Deloitte has secured further work from the US Air Force, continuing a stream of substantial defence assignments more than a year after the Pentagon launched a drive to cut consulting contracts and bring more expertise in-house.
The latest contract modification does not show that the Pentagon has abandoned that policy. Viewed alongside other Deloitte awards since the policy was introduced, it instead points to a more selective approach: some consulting and professional-services work is being cancelled or targeted for insourcing, while other external expertise continues to attract substantial spending.
On 22 July, Deloitte Consulting LLP was awarded a $20.5 million firm-fixed-price modification to an existing Air Force technical-support contract, according to the Pentagon’s contract announcement.
The modification increased the cumulative face value of contract FA7014-24-F-0461 from $35.8 million to $56.4 million. Work is due to continue in Washington, DC, through September 2029, with just over $7 million in fiscal 2026 funding committed at the time of the modification.
Federal contracting data identify the underlying order as professional services and subject-matter-expert support for the Air Force’s Basing and Logistics Analytics Data Environment, or BLADE. The order was originally awarded in September 2024.
Because the July modification expands an order first awarded before the Pentagon’s consultant-reduction drive began, it is better understood as evidence that substantial external support arrangements have continued — and in this case expanded — under the new policy, rather than as a wholly new outsourcing decision.
On 10 April 2025, Defense Secretary Pete Hegseth ordered the immediate termination of several IT and consulting contracts.
One of them explicitly involved Deloitte: Hegseth described:
“a Defense Health Agency contract for consulting services from Accenture, Deloitte, Booz Allen, and other firms that can be performed by our civilian workforce.”
The Pentagon said the Defense Health Agency cuts covered $1.8 billion of consulting contracts awarded to various private-sector firms. It did not disclose how much of that amount related specifically to Deloitte.
The DHA contracts formed part of a broader package of terminations that Hegseth valued at $5.1 billion, with nearly $4 billion in estimated savings. The cuts also included an Air Force enterprise-cloud contract, Navy business-process consulting, DARPA IT help-desk services and another group of consulting contracts.
But Hegseth’s April 2025 memorandum went beyond cancelling individual contracts. He also ordered the Pentagon’s chief information officer to develop a plan to bring IT consulting and management services into the department’s civilian workforce.
Large Deloitte awards nevertheless continued during the period in which the new policy was being introduced. On 21 April 2025, 11 days after Hegseth’s memorandum, the Air Force announced two substantial awards to Deloitte entities. The announcement date alone does not establish when the underlying procurement decisions or approvals were made. At least one was already underway: the Air Force had published its notice of intent for the $82.5 million Deloitte & Touche award on 3 April, a week before Hegseth’s memorandum.
Deloitte Consulting received a $135.5 million firm-fixed-price contract for technical support services. The Air Force said the work included predictive analytics, consolidation of Air Force A4 IT systems, cybersecurity, improvements to logistics and security-forces data, base-defence systems and modernisation of A4 information technology using artificial intelligence. Two offers had been received.
Deloitte & Touche LLP was separately awarded an $82.5 million firm-fixed-price contract for financial improvement work, including audit-remediation enterprise IT and security-control services. That contract was awarded on a sole-source basis.
The awards show that the Pentagon’s move towards greater insourcing did not amount to an immediate or blanket withdrawal from external professional services. They also involved different types of work — ranging from technical and IT support to financial improvement and audit remediation — which may not all fall on the same side of the Pentagon’s emerging insourcing boundary.
The policy was expanded and given more detailed implementation rules the following month. In a 27 May 2025 memorandum, Hegseth said the department “must in-source more expertise” and imposed additional controls on external professional services.
For new IT consulting and management-services contracts covered by the policy, Pentagon components were required to demonstrate that the work could not be performed by existing Defense Department agencies or personnel, or obtained directly from a service provider rather than through a consultant or systems integrator.
They also had to provide a cost-benefit analysis, evidence that alternatives had been considered and justification for why the work could not be brought in-house before obtaining senior approval.
The memorandum also applied review requirements to a broader category of advisory and assistance services, including consulting, expert advice, studies, analyses and technical expertise. Pentagon components were instructed to prioritise existing internal capabilities before seeking such services externally.
By the end of May, Hegseth was publicly arguing that the Pentagon had become
“very much overreliant on management consultants and contractors.”
A Pentagon account published in June said the Air Force and the Department of Government Efficiency had conducted a line-by-line review of more than 50 contract vehicles in the service’s largest management-consulting programme.
According to Hegseth, that review produced $1 billion in savings on the existing programme and cancelled a planned $3.8 billion extension.
The Deloitte work nevertheless continued into 2026.
On 24 April this year, Deloitte & Touche LLP received an $82.1 million firm-fixed-price call order covering information technology, financial management, financial improvement and audit remediation.
The Air Force said the order would provide financial audit-remediation services through April 2029. Four offers were received, and $30.7 million in funding was committed when the order was awarded.
Three months later came the latest $20.5 million modification for Deloitte Consulting.
Taken together, the awards do not establish that the Pentagon has reversed or rolled back its consultant-reduction policy. The July modification relates to an order originally awarded in 2024, while the April 2026 Deloitte & Touche award concerns separate Air Force financial and audit-remediation services.
There is also no evidence in the records reviewed that the Defense Health Agency consulting work involving Deloitte that was targeted for termination in April 2025 has subsequently been restored.
Instead, the contracting history points to a more selective policy.
The Pentagon has cancelled billions of dollars of consulting and IT work, imposed additional approval requirements and told its components to make greater use of internal expertise. At the same time, it has continued to award Deloitte entities substantial contracts for services ranging from technical support and information technology to financial management and audit remediation.
The resulting question is therefore not whether the Pentagon has abandoned its consultant crackdown, but how it is deciding what should be brought in-house and what still warrants external support. Deloitte’s continuing Air Force work provides a case study of that boundary: some outside consulting has been deemed unnecessary or replaceable by government employees, while other technical and financial assignments continue to receive substantial funding.
What remains less visible from the public contracting record is how those criteria are being applied in individual cases — including why particular Deloitte assignments have continued or expanded while other consulting work has been judged suitable for insourcing.
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