Homeland Security contractors watching the agency's DOGE-era contract terminations can stop assuming that money is gone for good: most of the $10.5 billion in "cost avoidance" DHS claimed from canceling contracts was never real savings to begin with, according to a Government Accountability Office report released September 3, 2026. GAO found the department is simply buying much of the same work through other contracts, which means the projected windfall will not fully materialize.
The review covers the eight-plus months from January 20 through September 30, 2025, when DHS fully or partially terminated 438 contracts for convenience, citing Executive Orders 14173 and 14222 as its authority. The relevant order, EO 14222, directed agency heads — in consultation with their DOGE teams — to review contracts and grants and terminate or modify those found reducible in order to cut or reallocate federal spending. DHS terminated hundreds of awards across nearly every major component during that window.
Those 438 contracts had $1,670,143,632 obligated on them at the time of termination. DHS has since net-deobligated just over $92 million of that — a fraction of the $10.5 billion figure the department touted publicly as potential savings.
GAO's report is significant not because it disputes that DHS terminated real contracts, but because it separates the act of termination from the financial claim built on top of it. The agency's methodology counted the full remaining ceiling value of long-term IT vehicles as avoided cost, even though GAO found it unclear how much of that ceiling DHS would ever have actually spent — and even though DHS's own termination notices said the underlying IT needs could be met through GSA and other government-wide offerings.
Why $10 Billion of the Savings Traces to 30 IT Contracts
GAO's analysis found that DHS's $10.5 billion estimate rests almost entirely on a narrow slice of the terminated contract portfolio. Nearly $10 billion of it — 95 percent — comes from just 30 terminated indefinite-delivery/indefinite-quantity contracts for information technology services and equipment, each carrying a 10-year performance period running from fiscal year 2025 through fiscal year 2034.
The problem, auditors said, is that the $10.5 billion figure reflects the maximum ceiling DHS could theoretically have obligated on those contracts over a decade, not what the department would actually have spent. "DHS publicly reported that its full or partial termination of contracts could allow the agency to potentially avoid $10.5 billion in costs. This potential cost avoidance, however, is based on the maximum amount that DHS could have obligated on these contracts," GAO wrote in the report's key takeaways. "It is unclear how much DHS would have actually obligated on these contracts if they had not been terminated, and thus, how much cost to the agency will actually be avoided."
DHS Already Spent $1.7 Billion Replacing the Canceled IT Work
GAO's second finding undercuts the savings claim even further: DHS still needed much of the IT capability the terminated IDIQs would have provided, so it went and bought it anyway, just through different vehicles. According to the department's Office of the Chief Procurement Officer, DHS obligated more than $1.7 billion in fiscal year 2025 alone through existing government-wide contracts, including General Services Administration offerings, to meet the same requirements the canceled IDIQs were covering.
"According to the Office of the Chief Procurement Officer, in fiscal year 2025, DHS obligated over $1.7 billion through existing government-wide contracts to meet these requirements," GAO wrote. "Thus, $1.7 billion of potential costs under these contracts were not avoided but incurred through other contracts." In plain terms, the money DHS advertised as saved was in large part redirected to a different set of vendors rather than kept off the books entirely.
GAO summarized the overall dynamic bluntly: the department is unlikely to realize most of its projected savings because it can obtain many of the same services through its remaining government-wide contracts.
Which DHS Components Terminated the Most Contracts
The 438 terminations were not spread evenly across the department. By number of contracts and obligated value, the breakdown was: Customs and Border Protection, 27 contracts worth $494.0 million; Immigration and Customs Enforcement, 25 contracts worth $242.8 million; FEMA, 139 contracts worth $208.0 million; the Office of the Chief Information Officer, 5 contracts worth $171.8 million; the Transportation Security Administration, 24 contracts worth $136.1 million; Science and Technology, 40 contracts worth $98.0 million; and the Cybersecurity and Infrastructure Security Agency, 22 contracts worth $75.7 million. All other components combined accounted for 156 contracts worth $243.7 million.
FEMA terminated by far the most individual contracts, while CBP's smaller number of terminations carried the largest total dollar value — a split that reflects the different scale and structure of contracts each component relies on. FEMA's high contract count but comparatively modest dollar total suggests many of its terminations hit smaller, shorter-term awards, while CBP and the Office of the CIO concentrated their cuts in fewer, larger-dollar vehicles. DHS did not submit formal agency comments disputing GAO's findings, offering only technical comments that GAO incorporated where appropriate, meaning the department has not publicly contested the substance of the report.
This report is the first in a planned GAO series examining DHS's response to the DOGE-era review directives. A companion report on terminated grants covering the same January-through-September 2025 window is still to come, alongside ongoing GAO work examining DHS workforce reductions from January through December 2025.
What It Means for Contractors
For companies that lost DHS work in 2025's termination wave, the report is double-edged. It confirms the terminations were real and widespread — 438 contracts across every major component — but it also shows DHS did not walk away from the underlying requirements it was buying. Where a canceled IDIQ covered ongoing IT services or equipment DHS still needs, the department has been re-procuring that capability through other government-wide vehicles, which means the actual competitive opportunity may resurface under a different contract number rather than disappearing.
The findings also put pressure on DHS's own reporting practices going forward. If Congress or oversight bodies press the department to reconcile publicly claimed cost avoidance against what it actually redirected to other contracts, DHS may need to produce a truer accounting of net savings rather than headline totals based on maximum contract ceilings. Contractors tracking follow-on IT recompetes, particularly anything tied to the 30 large IDIQs GAO identified, should watch for solicitations on GSA and other government-wide contracts as the likely landing spot for work that was formally terminated but not actually eliminated.
