Andrew Cameron and his small Pleasanton-based software company were in the fourth year of a federal contract with the Department of Housing and Urban Development when, without warning or explanation, he received a notice informing him the government was terminating his contract.
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WATCH HEREI don’t think it’s a good idea for the government and it certainly is hard for me.
Andrew Cameron, small business owner who had his federal contract abruptly cancelled
“I was surprised, I was disappointed,” said Cameron. “I don’t think it’s a good idea for the government and it certainly is hard for me.”
It was a devastating blow to Cameron’s company, Bern Resource Group, since the HUD contract accounted for more than half of the business’s revenue.
“It’s a big drop in income,” Cameron said.
Bay Area businesses, nonprofits lost $117 million in govt. contracts
Cameron’s company is among dozens of Bay Area businesses and nonprofits that have found themselves in the crosshairs of the Department of Government Efficiency (DOGE), the brainchild of tech mogul Elon Musk, who says the agency is on a mission to root out waste, fraud, and abuse within the federal government and purge initiatives tied to Diversity, Equity and Inclusion (DEI).
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SIGN UP DOGE claims it has saved taxpayers more than $32 billion since January by cancelling more than 9,000 government contracts. Among them are at least 118 contracts linked to Bay Area companies, nonprofits, or work being performed in the region, according to an NBC Bay Area analysis of DOGE data and records from the Federal Procurement Data System. The cuts exceed $117 million in value, according to DOGE records.
Those figures don’t include additional billions-of-dollars in grants the agency has also slashed, which have had major impacts on research across Bay Area nonprofits and universities, such as UCSF.
NBC Bay Area reached out to dozens of companies and nonprofits whose contracts were put on the chopping block. Many never responded. Others, some of whom said their work has been decimated, did not want to speak out, fearing they could face retribution or sink future contract opportunities.
Based on descriptions posted on DOGE’s self-described “wall of receipts,” featured prominently on the agency’s website, the terminated Bay Area contracts include services such as environmental consulting, education research, translation services, expert witness testimony, as well as subscriptions to online platforms such as LinkedIn.
Despite DOGE’s quest to score savings, dozens of cancelled contracts in the Bay Area actually come with zero savings to taxpayers, according to details on DOGE’s own website. At the other end of the spectrum, DOGE has said its termination of a Department of Defense contract with Oracle America yielded more than $40 million in savings. Oracle did not respond to NBC Bay Area’s request for comment.
Waging a 'war on waste'
While DOGE says the agency is waging a “war on waste,” Bay Area business owners and nonprofit researchers who spoke to NBC Bay Area described many of the cuts as haphazard, and warned the contract terminations could ultimately harm the government in the long run. They contend the termination notices came without warning and little-to-no explanation, upending important work, forcing employee layoffs, and creating an atmosphere of fear and anxiety about what might come next.
One such casualty was a Small Business Administration contract with the small, woman-owned business Dfusion, based in Scotts Valley. The company lost an in-progress contract to study what’s driving a surge in entrepreneurship among Black and Latina women since the pandemic.
“So that screams DEI,” said B.A. Laris, a senior program manager at Dfusion who said they received no explanation for the cancellation, but speculated DOGE’s stance on DEI efforts was the likely culprit.
“We were anticipating that there would be some changes in priority [with the new administration] that were understandable, but that it wouldn’t be as across-the-board catastrophic of an attack on research and science in general,” she explained.
Laris said the contract was relatively small – worth south of $300,000 – but still had a major impact on their small business. The cuts, in addition to two other government projects they fear could be impacted, have forced the company to downsize, Laris said.
“A month ago, we were 12 people,” she noted. “We are currently four people as of April.”
While Laris believes Dfusion was a casualty of the Trump administration’s mission to dissolve any initiatives linked to DEI, others, like Cameron, were left scratching their heads as to why their business landed in the crosshairs of the federal government. Cameron spent weeks trying to get answers from HUD, he said, but the employees he used to interact with on a near weekly basis haven’t provided any clarity. NBC Bay Area reached out to HUD as well but never received a response.
