Trump Administration Pushes Agencies to Cut Consulting Contracts
Mar 4
U.S. government consulting contracts, particularly those among some of the largest consulting companies in the world, are catching the eye of the Trump Administration in its bid to slash spending. And companies like Booz Allen Hamilton, Deloitte and Accenture, are among those with billions on the line.
In new guidance, the General Services Administration (GSA)
ordered agencies to provide information on their contracts with the top ten firms. In a letter to agency procurement executives, acting GSA Administrator Stephen Ehikian said, “We have identified the 10 highest paid consulting firms listed below are set to receive over $65 billion in fees in 2025 and future years. This needs to, and must, change.”
The list is due by March 7, and agencies must include which contracts they want to ditch and which they plan to keep.
“For any contracts between these firms and your agency that will continue, please provide a signed statement from a senior official verifying that such contract is mission critical and provides substantive technical support,” wrote acting administrator Ehikian.
The ten companies GSA asked agencies to focus on are:
- Accenture Federal Services
- Booz Allen Hamilton
- CGI Federal
- Deloitte Consulting
- General Dynamics IT
- Guidehouse
- HII Mission Technologies
- IBM
- Leidos
- SAIC
The letter comes after GSA sent an earlier letter asking agencies to review contracts with the above firms. Acting administrator Ehikian said “not enough action has been taken,” regarding that review.
Outside experts suggest that reducing government contracts is not necessarily a bad thing but warn that it must be done thoughtfully.
“While one could debate whether some of this work is necessary or nice to have, a lot more of a thoughtful approach is needed about work that if eliminated doesn’t lead to gaps in government understanding, decision making and ultimately delivery of services to people,”
said an anonymous former GSA official to Federal News Network.
Big Spenders Moving Ahead
The Department of Defense, one of the biggest spenders on contracting, laid out plans for an analysis.
Defense Secretary Pete Hegseth
ordered the agency to “conduct a comprehensive review and validation of existing contracts for consulting services” with the intent of “terminating or descoping contracts for activities that are not essential for the Department to fulfill its statutory purposes.”
According to a Government Accountability Office (GAO)
report, federal agencies spent more than $500 billion on consulting related contracts from fiscal years (FY) 2019 through 2023, with DOD accounting for more than 46 percent of the total.
VA Contracts Questioned
Over at the Department of Veterans Affairs (VA), the administration may have moved too swiftly and is now backtracking. The VA put the brakes on contract terminations and ordered additional reviews of the programs being cut.
The
Washington Post reported that some of the 875 programs slashed helped veterans with medical services, funded cancer programs, recruited doctors, and provided burial services to veterans, according to internal VA documents.
VA Secretary Doug Collins initially said the cuts would save taxpayers about $2 billion.
Saving Money?
Despite all the attention, the contract cuts may not be saving much money for taxpayers.
Data published by the Department of Government Efficiency (DOGE)
finds that 794 out of 2,300 contracts terminated in recent weeks, or about 40%, are expected to yield no savings.
That’s typically because the total value of the contracts has already been fully obligated, meaning the government has a legal requirement to spend the funds for the goods or services it purchased and, in many cases, has already done so.
DOGE insists the canceled contracts will save nearly $10 billion, an amount questioned by independent experts.
You can track contracts terminated by DOGE at this
link.
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