The Department of the Air Force (DAF) has cut $10.4 billion in costs after a Department of Government Efficiency (DOGE) “efficiency review” of over 500 contracts and 50 business systems, an Air Force spokesperson told MeriTalk.
The cost-cutting initiative – initially unveiled jointly by Defense Secretary Pete Hegseth and Air Force Secretary Troy Meink in a video posted to X – comes after a six-month collaboration between the Air Force and DOGE.
“With the modernization going on, which is the largest in the history of the Air Force, every last dollar is going to be necessary to bring that lethality and peace through strength,” Meink said, explaining that the cost reductions will support the service’s extensive modernization plans.
While a detailed breakdown of the savings was not provided, the Air Force said the cuts stemmed from descoping, reducing contract ceilings, and terminating or declining to exercise contract option periods.
One of the most significant cost-saving measures was the termination of the Department Air Force Strategic Transformation Support (DAFSTS) Contract, yielding approximately $4.8 billion in avoided costs.
The spokesperson said the work will now be handled in-house by DoD personnel.
The contract, structured as an Indefinite Delivery, Indefinite Quantity vehicle, provided a wide range of consulting and professional services across the Air Force, focusing on digital modernization, IT development, strategic planning, and enterprise transformation. While much of this funding had not yet been obligated, the Air Force has spent approximately $353 million on DAFSTS to date, including $12.17 million in fiscal year 2024.
In addition, DOGE cited $832 million in savings from canceling a Deloitte task order under the same contract, along with another $104 million from terminating other consultant agreements.
Additionally, the Air Force halted plans for a follow-up to the contract, known as DAFSTS II. Industry had been notified in May of the cancellation, following a final solicitation issued in October 2024 and a planned award date in June 2025. The solicitation was officially canceled on May 19, with DOGE estimating $3.75 billion in avoided spending as a result.
The Air Force spokesperson also pointed to IT contract savings, noting the department eliminated unused software licenses.
“In one example, we were paying for 16,000 licenses but only 300 licenses were being used. That’s a utilization rate of just 1.9 percent. We renegotiated the contract to match actual deployment needs,” the spokesperson said. “The result: $19.4 million in immediate savings plus long-term cost avoidance by rightsizing the license usage.”
The Air Force also canceled duplicative systems and services, including a $72 million data analytics contract and a $21 million immersive learning platform.