Elon Musk reacts on the day of U.S. President Donald Trump’s speech to a joint session of Congress, in the House Chamber of the U.S. Capitol in Washington, D.C., U.S., March 4, 2025.
Evelyn Hockstein | Reuters
Elon Musk’s Department of Government Efficiency abandoned some of its plans to slash contract spending for veterans’ health care services this week after a revolt by front-line Veterans Health Administration employees who contended many of the cuts would imperil safety at the agency’s almost 1,400 hospitals and clinics.
What had been a list of 875 VA contracts scheduled for termination a little over a week ago has now become 585 canceled contracts, the VA said Monday. The about-face is a rare public retreat by the so-called efficiency operation known as DOGE, which has come under fire for moving to ax crucial government services and overstating the value of some of its savings to taxpayers.
In its announcement reducing the number of contracts to be canceled, the VA said that the terminations “will not negatively affect Veteran care, benefits or services” and that they “were identified through a deliberative, multi-level review.” The agency acknowledged that some of the canceled contracts had already been fully paid for.
The list of contracts still on the chopping block has not been made public, and the VA declined to provide it. But VA employees have identified 200 of the remaining scheduled cancellations to NBC News, and some of them appear to be central to patient safety, those employees say.
For example, the revised list of killed contracts includes those covering sterility certification for VA hospital pharmacy operations, facility air quality and safety testing to prevent transmission of infections, and sterile processing services to decontaminate equipment and medical instruments. Also on the list: contracts providing required certification and accreditation for stroke centers and follow-up care for cancer patients.
Another contract that remains scheduled for cancellation supports the National Center for PTSD, a VA entity that is the world’s leading research and educational center on post-traumatic stress disorder. Also terminated is a contract that would continue a long-established technology upgrade of the Veterans Health Administration’s electronic health records system.
The VA said it could not comment on the contracts unless NBC News identified them by contract name and contract number. NBC News declined to do so out of concern that it could reveal the identity of its sources.
The spokesman for DOGE did not respond to an email seeking comment.
On Wednesday, the VA announced that it was laying off 80,000 workers in an agencywide reorganization scheduled for August. The aim is to reduce its workforce to its 2019 level of 400,000, the memo to employees said. The agency dismissed 2,400 probationary employees in February.
Sen. Richard Blumenthal, D-Conn., the ranking member of the Veterans Affairs Committee, said he learned about the new contract cancellations from NBC News. He characterized them as a “reckless” move by Veterans Affairs Secretary Doug Collins.
“Make no mistake, cancelling these contracts will cause harm to veterans and VA care and benefits,” Blumenthal said in a statement. “And it is completely unacceptable there has been no transparency, accountability, or consultation surrounding these contracts. By intentionally concealing from Congress the full list of contracts cancelled, Collins makes clear his intentions to use these terminated services as numbers for his press release, with zero regard for veterans.”
‘Most stringent standards’
It has been a harrowing few weeks for VA employees charged with operating the nation’s largest health care system, according to five agency officials who spoke on the condition of anonymity because they are afraid of retaliation. In recent days, several VA employees have been suspended indefinitely after they were accused of sharing nonpublic information about the DOGE contract terminations, according to a VA official and a congressional staffer in touch with the employees.
The VA spokesman declined to comment on whether employees have been suspended.
The recent tumult inside the VA began roughly 10 days ago when employees received a list of 875 contracts DOGE apparently determined were wasteful. To the astonishment of some Veterans Health Administration employees, many of the contracts were crucial to the safe operation of VA facilities. Including them on the list suggested that DOGE had done little analysis of the contracts’ functions, four current employees told NBC News.
For example, one type of canceled contract on the initial list paid for the safety monitoring of hospital radiation equipment used for X-rays and MRIs and to treat and screen veterans for cancer.
The monitoring, required by the Nuclear Regulatory Commission, is conducted at least annually by experts known as medical physicists to ensure that the equipment is safe for patients and that it delivers the appropriate amounts of radiation. The machinery must also be checked to ensure employees using it are not exposed to dangerous radiation levels.
Hospitals are subject to regular audits and inspections and, if radiation equipment is found to be in violation, it must be rectified within a certain period. Without contractors available to resolve the problem quickly, the hospital departments using the equipment would have to shut down, the VA officials said. The hospitals would most likely have to close, as well, a VA official said, because “you cannot have a hospital that does not have a radiology department.”
Last week, after they received the list of 875 terminated contracts, employees in the nationwide Veterans Health Administration regional care systems, many of them veterans themselves, objected and argued for reinstatement of many of the contracts, the VA officials told NBC News. The Veterans Health Administration serves roughly 9 million enrolled veterans in its medical centers and outpatient clinics every year.
A sign marks the headquarters of the Department of Veterans Affairs in Washington, D.C., U.S., Feb. 20, 2025.R
Brian Snyder | Reuters
A VA official said that when he saw the initial list, he concluded: “They’re trying to push veterans into community care,” referring to services provided outside VA hospitals and clinics. “And to do that, they’re doing everything they can to make the VA mission fail.”
Amid the backlash last week, the VA paused its planned cuts. Then, on Monday, it announced the contract termination list had fallen by one-third, to 585 contracts. Medical physicists charged with monitoring facility radiation equipment were no longer on the canceled list.
Among the contracts still scheduled to be terminated at the VA is one covering the certification of areas and equipment in VA pharmacies used to combine multiple drugs, known as compounded medicines. Such certifications are at the heart of patient safety, because compounded medicines, which patients with cancer and other maladies use, must be made in special settings.
According to The Joint Commission, the country’s oldest and largest standards-setting and accrediting body in health care, certifying compounding areas ensures that pharmacies “meet the most stringent standards in safety and reliability.”
The terminated list also includes contracts for a practice crucial to preventing infection in hospitals: the sterilization of medical devices and instruments needed during surgery.
Other contracts set for termination handle air quality testing, the documents show. Certain states, such as California and Massachusetts, have standards for air quality that must be met in health care facilities to reduce the transmission of hospital infections. The Joint Commission has its own airflow standards, and to meet them, facility equipment must be tested to ensure high ventilation rates.
Although the revised list of contracts reinstated medical physicists, who are the radiology experts who monitor equipment for excessive or inappropriate levels of radiation, the documents reviewed by NBC News show the termination of multiple contracts for radiation safety officers, a similar role. Those contractors ensure that a facility’s radiation safety program complies with regulations.
As for the health records upgrade and the contracts for the National Center for PTSD, which provides information about the disorder for veterans and their families, as well as helps find providers, both appear to be viewed as “non-mission critical.”
