Navy Secretary axes contracts for fleet maintenance software, 'DEI,' climate in $300M purge

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Navy Secretary axes contracts for fleet maintenance software, ‘DEI,’ climate in $300M purge

John Phelan's memos come only a few weeks after Defense Secretary Pete Hegseth published a memo directing the termination of $5 billion worth of contracts.

By CARLEY WELCH
on April 25, 2025 at 3:15 PM


The Secretary of the Navy, the Hon. John C. Phelan, gives a speech over the pilot house 1MC to the crew of the world’s largest aircraft carrier, USS Gerald R. Ford (CVN 78), April 11, 2025. (U.S. Navy photo by Mass Communication Specialist 2nd Class Jacob Mattingly)

WASHINGTON — Secretary of the Department of the Navy John Phelan has released two memos cancelling a slew of grants and contracts aimed at what he called “eliminating wasteful spending” in the DoD, including those related to ship and aircraft maintenance software.

“I commend the DOGE [Department of Government Efficiency] team for finding these opportunities to help save the Navy and increase our readiness and war-fighting capability,” he said. Between the two memos the Pentagon will save almost $300 million, Phelan said in a video posted to X.

In the memo related to maintenance, Phelan directed the termination of all contracts under the DON’s Naval Maintenance, Repair and Overhaul (NMRO) logistics program. The NMRO program was established to help predict potential system failures on ships and aircraft using artificial intelligence, digital twins and other predictive analytics.

“The NMRO logistics program is critical software for the Navy. However, for 5 years systems integrators have over-engineered the software to the point where it is unusable. Upon the recommendation of Navy leadership, the current contracts under the NMRO program shall be terminated. This will allow the Program Office to apply the savings towards a new strategy to meet our needs,” Phelan wrote.

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