Pentagon cancels Accenture, Oracle HR software after $800m spend

The Pentagon has cancelled two major human resources software projects for the U.S. Navy and Air Force—developed by Accenture and Oracle—despite more than $800 million and 12 years of investment.

According to the Reuters, the systems were only months away from launch when senior defence officials ordered a halt. The move has drawn criticism from internal stakeholders and external observers, who warn that the decision risks duplicating costs and wasting taxpayer money.

The scrapped programmes were intended to replace ageing personnel systems across the military, handling functions such as payroll, benefits, and leave management. Both the Air Force and Navy projects had cleared multiple independent technical reviews and were deemed ready for deployment in 2025.

Air Force project paused

One of the systems was designed for the U.S. Air Force, led by contractors Accenture and Oracle. Reuters reported that the project was on track for an initial rollout in June 2025 and projected to save $39 million annually once operational. By April, a status update confirmed it was “on track” and nearly complete, after $368 million in expenditure.

However, on 30 May a memo from the Acting Assistant Secretary of the Air Force called for a “strategic pause” and directed officials to explore alternative options. Three people familiar with the decision told Reuters that some Air Force leaders were lobbying to redirect future efforts toward platforms run by Salesforce and Palantir.

In a statement to Reuters, the Air Force said it was “committed to reforming acquisition practices, assessing the acquisition workforce, and identifying opportunities to improve major defence acquisition programmes.”

Oracle, in response, said it was “working closely with DOGE [the Department of Government Efficiency] to accelerate the government’s transformation to modern technology at the best price for the taxpayer.”

Navy’s NP2 programme grounded

The Navy’s effort, known as NP2, faced a similar fate. The project, taken over by Nakupuna Companies in 2022 and based on Oracle technology, has cost more than $425 million since 2023 alone. Independent reviews earlier this year validated NP2 as technically sound and on schedule for late-2025 deployment.

Nonetheless, in June the Navy’s head of human resources issued a memo ordering “appropriate contractual actions” to cancel the programme. Internal emails cited by Reuters reveal frustration within the service, after DOGE sought to terminate a separate $171 million contract with Pantheon Data, which Navy officials insisted did not overlap with NP2.

“I am beyond exasperated with how this happened,” one senior official wrote in May, according to correspondence reviewed by Reuters.

Nakupuna called the decision “unexpected, especially given that multiple comprehensive reviews validated the technical solution as the fastest and most affordable approach.”

The Navy told that it “continues to prioritise essential personnel resources in support of efforts to strengthen military readiness through fiscal responsibility and departmental efficiency.”

Broader reform push

The cancellations come under the Department of Government Efficiency (DOGE), an initiative introduced by President Donald Trump to curb defence-sector inefficiencies. Pentagon officials argue that starting afresh with new bidders will ensure taxpayer money is “spent wisely.”

Kingsley Wilson, Pentagon Press Secretary, told Reuters: “This is how we will rebuild the military with necessary speed while ensuring taxpayer dollars are spent wisely in the process.”

For now, Accenture, Oracle, Nakupuna, and other contractors await clarity on whether the Pentagon will re-tender the cancelled projects, potentially opening the door for competitors such as Salesforce, Palantir, and Workday to step in.