Navy’s Phelan says DOGE’s cost cutting has saved $1B for service
“We’ve embraced the DOGE agency to come in basically to help us figure out processes and things that we’re doing that don’t make sense,” Navy Secretary John Phelan said.
US President-elect Donald Trump’s nominee for Secretary of the US Navy John Phelan listens during a Senate Armed Services confirmation hearing on Capitol Hill on February 27, 2025 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)
WASHINGTON — The Department of the Navy has saved an estimated $1 billion through various contract cancellations initiated by the Department of Government Efficiency, according to the service’s civilian leader.
Phelan said the $1 billion figure is a “gross” figure while the “net” savings would come closer to $500 million, while speaking at a Monday event hosted by the Special Competitive Studies Project.
“We’ve embraced the DOGE agency to come in basically to help us figure out processes and things that we’re doing that don’t make sense,” he said.
When asked to elaborate on the secretary’s claim, a Navy spokesperson provided Breaking Defense with four memos, all signed by Phelan, that direct a number of contract cancellations.
The most recent of the four documents is dated May 27 and states the Navy terminated a $15 million contract associated with conducting medical research on cats and dogs.
A second memo, dated April 29, states the service’s “MyNavyHR Transformation Initiative … no longer aligns with the Navy’s financial efficiency priorities.” That effort was intended to modernize the service’s human resource systems, and the contract’s termination “represents $300 million in total contract value,” according to the memo.
Another memo, dated April 24, directs the service to terminate an unspecified number of contracts associated with the Naval Maintenance, Repair and Overhaul logistics program. Phelan wrote that while the program, which helps predict system failures on ships and aircraft, is important, the current program office has allowed NMRO to be “overengineered” to the point of being “unusable.”
“Collectively, these contract terminations represent over $568 million in total contact value, which we estimate can allow the Navy to repurpose $200 million in taxpayer funds in a more effective manner,” according to the memo focused on NMRO.
The fourth document, also dated for April 24, terminates a number of smaller grants and contracts with various universities that Phelan characterized as “wasteful spending on climate change, DEI, social science, and other activities which are not aligned with DOD and DON priorities.” The memo states the terminations represent “$87 million in total award value, which we estimate can save up to $41 million in taxpayer funds the Navy can better apply to critical priorities.”
