Editor’s note: This story has been updated to reflect a change in position by Veterans Affairs leadership.
Veterans Affairs leaders this week touted $2 billion in savings for department efforts from canceled government contracts they insist were not providing real benefits to veterans, but critics are warning the efforts could seriously jeopardize some health and benefits services.
By Wednesday afternoon, however, VA leaders had paused those actions, saying they were going through the contracts “line-by-line” to ensure that veterans would not be harmed by the cost-cutting moves.
The confusion over department contracts began with a video message posted to social media Tuesday from VA Secretary Doug Collins, who said the contract cuts were just the first step in broader efficiency efforts at the department.
“These are things that we’re saving now that we can put back into health care, benefits, making sure that we’re doing what the VA is supposed to do,” Collins said.
He described the contracts as costing millions “to create things like PowerPoint slides and meeting minutes” as well as “coaching and training.”
VA officials declined a request to release the full list of contracts canceled, which Collins appeared to be holding in his video message. If accurate, the $2 billion in savings would represent about 0.5% of the entire VA budget for fiscal 2025.
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A VA spokesperson on Wednesday said that the contract review “will not be eliminating any benefits or services to veterans or VA beneficiaries, and there will be no negative impact to VA health care, benefits or beneficiaries.”
Capitol Hill staffers were told about 875 contracts were canceled, but only about 30 are listed on the Department of Government Oversight’s web page of wasteful and redundant government contracts.
They include a contract of about $123,000 for a telehealth outreach service to women veterans and about $45,000 for COVID-19 health care services. Washington Technology reported that at least 20 of those contracts were for veteran-owned businesses, several of which are run by service-disabled veterans.
Senate Veterans Affairs Committee ranking member Richard Blumenthal, D-Conn., said that his office has seen canceled contracts related to military records processing for VA disability claims, National Cemetery Administration outreach efforts, hospital recruiting of doctors and medical staff and inspections of medical equipment.
“To say abruptly cancelling these services won’t impact veterans’ care and benefits is another unrealistic promise from Collins,” Blumenthal said in a statement. “This is just another reckless cost-cutting decision that will harm veterans and taxpayers for years to come.”
Collins in his message dismissed criticism from lawmakers and the media over the cuts as off-base. But by Wednesday afternoon, internal emails to VA agency heads instructed them to “halt any contract terminations that are in progress” while leadership reconsidered the moves. However, the VA secretary’s social media message claiming $2 billion in savings was not retracted or rescinded.
The contract cuts came just one day after the latest round of VA staff dismissals, which now total close to 2,500 individuals since President Donald Trump took office. Collins said to expect more efficiency moves in coming weeks.
Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.
