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AII-1001-85013
ReportedReported by fewer than three independent publishers, with no official finding.

DOGE AI Tool Flagged Over 2,000 VA Contracts With Flawed Cost Analysis

The Department of Government Efficiency deployed an AI tool that flagged over 2,000 Department of Veterans Affairs contracts for cancellation, but the tool made significant errors including hallucinating contract values by orders of magnitude. At least 24 contracts have been canceled based on the flawed analysis, including some supporting veteran health services, though transparency about the process remains limited.

18 March 2025 Β· Department of Government Efficiency Β· Reliability and hallucination
18 March 2025
AII-1001-850132 sources ↓
Quick facts
Category
Reliability and hallucination
Country
United States
Source
seifeur.com
Date
18 March 2025
Drafted by
Raidu Incident Detection

What happened

In early 2025, the Department of Government Efficiency (DOGE) deployed an AI tool built by software engineer Sahil Lavingia to identify unnecessary contracts at the Department of Veterans Affairs. The tool, which labeled contracts as 'MUNCHABLE', flagged over 2,000 contracts for potential cancellation.

The AI system relied on outdated and inexpensive large language models and analyzed only the first 2,500 words of contracts, without understanding VA operations or legal requirements. The tool frequently misread contract values, concluding some contracts were worth $34 million when they were actually valued as low as $35,000.

Reported impact

At least 24 contracts identified by the system have been canceled, including contracts supporting cancer treatment development via gene sequencing, blood sample analyses for VA research, and nurse care improvement tools. The VA has stated it aimed to avoid cutting contracts directly affecting veteran care due to possible harm.

Index analysis

AI and procurement experts reviewed the code and flagged it as flawed. Cary Coglianese, a professor of law and political science at the University of Pennsylvania who studies governmental use of AI, said he was troubled by reliance on general-purpose large language models, stating 'I don't think off-the-shelf LLMs have a great deal of reliability for something as complex and involved as this.'

Lavingia acknowledged the flaws, stating 'I think that mistakes were made' and said 'I would never recommend someone run my code and do what it says.'

Governance controls

The VA stated it aimed to avoid cutting contracts directly affecting veteran care due to possible harm. Congressional Democrats have been pressing VA leaders for specific details of canceled contracts without success, citing lack of transparency in the Trump administration's decisions on VA contracts.

Classification

Category
Reliability and hallucination
Industry
Government, security and defence
Country
United States
Harm status
Actual harm
Intent
Unintentional
Timing
Post-deployment
Harm types
Economic or property, Public interest
Harmed
General public, Workers
Failure modes
Hallucination, Misidentification, Overreliance, Agent misaction, Unsafe recommendation
AI systems
DOGE Contract Review Tool

Sources and evidence

This record was researched and written by the Index, based on the following original reporting.

seifeur.com
DOGE AI Tool Flagged Over 2,000 VA Contracts With Flawed Cost Analysis
propublica.org
DOGE AI Tool Flagged Over 2,000 VA Contracts With Flawed Cost Analysis