Axed $170 million contract shows how DOGE-led cuts came over US Navy objections
Source: Business Insider
Jun 1, 2025, 4:49 AM ET
A US Navy contract to move sailors' server-stored records to a secure cloud system was recently torpedoed as part of DOGE-led cuts that show how top officials are under pressure to find large cost-savings even over the objections of their own organizations. An IT services provider named Pantheon received a $170 million contract last year to relocate the records threatened by flooding from a Tennessee data center to cloud storage.
But a top Navy official ordered it to be cut, at the suggestion of Department of Government Efficiency newcomers, over the strenuous warnings of their own personnel officials. An internal memo reviewed by BI highlighted that the system that DOGE recommended reverting to has been plagued by delays, a bloated budget, and little to show for it all. Continued "delays have resulted in the Navy having to expend even more resources on legacy systems that are past end of life and do not meet the needs of the Service," the memo said.
The Navy's Information Officer argued the contract was duplicative of legacy software, and justified the cancelation with the idea that government workers could do the same cloud migration contractors were then performing. But none of that is true, three sources familiar with the contract said, arguing this was hype from Navy leaders eager to offer up juicy cuts to DOGE officials to boost their own standing. The "decision, driven by demonstrably false and misleading claims, directly contradicts the Administration's goals of cutting waste, improving efficiency, and reforming failing IT programs," a second internal document says.
If the archaic data center in Tennessee floods, as Navy HR officials fear, the impact to personnel would be excruciating, sources said, hampering salary payments, recruiting efforts, and stalling promotions. Without such data on hand, it would be impossible to know who is eligible to promote and when, or even how to readily assign qualified troops during a war. The location maintains records for the over 330,000 sailors on active-duty.
Read more: https://www.businessinsider.com/us-navy-pantheon-it-contract-doge-cuts-2025-5