. . . DOGE's rapid implementation and the ensuing legal tumult reflect a bold reimagining of federal efficiency reforms, diverging from the established path of external auditing while echoing historical precedents in a distinctly modern guise. . . .
I. Introduction
On January 20, 2025, President Donald J. Trump signed Executive Order 14158, transforming the U.S. Digital Service ("USDS") into the Department of Government Efficiency ("DOGE") and tasking it with auditing and modernizing federal agencies under Elon Musk's leadership as a special government employee ("SGE"). SeeExec. Order No. 14158, 90 Fed. Reg. 8441 (Jan. 29, 2025). Within weeks, DOGE's auditors accessed the Treasury Department's payment systems as well as other government agencies, sparking a wave of legal challenges'over twenty lawsuits alleging violations of constitutional, statutory, and regulatory norms. Among these, State of New York, et al. v. Trump, et al., Case No. 1:25-cv-01144, ECF No. 76 (S.D.N.Y. Feb. 21, 2025) ("Op."), stands out as an instructive benchmark, with its preliminary injunction halting DOGE's Treasury access until certain procedural flaws are corrected. Yet, federal auditing by private firms like PricewaterhouseCoopers ("PwC") under the Federal Acquisition Regulation ("FAR") proceeds routinely without such contention. If PwC can scrutinize agency systems as an external actor, why has DOGE'an internal government entity'ignited such a firestorm?
The answer lies in a novel and calculated choice by the new administration. Eschewing the FAR's protracted procurement process for Big Four firms, Trump opted for Musk and his hand-picked team, blending SGEs who retain their private roles with agile direct government hiring of young talent. This workaround of FAR, harnessing this unique blend of talent and accelerating action, bypasses the delays and rigidity of traditional auditing contracts. The district court's preliminary injunction ruling in State of New York validates, for now, DOGE's intrusion into the role of traditional outside auditors like PwC, provided vetting, training, and supervision meet federal standards. Through this lens, DOGE's spirited in-house model, though fraught with untested procedural risks, offers a potent alternative to external auditing firms in swiftly implementing consequential efficiency gains within the federal bureaucracy.
II. Background
DOGE's rapid implementation and the ensuing legal tumult reflect a bold reimagining of federal efficiency reforms, diverging from the established path of external auditing while echoing historical precedents in a distinctly modern guise.
A. The Creation of DOGE
By signing Executive Order 14158, President Trump restructured the USDS'launched in 2014 by President Obama and funded in 2021 by Congress (Pub. L. No. 117-2, Sec. 4101, 135 Stat. 4 (2021))'into DOGE, an entity charged with sweeping governmental efficiency reforms. Rather than engaging outside auditors like PwC through the FAR's lengthy procurement process, DOGE instead operates internally, leveraging USDS's framework within the Executive Office of the President. Elon Musk, appointed as an SGE under 18 U.S.C. ' 202(a), leads this effort, retaining stewardship over his private ventures (e.g., Tesla and SpaceX) with a 130-day tenure limit. DOGE's personnel assigned to audit the Treasury comprise two types: SGEs like Thomas Krause, who continues as CEO of Cloud Software Group (Op. at 9 (citing Second Krause Decl., ECF No. 33, ' 6)), and direct hires like Marko Elez, a young software engineer deployed by DOGE to Treasury (Op. at 10 (citing Wenzler Decl., ECF No. 31, ' 9)). This in-house approach sidestepped FAR's competitive bidding and vetting mandates, enabling rapid deployment of DOGE resources outside of conventional procedures.
By mid-February 2025, DOGE's footprint across the bureaucracy was undeniable. DOGE auditors were hard at work at Treasury, reviewing the Bureau of Fiscal Services ("BFS") payment systems that process $5.46 trillion annually across 1.2 billion transactions; involved in staffing reductions, including over 26,000 probationary positions government-wide; and had identified at least $6.5 billion of suspect funds to carve from USAID's $47.8 billion budget. This swift action triggered a robust legal counteroffensive. Over twenty lawsuits emerged, including lawsuits alleging everything from Appointments Clause violations to breaches of classified data protocols. In State of New York v. Trump, the plaintiffs, a group of 19 states, challenged DOGE's access to Treasury's payment systems, asserting violations of the Administrative Procedure Act ("APA"), Privacy Act, Internal Revenue Code, and various provisions of the Constitution. See Case No. 1:25-cv-01144, ECF No. 7 ("Compl."), ' 138-140. The district court's February 8, 2025 Temporary Restraining Order ("TRO") (ECF No. 6) and February 21, 2025 preliminary injunction (ECF No. 76) scrutinized this FAR workaround to determine whether DOGE's personnel structure and procedural execution were lawful.
B. Historical Precedent for DOGE
Efforts to streamline the federal government's operations are woven into the fabric of U.S. history. The Hoover Commissions (1947-49), authorized by Public Law 80-162, enlisted external advisors who proposed 273 structural reforms, including the unification of the Department of Defense. The Grace Commission (1982), established by Executive Order 12369, deployed private-sector experts who recommended $424 billion in savings across various government agencies. President Clinton's National Performance Review (1993) eliminated 250,000 federal positions through consolidation of government agencies. These initiatives, whether externally advised or internally driven, share DOGE's efficiency goals but differ in their operational frameworks.
DOGE aligns more closely with modern precedents of outside auditing firms examining agency operations. For example, outside auditing firms have audited the Department of Defense'such as PwC's 2021 audit of the Institute for Defense Analysis. See Report No. DODIG-2021-087. Components of the Treasury Department have similarly faced external audits'such as KPMG's 2023-24 audit of Treasury's consolidated financial statements. See Report No. OIG-25-12. Yet, where these audits relied on FAR's structured regulatory framework, DOGE's in-house rebranding of USDS introduced a flexible alternative, trading procedural rigidity for rapid action'a choice that opened both opportunities for swift review of government accounts and avenues for legal contests.
III. Comparing...