“I knew this contact wasn’t in any area that should have been affected by those DOGE cuts,” Cameron said. “It has nothing to do with fraud, waste, or abuse. This is in a revenue-generating program area of HUD and has nothing to do with DEI. So, I really thought my contract was safe.”
Turns out it wasn’t.
Like many of the cancelled contracts, Cameron was informed his work was being “terminated for convenience,” a clause in federal contracts allowing work to be cancelled for seemingly any reason so long as the government deems it is in its best interest to do so.
Cameron said cancelling the contract of his company, which analyzes the creditworthiness of hospitals hoping to score mortgage insurance from the federal government, could end up costing the taxpayers more than the contract termination is saving.
“One bad loan deal that they do without having the right data to inform it, I personally think they could lose millions of dollars,” Cameron said.
One bad loan deal that they do without having the right data to inform it, I personally think they could lose millions of dollars.
Andrew Cameron, a small business owner who worries HUD could be on the hook for millions of dollars without the added insight his online platform had offered the agency for years
DOGE acknowledges mistakes
DOGE’s declarations about the savings it’s delivering to taxpayers have received pushback, and the department’s claims haven’t always been accurate.
The savings the agency boasts on its website don’t factor in “wrap-up” costs the government often has to pay when closing out contracts for expenses that have already been incurred, such as the $43,000 they recently paid Bern Resource Group.
Also, many of these contracts are set up like a line of credit, so the savings boasted by DOGE are the amount the government could have spent, but not necessarily what the costs would have actually been.
In one case, DOGE claimed that a cancelled Department of Homeland Security contract saved taxpayers $8 billion, when the actual amount was $8 million, according to the contract.
In another case, the agency cited $50 million dollars the U.S spent on supplying condoms to war-torn Gaza, but then later acknowledged that wasn’t true.
We will make mistakes and we will act quickly to correct any mistakes
Elon Musk, commenting on DOGE's promise to accurately report details relating to the thousands of government contracts recently terminated by the federal government
“Nobody is going to bat a thousand,” Musk said in February. “You know, we will make mistakes and we will act quickly to correct any mistakes.”
In Northern California, records show DOGE has had to walk back more than a dozen contract cancellations, most of them involving overseas humanitarian work through USAID. Fifteen Northern California-based USAID contracts used to appear on the agency’s wall of receipts, but no longer do.
In some cases, contracts were reinstated because they had been mandated by Congress, like in the case of a Monterey company that was studying the effectiveness of a federal program that aims to help veterans find employment and get back on their feet.
In San Francisco, the education nonprofit WestEd, is also hoping a number of its own contracts will get revived after getting hit with the DOGE axe.
“This has just been a very startling moment because we don't actually understand the ‘why’ behind some of these cancellations,” said Catherine Walcott, WestEd’s Chief Growth and Strategy Officer.
“What’s at stake is our most vulnerable populations…students, often vulnerable students, who cannot afford to lose another year of learning.”
Nonprofit had $42 million in contracts abruptly cancelled by Dept. of Education
The organization said the Department of Education terminated roughly $42 million worth of work involving WestEd, including educational services and research focusing on disenfranchised populations. In Sacramento, that includes adults hoping to return to the classroom and underprivileged students learning to read. Santa Clara County programs have been impacted, too, including those aiming to assist non-native English speakers who are struggling with math.
The Department of Education did not respond to NBC Bay Area’s requests for comment.
“I think [the cuts] could set us back further,” Walcott said. “And moreover, the educators who support them.”
The contract terminations have already forced WestEd to lay off about 50 employees, according to Walcott.
In Pleasanton, Andrew Cameron is slashing his own spending, too.
“I’m cutting back on insurance, I’m cutting back on people I hired,” he said. “I’m cutting way back, yeah.”
His lost contract means he will be out more than $300,000 over the next year and a half, he said, money he hoped to use for his staff, equipment, and his daughter’s tuition when she enrolls in college this summer.
“It went away so abruptly,” he said. “I need to pivot, and quickly, to find additional work.”
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