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.
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The AI system relied on outdated and inexpensive large language models and analyzed only the first 2,500 words of contracts, without understanding VA operations or legal requirements.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
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.