Elon Musk’s government-chopping team says it slashed an Interior Department contract for nearly $3 billion for the care of unaccompanied migrant children.
The eye-popping contract total — listed as $2.9 billion in savings for the federal government on the Trump administration’s “Department of Government Efficiency” website — would represent about 16 percent of the Interior Department’s entire annual budget. DOGE lists the “savings” from that canceled agreement as the biggest-ticket line item in a list of terminated contracts it says total about $25 billion in savings across the government.
But the funding didn’t come from Interior.
The funding agency for the axed contract is the Administration for Children and Families, part of the Department of Health and Human Services. Interior is involved because the department acts as a service provider for other agencies across the government — offering everything from contract administration to payroll and employee performance services.
That makes the department a prime target for Musk’s team, which is eyeing deep cuts to federal spending and personnel.
“The Department of the Interior has interagency agreements to fulfill business support functions for other government agencies, such as sending out notices and contracts, but DOI does not fund or operate this program and is unable to answer questions about the program,” Interior spokesperson J. Elizabeth Peace said in an email.
Interior directed requests for comment about the canceled contract to HHS. That agency did not respond to a request for comment.
The DOGE cost savings listed from that contract are misleading, said a person familiar with the contract, which was awarded to Family Endeavors.
Although the total contract carried a price tag of up to $3.3 billion, that could only have been realized if the government had kids in an HHS shelter in Texas every day for five years.
Since the facility has been operational for a year and a half, and only had kids for five of those months, there’s no way the spending would hit that $2.9 [billion] even if, “starting today, [it] had kids every day for the next 3 ½ years,” said the person familiar with the contract who was granted anonymity because they weren’t authorized to speak publicly. The contract was structured for annual review and potential renewal.
But Interior’s link to that contract — and the little-known office within the department that worked on it — offer some insight into the DOGE team’s operations within Interior. That office, the Interior Business Center, employs hundreds of staffers who work on operations across the federal government.
Notably, the IBC operates a federal payroll system that was at the center of a recent dispute between DOGE employees and senior information technology staffers, The New York Times reported.
The IBC provides services to 150 agencies, including Interior’s own 11 bureaus and offices and a range of others, like the Administration for Children and Families and the U.S. Agency for International Development.
At least two DOGE employees — Stephanie Holmes and Katrine Trampe — were granted high-level access to the payroll system over the objections of career employees at Interior, the Times reported.
One person familiar with the events confirmed the Times’ reporting to POLITICO’s E&E News. That person was granted anonymity to discuss internal agency operations. Interior did not respond to questions about the reported dispute over payroll access.
“We are working to execute the President’s directive to cut costs and make the government more efficient for the American people and have taken actions to implement President Trump’s Executive Orders,” an Interior spokesperson said in response to questions about DOGE’s work at the department.
A business office in a public lands department
The IBC itself doesn’t actually draw any appropriations, instead operating on a “fee-for-service, full cost recovery mode,” and using two revolving funds established by Congress.
Interior’s own fiscal 2025 justification shows the IBC is expected to generate more than $186 million in revenues with a staff of fewer than 650 full-time equivalent employees.
Notably, the IBC operates under the Interior’s assistant secretary for policy, management and budget, a post currently filled by DOGE’s own Tyler Hassen. Hassen, who previously worked in the oil and gas industry, was quietly promoted to acting assistant secretary last month.
The IBC, which promotes itself with images of puzzle pieces fitting together and efficiently churning gears, is one of several so-called shared services providers across the executive branch. Similar offices are housed in the Agriculture, Treasury and Transportation departments.
Interior’s version of the office marks its creation in 1999, when a trio of service and administration functions merged into what was then called the National Business Center.
The business center grew again in 2005, under a George W. Bush administration initiative to streamline financial management and human resources within federal agencies.
The Office of Management and Budget named Interior’s office as one of four “centers of excellence,” along with the Treasury, Transportation and the General Services Administration.
At the time, then-National Business Center Director Doug Bourgeois told the Federal Times newspaper that his office’s top challenge was operating like a business while still being part of the federal government.
“We are challenged with establishing a business model for our center of excellence, but have to comply with and live up to all the federal regulations,” Bourgeois said in 2005. “On the one hand, you have a highly competitive market. On the other hand, you have the oversight. These two are not necessarily working hand in glove.”
The office adopted its current moniker in 2012 under then-Secretary Ken Salazar during the first Obama administration.
More recently, the IBC touted its own cost savings when it moved into a formerly empty site on the campus of the Denver Federal Center in Colorado.
The office in September held a ribbon cutting at a former “vacant, underperforming warehouse” known as Building 48. While the transition required $53 million in investments — including converting the structure to a net-zero energy facility that operates exclusively on renewable energy — the GSA noted that the shift allowed the IBC to end three private leases and will save an estimated $6 million per year.
Clarification: This story was updated to add context regarding the HHS contract with Family Endeavors.
