The Department of Veterans Affairs terminated 435 vendor contracts valued at $1.1 billion in 2025 following requests from the Department of Government Efficiency, the General Services Administration and senior VA advisers, according to a federal watchdog report.

The VA Office of Inspector General released an audit Tuesday examining the contract cancellation effort.

The contracts were terminated “for convenience,” a legal mechanism allowing agencies to reduce or discontinue projects that are no longer required or considered in the government’s best interest.

Between January and June 2025, the VA received multiple requests from the Trump administration to end certain contracts as part of a broader federal spending reduction. The effort included eliminating diversity, equity and inclusion programs across the federal government.

Sen. Richard Blumenthal, D-Conn., requested the audit and criticized what he described as a “top-down process led by DOGE, [VA Secretary] Doug Collins and political leaders” for identifying and canceling contracts. Blumenthal is the top Democrat on the Senate Veterans’ Affairs Committee.

Blumenthal said VA leadership asked officials to justify proposed cuts only after contracts had been marked for cancellation. He also said questions about the possible effects on veterans were not raised until contracts had already been identified for termination.

The inspector general’s report did not recommend improvements for the VA. It also did not identify or support concerns that particular veterans benefits or direct services had permanently ended because of the cancellations.

VA press secretary Quinn Slaven said the report confirmed that the department successfully “terminated hundreds of wasteful and duplicative contracts, saving the department more than $1 billion.” Slaven said the VA conducted a methodical and careful review before canceling contracts.

According to Slaven, that review ensured there would be “no negative impact whatsoever” on VA care and benefits. “Instead, the department is reinvesting these massive savings to make landmark improvements to VA care and benefits,” Slaven said.

Collins established a team on Feb. 11, 2025, to identify and implement cost saving measures throughout the VA. The effort included reviewing all VA contracts in light of recent presidential directives.

The secretary instructed the team to examine contracts supporting mentors, consultants, coaches and advisers. The team also reviewed consulting or data research contracts that produced only reports or advice, along with contracts that an average person might consider wasteful.

Collins and other VA leaders created contract review procedures before moving forward with terminations. The inspector general concluded that those procedures reduced the risk that the agency would end critical services.

A VA senior adviser also worked with the Office of Acquisition, Logistics, and Construction to develop criteria for reviewing contract lists. Most of the terminated agreements involved consulting services, including administrative work, program management and strategic communications.

The VA buys more goods and services than any other federal agency except the Department of War, according to the report. Its acquisition budget covers medical equipment, pharmaceuticals, information technology systems, hospital construction services and administrative supplies.

Investigators examined 2,210 contract actions during the audit. The report noted that cancellation requests frequently involved several separate actions connected to a single contract, while other actions were reinstated or never terminated after review.

Some contractors received stop work orders or termination notices but ultimately continued working as vendors. VA and Veterans Health Administration contracting officials assigned staff to track contract lists and correspondence from several federal agencies.

The time provided for those reviews varied sharply. “In some cases, VA officials were given two weeks to complete their review; in others, they were given only a few hours to review hundreds of contracts,” the report said.

Blumenthal called the process and timeline “haphazard” and said some contracts were reversed after cancellation. He said the inspector general found that contracting officers initially terminated another 100 contract actions before later reinstating them.

The original list of professional services and consulting contracts considered for termination was created by VA officials. According to the report, DOGE did not use an artificial intelligence program to produce that list, despite concerns raised by some lawmakers.

VA contracting personnel had to explain why individual contracts were valuable and critical to veterans and the department’s mission. Most contracts ultimately terminated had appeared on the original list, the report said.

Blumenthal and Sen. Angus King, I-Maine, asked the inspector general to examine contract cancellations that began after Jan. 20, 2025. They wanted the review to identify contracts that were canceled, reduced, stopped or allowed to expire during the effort.

President Donald Trump issued an executive order on Jan. 20, 2025, directing the cancellation of federal diversity, equity and inclusion activities. The VA subsequently flagged contracts involving related training, materials and consulting services.

Trump issued another executive order on Feb. 26, 2025, directing agencies to terminate or modify contracts “to reduce” federal spending and redirect those dollars toward administration policies.

The VA’s resulting review produced more than $1 billion in reported savings without evidence in the audit that specific direct services or veterans benefits permanently ended.