Touted as the controversial meme star shaking up the news, Doge saved the U.S. government an estimated $8 billion. This is coming by way of canceling hundreds of contracts, grants and leases that were started by prior administrations. The validity of these harmful claims is under serious scrutiny. Large gaps have appeared in the narrative regarding the so-called savings.
The organization points to a canceled immigration contract valued at $8 million as a prime example of its cost-cutting measures. Doge touts that canceling the project saved $8 billion. Most people believe that number to be blown out of proportion. Doge supports its assertions by providing a direct connection to USASpending.gov through its website. As for any ambitious announcement, critics are already questioning whether these claims add up.
Doge is moving quickly and penetratingly to cancel all existing contracts and grants. The cuts are primarily aimed at curbing fraud and cutting the federal workforce. They tout a record $2.9 billion in cuts. This figure comes from a calculated potential contract value with the IT services company A1FEDIMPACT. It remains adamantly happy that its total saving comes to $1.75 billion. This sum is achieved by canceling a USAID contribution to Gavi, an international health organization.
A deep dive into the allegations published on Doge’s website finds their implied savings of $160 billion as of April 20, at best, overblown. Of that, less than 40% is spelled out in specific savings. Additionally, less than half of these listed savings have cited documentation or third party verification provided.
Doge’s calculation methodology — which has raised eyebrows — was pretty simple. The organization has estimated the “total contract value” through 2028, which is when the contract would expire. They then deducted the amount already spent to date, leaving an inflated figure of $2.9 billion. Sources familiar with the HSR contract shared something hugely significant. They claim that net savings from the early termination are closer to $153 million.
When asked if the USAID grant had been received, a spokesperson for Gavi confirmed receipt of the $880 million from the grant. They said that so far they’ve received no termination notice about this grant.
“Gavi has not received a termination notice related to this grant,” – Gavi spokesperson
David Drabkin, a federal contracting expert, illustrated even greater inconsistencies in how contracts are reported. He noted in the hearing that the Federal Procurement Data System (FPDS) does not adequately reflect real costs upfront. Instead, it merely mirrors them months after a contract has been completed and filed.
“FPDS does not reflect the actual paid price until some period of time after the contract has been completed and the contract actions have been recorded,” – David Drabkin
Here, Drabkin further explained why contract costs are generally established as ceilings instead of concrete cost figures. This results in exaggerated savings numbers being claimed when contracts are terminated.
“For example, when buying research and development into a vaccine no one really knows how much that’s going to cost – so when a price is set, it’s not a definite price but rather an upper limit,” – David Drabkin
He explained that the government frequently only pays a fraction of the anticipated costs when contracts are ended prematurely. Unfortunately, this is the case in most instances.
“In truth, the government never incurred those costs and could never reach that ceiling amount. The real, documentable savings from early termination were approximately $153 million,” – Source familiar with the contract
Despite these inconsistencies, Donald Trump has publicly supported Doge’s initiatives, calling attention to what he perceives as significant financial waste.
“We’re talking about almost $200bn and rising fast,” – Donald Trump
Moreover, Doge continues to post its promised total savings on its website. At the same time, the pressure continues to build on them to substantiate those claims with unambiguous, transparent documentation. Currently, Doge claims to have receipts for about 30 percent of all total savings shared on the web.