Navy axes MyNavyHR contract, slashes other IT efforts
Navy Secretary John Phelan said the contract represents $300 million in total contract value, which he estimates will save the Navy $260 million.
Navy Secretary John Phelan has terminated a human resources modernization contract tied to the MyNavyHR Transformation Initiative as it “no longer aligns with the service’s financial efficiency priorities.”
“Today I am signing an order canceling an implementation of an obsolete and redundant online portal the Navy no longer needs,” Phelan said on social media platform X.
A memo signed on April 29 does not identify the contract slated for termination, but Phelan said the contract cancelation represents $300 million in total contract value, which he estimates will save the Navy $260 million over the remaining 4.5 years.
“These funds can be repurposed to address critical Navy priorities, enhancing our operational readiness,” Phelan said in the memo obtained by Federal News Network. “I commend the Navy leaders who identified this opportunity to eliminate inefficient spending. I encourage leaders across the DON to continue identifying similar opportunities to optimize resources and reinvest in mission-critical needs.”
Phelan also directed Navy Chief Information Officer Jane Rathbun to develop a new acquisition strategy by July 31, along with a management review of the Navy’s HR systems requirements to “ensure operational efficiency and fiscal responsibility.”
The MyNavyHR Transformation Initiative is the Navy’s ambitious effort to modernize its human resources IT systems and processes — its primary goal is to improve HR experience for sailors by consolidating 55 disparate, antiquated systems into a streamlined, integrated digital infrastructure. Key components of the initiative include MyNavy Portal, Navy Personnel and Pay, Learning Stack, Enterprise Customer Relationship Management, HR Hub and Legacy System Evolution.
The effort, which aims to transform how the Navy manages sailors’ pay, entitlements and retirements, has faced a number of challenges in recent years, including pay and benefits disruptions, technical issues, and bureaucratic hurdles.
Ongoing cuts to contracts
The move to cancel a MyNavyHR contract is part of a broader push to slash initiatives the Defense Department and the Trump administration consider wasteful. Earlier this month, Defense Secretary Pete Hegseth ordered the termination of several IT services contracts that, he argued, can be handled by the department’s civilian workforce or fulfilled directly with existing procurement resources.
The memo also comes after Phelan ordered the termination of the service’s Naval Maintenance, Repair and Overhaul logistics program in a separate memo. The program was the service’s ambitious effort to transform how the Navy managed the maintenance of its ships, aircraft, and other platforms.
“The NMRO logistics program is critical software for the Navy. However, for five 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 said in the memo.
Together, the canceled IT contracts represent more than $568 million in total value, according to Phelan. Their termination is expected to allow the Navy to repurpose up to $200 million.”
In addition, Phelan ordered the termination of a set 45 grants and contracts related to climate change, diversity, equity and inclusion, social science and “other activities which are not aligned with DoD and DoN priorities,” a separate memo from April 24 states.
Phelan said “examples” of the cancelled research and activities include:
- 2.7 million grant to the University of South Carolina to study development, assessment and simulation of enabling field for naval de-carbonization;
- $3 million grant to Carnegie Mellon University to study persuasion, identity and morality in social-cyber environments;
- $1.1 million contract for gender advisor services at NAVSUP FLC Pearl Harbor
- $409,637 grant to Arizona State University to study “engendering and leveraging trust in longitudinal human-AI interactions;
- $146,293 grant to University of Hawaii to study population consequences of disturbance of humpback whales in the context of climate change.
These 45 terminations represent over $87 million in total award value, which could save up to $41 million, according to the secretary.
“I direct the assistant secretary of the Navy for research, development and acquisition to work with the contracting offices responsible for these grant and contract awards to ensure immediate cancellation and prompt disposition of remaining funds and associated activities in accordance with this order,” Phelan said.
The memo canceling DEI and climate-related contracts comes after Phelan scrapped the service’s climate action 2030 program, saying the service “will no longer be sidetracked by climate-focused decision-making.”
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