Trump centralizes federal IT contracts to reduce waste

President Donald Trump has signed an executive order to centralize IT purchases for U.S. government agencies. The order aims to reduce waste and save taxpayer money. It requires federal agencies to conduct IT procurement through the General Services Administration (GSA). The executive order, signed on March 20, 2025, is titled “Eliminating Waste and Saving Taxpayer Dollars by Consolidating Procurement.” The White House stated that the federal government spends about $490 billion each year on contracts for common goods and services. This move is expected to streamline purchasing and improve efficiency. In the two months before the order's signing, the government canceled or reduced over 6,000 contracts. Many agencies have bought software like Microsoft 365 separately, causing price inconsistencies and challenges. By centralizing these purchases under the GSA, the administration hopes to save $100 million annually. The centralization will also help save another $150 million for the 2024 fiscal year, particularly in identity protection services aimed at preventing data breaches. The GSA has been involved in purchasing agreements with agencies such as NASA and the Army, highlighting the potential for further savings. Overall, the Department of Government Efficiency has identified potential savings exceeding $100 billion in various areas, including hardware and software procurement.