IT Consulting Contracts Evaluation Procedure Detailed in Department of Defense Memo
**Defense Department Strengthens Contract Oversight with New Memo**
The Defense Department (DoD) has issued a new memo that significantly changes the review process for certain unclassified contracts related to IT consulting, management services, and advisory and assistance services (A&AS). This move aims to enhance scrutiny of external spending and promote the use of in-house DoD capabilities.
The memo, issued in late June 2025, mandates pre-award approval from the Department of Government Efficiency (DOGE) for contracts or task orders over certain thresholds. These include IT consulting and management services (ITC&MS) contracts over $10 million and A&AS contracts over $1 million. The contracts typically fall under FAR-based packages funded by Budget Object Class Codes (BOCs) 23.3 (“Communications, Utilities, and Miscellaneous Charges”) or 25.1 (“Advisory and Assistance Services”), or have Product Service Codes (PSCs) beginning with “D” or “R.”
Agencies must submit a comprehensive package through the designated platform (go.mil/dogecontractreview), including details on deliverables, total contract ceiling value, estimated initial obligation, a detailed cost-benefit analysis, an alternatives review, a justification for insourcing, and evidence of evaluation of alternatives. DOGE is required to respond within 3 business days, after which approval can be presumed if no response is received, allowing the contract to proceed.
Several categories are excluded from this new review process, such as ITC&MS contracts with direct service providers, ITC&MS contracts that directly support defense weapon system programs or sustainment activities, and A&AS contracts for systems engineering and technical assistance in support of major defense acquisition programs.
John Tenaglia, the principal director for defense pricing, contracting, and acquisition policy, stated that the new memo allows military services and defense agencies to put reviews into practice. Michael Duffey, the Pentagon's acquisition chief, will monitor compliance with the new initiative. If DOGE does not respond within three business days, the procurement can proceed as normal, as opposed to two business days in the initial directive.
The updated memo is part of a series of directives aimed at reducing reliance on outside firms and increasing in-house capabilities. However, federal acquisition expert Stan Soloway expressed doubt that the initiative to increase insourcing and improve financial efficiency will have a meaningful positive impact.
[1] Defense Department Memo on Contract Reviews (2025) [2] Federal Acquisition Regulation (FAR) [3] Budget Object Class Codes (BOCs) and Product Service Codes (PSCs) [4] DoD Policy Directive on Warfighting Readiness and Defense Weapon Systems (2024)
- The Defense Department's acquisition policy, as outlined in the recent memo, includes a requirement for pre-award approval from the Department of Government Efficiency (DOGE) for certain unclassified contracts, particularly those in the federal workforce categories of IT consulting and management services (ITC&MS) over $10 million and advisory and assistance services (A&AS) over $1 million.
- The reimagined workforce initiative within the Defense Department, prompted by the latest memo, emphasizes finance and technology, aiming to promote the use of in-house DoD capabilities by mandating a comprehensive review process for certain contracts, which includes a cost-benefit analysis and alternatives review, to determine whether in-house capabilities can adequately fulfill contract requirements.
