The US government made a big change in its defence policy. Defence Secretary Pete Hegseth has stopped contracts worth $5.1 billion from the tech companies. Big companies like Accenture, Deloitte and Booz Allen Hamilton are doing work for the military. The Pentagon is the main office for the U.S. military. It said that they will do this work on their own, so they don’t require the help of these big companies. The main goal of this decision is to save money and use workers who are already employed by the government.
Pete Hegseth said, “These jobs are not very important, and their workers can do this on their own.”
Why Did the Pentagon Cancelled the Contract?
The Pentagon believed that it was spending too much money on foreign companies and called it a waste of money. These companies were helping with things like computer services, planning and giving advice. But Pete Hegseth believed that it was not needed anymore. He referred to it as “wasteful spending”. He said, “These jobs do not help with real missions. Pete Hegseth believed that they were spending money where they should not spend. He believed cancelling these contracts could save about $4 billion. This is a lot of money and could be used for other, more important things.
The Pentagon cancelled the contracts with these big companies, affecting many parts of the US military, like the Navy, Air Force, DARPA (a group that works on new science ideas), and the Defence Health Agency, which helps take care of soldiers’ health.
How the Companies Are Reacting
Big companies have faced a lot of problems due to this sudden decision. Accenture, Booz Allen Hamilton, and Deloitte are three of the largest companies that work with the government. These companies have not said anything yet about this cancelled deal. But the stock market had reacted quickly. When the news came out, Booz Allen’s stock dropped 2.4%, and Accenture’s stock went down 2%. This shows investors are worried about the company’s position and believe that they may lose money. Deloitte is a private company, so it doesn’t sell stock like others. But its market position is also a risk. Many people could lose their jobs and money due to this decision.
What Happens Next
Defence Secretary Pete Hegseth says that the military doesn’t need the help of foreign companies, as they are self-reliable. Their people will do the tasks that these big companies do. He also said the Pentagon will work with Elon Musk’s team. This group is called the Department of Government Efficiency. They will help the Pentagon make a plan to do tech work better and cheaper. For the next 30 days, this team will help the Pentagon figure out how to work on their own. It will teach government workers to do tasks on their own.
The government had also decided to spend less on cloud services. Cloud services refer to the services that store computer data on the Internet. Companies like Google, Amazon and Microsoft provided these services. Now the Pentagon is looking for the best prices and making better deals to save money. Some experts believe that this is a smart move to save money and make the government stronger. However, some worry that it will slow down the work, as foreign companies have special skills and tools, but if the military tries to do everything on their own, it will take some extra time.
Pete Hegseth still says the government needs to make this change; it’s very important for the government to be smarter and more careful with their money.
Conclusion
The Pentagon is stopping $5.1 billion in tech contracts. It says the work is not needed and will now be done by its workers. Big companies like Accenture and Booz Allen will lose these jobs. Elon Musk’s team will help make a new plan. The goal is to save money and make the military do more with its people.
