The numbers don't lie but sometimes they don't mean anything either. If the Secretary of Defense comes out and announces that they've cut $580,000,000 in contracts at the Pentagon and a DOGE guy comes out and baldly states that one of the weird things he's finding is that it is possible to terminate a $50,000,000 contract and nobody notices or even knows what it was for, there is truth but little validity to the statements. There are a few reasons for that.
1. The Government has one Contracting Officer Representative/contract. He is the only guy who really knows all the ins and outs of it although in some companies some contracts are both well known and understood and well published so that all members of the company may be able to latch onto the contract which is called a 'vehicle' by those in the know.
2. The contract vehicle I am most familiar with in DoD were all IDIQ contracts. Indefinite Duration/Indefinite Quantities and they are popular for a good reason....that's right, they are a 'vehicle' that the savvy know and understand that if you can get the Contracting Officer's Rep (COR) to sign off on your proposed Statement of Work you can charge almost anything to such a contract and stay within the legal limits. In my bit of DoD everybody really did pay a Hell of a lot more than lip service to the idea of contracts and value delivered. It is nothing like the idiocy you see everywhere else in government contracting shops where I'm pretty sure it is true that nobody knows because it was all corrupt and hidden away from the light of day. People went way out of their way to hide these things in locked filing cabinets in disused lavatories in the basements where someone had helpfully removed all the lights and the stairs and put a sign up saying, "beware of the leopard."
An IDIQ contract is frequently negotiated for the maximum value possible because they are dandy vehicles for getting work done. These contracts (any damned contract) take years to put together, bid, respond to, evaluate and sign. It is damned helpful to have a way of putting money on a contract instantly to accommodate pop-up work as soon as humanly possible. In other words, a SOW could be written at a government COR's desk, handed to him, signed off and be executed as soon as the contractor's contract officer signed off on it and those guys were available 24/7.
This IDIQ relationship translates into a contract vehicle having a, for instance, 270 million dollar ceiling and a 5 year period of performance. Both can be and are extended if both the government and the contractor agree, with the terms usually remaining the same and not subject to renegotiation. One simply extends the ceiling by X$ and the POP by another year or 5.
I had contract vehicles that had 250 million dollar ceilings and were good for 5 years and we were unable to get any work done on them because the government program office we dealt with hadn't received the necessary funds. In other words, the vehicle was there ready and waiting but there was no gas. Sucks but normal.
If some Agent of the Government decided to cancel that IDIQ contract they could, if they wanted to, claim that they saved us $250,000,000 but it wouldn't, strictly speaking, be true. There was no money on it to save or recoup.
See? More than you ever wanted to know from a layman's POV on IDIQ DOD contracts.
I'm taking news of some of these savings we keep hearing about with a certain number of very large grains of salt—roughly the size Utah.