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After eight years of delays and over $300million of spending, the Pentagon has finally killed a project that promised to revamp its HR IT systems, according to a report from The Register.
The overhaul, launched in 2018, was meant to take just one year and had a budget of $36million.
Nearly decade of delays later, and with a whopping 780% overspend, US Secretary of Defense Pete Hegseth has promised to end any further investment in the transformation project.
$300m down the drain – HR tech headaches plague the Pentagon
A memo dated March 20, 2025, signed by Hegseth, reveals the scale of the delays involved in the project.
“The Defense Civilian Human Resources Management System (DCHRMS) software development program… is currently 6 years behind schedule and more than $280 million (780%) over budget,” it said.
The notice forecasted that at least two further years of development and testing would be required before the new HR software would be capable of operating.
In 2018, the transformation program was signed off to “streamline a significant portion of the Department's legacy Human Resources (HR) information technology stack.”
Further investment in the project would be “throwing more good taxpayer money after bad,” the memo stated.
“We’re not doing that anymore,” Hegseth said in a video announcing a broader $580million crackdown on “wasteful” programs, contracts, and grants in the Department of Defense.
DoD pushed to establish a new plan for ‘important’ HR software revamp
However, despite axing the project, his memo described a new-and-improved HR management system as “an important we still need to achieve.”
Hegseth has instructed DoD officials to work with HR service providers to “develop a new plan within 60 days for achieving this mission.”
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The numbers behind the DoD’s failed attempts to modernise its legacy HR system are staggering, but the department is far from the first institution to battle significant delays and major budget overspends.
Boston Consulting Group research has estimated that 80% of digital transformation projects fail to deliver on promises, while a Josh Bersin study found that 42% of organizations describe a new HR system implementation as either failed or only partially successful.
According to 2024 Gartner, 83% of HR tech buyers have experienced some type of regret after a purchase.
Wider spending cuts target DEI & external consultancies
Elsewhere in the memo, Hegseth confirmed that over $360million in funding for grant programs would also be cut, “in areas of Diversity, Equity, and Inclusion and related social programs, climate change, social science, COVID-19 pandemic response.”
Such programs are “not aligned with the DoD's current priorities,” as part of a wider crackdown on DEI measures in federal agencies ordered by President Trump in early 2025.
A $5.2million grant to diversify the Navy, a $6million grant to decarbonize emissions on Navy ships, and a $9million grant for developing “equitable AI and machine learning models” are among those to be axed, Hegseth confirmed in the video.
The Secretary of Defense said he needed “lethal” not “equitable” machine learning models.
$30million currently being spent on contracts with “external consulting firms for analysis products” will also be withdrawn, Hegseth promised.
The Register named Gartner and McKinsey as the consultancies in question, but caveated that there are wider government reviews of contracts with the likes of Accenture, Deloitte, and IBM.
Further cuts look likely, though it is not clear what areas of spending they will target. "Stay tuned," Hegseth said. "We have a lot more coming."
Kevin Epley