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The Trump administration is set to scrap two soon-to-be-completed projects that would have modernized outdated Navy and Air Force HR software, after 12 years and a staggering spend of over $800 million.
According to a report from Reuters citing sources familiar with the matter, Pentagon officials have put the projects on hold, with the hope of giving other defense contractors – including Salesforce and Palantir – the chance to bid on similar projects.
While the Pentagon insists the move is vital for ensuring taxpayer dollars are “spent wisely,” sources warned Reuters the “costly do-over” could lead to duplicate costs and wasted spending.
12 years and $800m later... why is the Pentagon axing HR projects?
Trump’s Department of Government Efficiency has been busy in the first seven months of his presidency, claiming to have cancelled over $14billion in Defense Department contracts (among other projects) in a bid to reduce wasted spending and tackle federal inefficiencies.
Kingsley Wilson, Press Secretary for the Pentagon, told Reuters that the agency is taking “swift action” to address “antiquated” defense contracting processes on the orders of President Trump. “This is how we will rebuild the military with necessary speed while ensuring taxpayer dollars are spent wisely in the process,” she said.
That “swift action” made in line with an executive order to prioritize speed and risk-taking in defense acquisitions came alongside personnel changes in the higher echelons of the Pentagon, leaving many software projects in the lurch.
Among them are two costly HR software overhauls in the Navy and Air Force that promised to modernize personnel processes from payroll to absence management, despite those projects nearing completion.
A “status update” in April said a project won by Accenture and Oracle to overhaul the Air Force’s HR platform and save $39million a year was reportedly “on track” for an initial deployment in June, Reuters reported.
But on May 30, after $368 million spent, a memo issued by the then-Acting Assistant Secretary of the Air Force ordered a “strategic pause” on the project and called for other solutions to be considered.
Reuters said it heard from three sources who said the decision came as other Air Force officials pushed to steer a new HR project toward Salesforce and Palantir; while another HR platform project is also being scrapped in the Space Force, with a view to setting up another project led by Workday.
A statement from the Air Force said it is “committed to reforming acquisition practices, assessing the acquisition workforce, and identifying opportunities to improve major defense acquisition programs.”
Oracle said it was “working closely with DOGE to accelerate the government's transformation to modern technology at the best price for the taxpayer.”
‘Beyond exasperated’
John Weiler, Director of the Information Technology Acquisition Advisory Council, a government-chartered nonprofit group that advises federal departments on IT contracting, warned the moves could prove costly.
“The Air Force and Space Force "want to start over with vendors that do not meet their requirements, leading to significant duplication and massive costs," Weiler said.
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The Navy, meanwhile, has been working on an overhaul of its payroll and personnel systems since 2019, costing over $425million since 2023 alone, through a project known as ‘NP2.’
Nakupuna Companies took over the project in 2022, which uses Oracle software.
NP2 was due to be rolled out later in 2025, after receiving positive independent reviews in January. However, in June, the Navy’s then-Head of Human Resources sent a memo ordering another official to “take appropriate contractual actions” to cancel the project.
The HR leader was reportedly frustrated that DOGE had tried to cancel a $171million contract with Pantheon Data, arguing it duplicated aspects of the HR project.
“I am beyond exasperated with how this happened,” he wrote in an email in May, claiming the Pantheon contract wasn’t “duplicative of any effort.”
Navy leaders did not cancel the project, but instead ordered another assessment to be completed, grounding the roll-out to a halt.
A statement from Nakupuna said the pausing of NP2 was “unexpected, especially given that multiple comprehensive reviews validated the technical solution as the fastest and most affordable approach.”
The company said the new platform was ready to deploy.
The Navy told Reuters it “continues to prioritize essential personnel resources in support of efforts to strengthen military readiness through fiscal responsibility and departmental efficiency.”
