The United States government has terminated 401 federal contracts worth $2.1 billion (Ksh 273 billion), including two agreements connected to Kenya, in a sweeping move aimed at cutting down on “wasteful” expenditures and boosting efficiency.

In a statement issued on Friday, May 2, the Department of Government Efficiency (DOGE) announced that the cancelled contracts are part of a larger cost-saving effort initiated by U.S. federal agencies.

Kenya Contracts Among the Casualties

Two contracts tied to Kenya were scrapped in the exercise. One notable cancellation was a Ksh 35.9 million ($276,000) deal by the U.S. Treasury Department for a Kenya Programme Coordinator.

The total estimated savings from all 401 contract cancellations is approximately $613 million (Ksh 79.7 billion).

Origins of the Initiative

The contract review and termination process stems from an initiative launched during the second Trump administration, under an executive order signed on January 20, 2025. The DOGE programme aims to streamline federal operations by removing redundant or outdated obligations and contracts.

According to officials, each terminated contract was assessed based on relevance, necessity, and alignment with current U.S. policy objectives and fiscal priorities.

“We are committed to ensuring taxpayer money is used effectively. Cutting back on outdated contracts is one way to uphold fiscal responsibility,” the statement read.

Global Impact, Local Implications

While the bulk of the terminated contracts were U.S.-based, several were international, signaling a shift in Washington’s foreign engagement strategies. Kenya, as a long-time partner in various development and governance programmes, may feel the ripple effects of the withdrawal, particularly in U.S.-supported administrative or economic initiatives.

The statement did not disclose the second Kenya-linked contract, but confirmed that multiple departments were involved in the review.