Pentagon Weighs Axing $800 Million HR Software Projects, Opening Door to Palantir

The U.S. Navy and Air Force are preparing to terminate two nearly finished human-resources software programs that together have cost taxpayers more than $800 million over the past 12 years, according to internal memoranda and people familiar with the plans. The projects—one led by Accenture and Oracle for the Air Force and a separate Navy payroll system known as NP2 run by Nakupuna Companies—were intended to replace decades-old HR and payroll infrastructure across the services. Both initiatives had cleared key technical reviews and were nearing initial deployment this summer, but service leaders placed them on hold earlier this year. In May, then-acting Air Force acquisition chief Darlene Costello ordered a 90-day “strategic pause” while officials explored alternative solutions that would allow vendors such as Salesforce and Palantir to compete for fresh work. Space Force, which was slated to inherit the Air Force system, is meanwhile soliciting studies that could steer it toward a new Workday platform. At the Navy, senior personnel officials moved to cancel the NP2 project after the Department of Government Efficiency, a Trump-era watchdog aimed at cutting waste, scrapped a separate $171 million contract viewed as overlapping. Internal emails show retired Admiral Rick Cheeseman threatened to strip funding from NP2 unless the earlier deal was reinstated, prompting another review that has left the $425 million program in limbo. Federal procurement attorneys say the Pentagon can legally end the contracts “for convenience,” but would still be liable for wind-down expenses and any re-competition costs—potentially adding hundreds of millions of dollars to the tab. Critics warn that restarting the HR modernization effort with new vendors could duplicate work already completed and further delay overdue upgrades to personnel systems.