to clarify. Moreover, the DOGE is not providing much detail on the analysis done to assess the impact of terminations on agency missions. Just this week, President Trump issued a memo to agency heads on Radical Transparency About Wasteful Spending, directing all agencies to provide complete details about all terminated contracts, grants, discontinued funding or federal fund obligations “permitted by law and as the heads of agencies deem appropriate to promote the policies of the new Administration.”  However, those details may take some time to be fully vetted for legal release, while the list of savings is expected to continue growing.

Further, the longer-term impacts to ongoing agency planning, operations and acquisitions will take time to fully come into view, since at least some of these contract cancellations impact IT systems support and other sustained operational activities.

In the meantime, look to GovWin’s trusted experts for accurate information about federal contracts and follow the new administration activities through Deltek’s First 100 Days Resource Center.

The SLED and Canadian teams are providing updates and analysis on key Trump Administration actions impacting state and local and Canadian contractors. Learn more about their insights through the following links:

Impacts on the Canadian public sector

• Impact of Trump Administration 2.0 on Canada-U.S. Supply Chains

Impacts on the State and Local markets

• The Impact of Trump's 2025 Executive Actions on State, Local and Education (SLED) Government Funding
• Headwinds Facing the SLED Market in 2025
• What's in Store for SLED Government Contracting in 2025?