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Pentagon Cancels $300 Million HR IT Project After Years of Delays

HR Tech

Business Honor
28 March, 2025

Pentagon halts $300 million HR IT project after 780% budget overrun and ten-year delay.

According to a report from The Register, the Pentagon has finally abandoned a project that promised to update its HR IT systems after eight years of delays and more than $300 million in spending. Launched in 2018, the refurbishment has a $36 million budget and was intended to be completed in a single year.

After nearly ten years of delays and a staggering 780% overspending, US Secretary of Defense Pete Hegseth has pledged to stop funding the transformation project going forward. The extent of the project's delays is revealed in a memo signed by Hegseth on March 20, 2025.

It stated that the software development program for the Defense Civilian Human Resources Management System (DCHRMS) is currently six years behind schedule and more than $280 million (780%) over budget. In order to "streamline a significant portion of the Department's legacy Human Resources (HR) information technology stack," the transformation program was approved in 2018.

The email said that more funding for the project would be "throwing better taxpayer money after bad." In a video announcing a broader $580 million crackdown on "wasteful" programs, contracts, and grants in the Department of Defense, Hegseth stated that they are no longer pursuing that course of action. His memo, however, stated that a new and enhanced HR management system was "an important thing we still need to achieve," even though the project was cancelled.

Hegseth has directed DoD officials to "develop a new plan within 60 days for achieving this mission" in collaboration with HR service providers. Hegseth also promised that the $30 million currently allocated to contracts with "external consulting firms for analysis products" would be withdrawn. The Register identified Gartner and McKinsey as the consultancies involved, though it noted that broader government reviews are underway for contracts with other firms like Accenture, Deloitte, and IBM.