Consulting firms are facing increased scrutiny as the Trump administration intensifies its efforts to streamline government spending. Among the top consulting firms under the spotlight, Deloitte is facing the most significant heat, with at least 127 of its government contracts being cut or modified since January. This is twice the total for the next consulting firm on the administration's list, according to data analyzed by Business Insider.
As one of the federal government's highest-paid consultancies, Deloitte, along with other major firms like Accenture, Booz Allen Hamilton, IBM, and General Dynamics, is being closely monitored in the government's drive to eliminate wasteful expenditures and enhance efficiency. The Trump administration estimates that the modifications to Deloitte's contracts will result in savings of about $371.8 million for taxpayers.
Notable among the savings achieved from Deloitte's contracts are $51.4 million from an IT services contract with the Centers for Disease Control and Prevention, and $1.1 million from a contract focusing on diversity, equity, inclusion, and accessibility training that has been in operation since 2020. Deloitte's annual contracts with federal agencies amount to $3.3 billion, which is nearly 10% of its total annual revenues, as per the firm's recent earnings report.
Booz Allen Hamilton, which garners almost all of its $11 billion in annual revenue from the public sector, ranks as the second most impacted firm on the list, with 61 contracts being cut. Accenture has seen at least 30 contracts cut, resulting in savings of $240.2 million, according to data provided by the White House DOGE office.
During an annual earnings call, Accenture's CEO, Julie Sweet, expressed concerns about the impact of the government's cost-cutting initiatives on the firm's revenues, and there are apprehensions about potential layoffs among the staff. While some firms like CGI Federal declined to comment, others such as Leidos have indicated they will continue discussions with the administration. The remaining firms on the list have not responded to inquiries regarding their government contracts.
The General Services Administration cGSAc, the government's largest procurement agency, is spearheading the reevaluation of federal consulting expenditures. Separate from DOGE, the GSA revealed that contracts with the 10 listed firms were projected to yield over $65 billion in fees in 2025 and beyond. In a bid to streamline costs, the GSA requested these consultancies to submit a detailed scorecard outlining their pricing structure and proposing areas for cost reduction.
The consultancies were also asked to identify which contracts are essential to mission-critical operations, with an emphasis on simplicity in communication to ensure clarity. The GSA mandated that the service descriptions be understandable even to a 15-year-old. Following the submissions of the scorecards, the GSA and federal agencies are now reviewing the information to determine further cuts aimed at reducing waste and transitioning towards outcome-based contracts.
CEOs and top executives of consulting firms have expressed alignment with the administration's objectives. The ongoing review process is expected to lead to additional modifications in government contracts to drive efficiency and value for taxpayers. The focus is on moving away from indefinite contracts towards a more goal-oriented approach.
In summary, the government's scrutiny of major consulting firms is reshaping the landscape of federal contracting, with a concerted effort to optimize spending, enhance transparency, and deliver better outcomes for the American public.
