US Department of Defense to purge consulting services
The Trump administration’s Department of Defense (DoD), headed by recently-appointed Secretary of Defense Pete Hegseth, announced that it would slash consulting services that do not align with the president’s priorities. Though details on the cuts are scant, here is a look at the top players when it comes to DoD consulting contracts.
An oft-repeated criticism of the US government charges it with being too dependent on consulting firms, essentially outsourcing critical governmental functions to the private sector – at huge cost to tax payers, no less. The DoD is no exception to this, billing private firms billions every year for a wide range of consulting services.
Now, with US President Donald Trump and his closest aid Elon Musk cutting enormous amounts of expenditures across the government, the DoD is next in line. Hegseth, a noted Trump loyalist, is likely to do the bidding of his bosses with little push-back, considering he already publicly defended Trump’s shocking move to fire Air Force General Charles Q. Brown Jr., one of the Pentagon’s top officials.
Hegseth’s DoD said in a memo that it will “conduct a comprehensive review and validation of existing contracts for consulting services.”
The purpose of the review is to carry out an assessment of contracts, “for the purpose of terminating or descoping contracts for activities that are not essential for the Department to fulfill its statutory purposes.”
It is important to note that the memo does not define “consulting services,” nor much less provide any details on which services they are referring to.
Determining which consultancies are the top players when it comes to DoD contracts is quite tricky because exact, up-to-date figures are not always publicly available. That being said, some of the most significant players are Booz Allen Hamilton, Deloitte, Accenture, and McKinsey & Company, all of which are known to have high-value contracts with the DoD.
So, though we do not know exactly what actions will be taken after Hegseth’s review of contracts, we can assume all DoD contracts might potentially end up on the chopping block. While major, mission-critical contracts are unlikely to be scrapped, it is impossible to know what cuts will be made.
Booz Allen Hamilton
Booz Allen Hamilton is a heavyweight in DoD contracts. This tech and defense consultancy is known for raking in billions annually from federal contracts, with a huge chunk coming from the DoD. In 2022, for example, Booz Allen Hamilton reported defense-related revenue of around $6.8 billion, according to industry analysis from USGI.
Its work spans areas like cybersecurity, AI, and mission support, all of which the DoD spends heavily on. Booz does not just offer the typical strategy consulting, but is embedded in operational and tech support, which inflates their contract values.
Deloitte
Big 4 consultancy Deloitte is another major player. While the firm does not always disclose DoD-specific numbers, their federal practice is known to be massive, and they have long been a go-to for business transformation, IT modernization, and audit-related services.
In 2023, the DoD reported that Deloitte was awarded a $450,000,000 cost-plus-fixed-fee contract for rapid research, development, testing, and evaluation – and that is just one disclosure. Last year, Deloitte was awarded a potential five-year contract worth $2.4 billion to work with the Navy and DoD on efforts to modernize and expand infrastructure for submarines.
Accenture
Accenture Federal Services, a subsidiary of Accenture focused exclusively on US federal government contracts, was awarded nearly $1.6 billion for just a single contract last year to scale and enhance Cloud One, a cloud computing platform available to the DoD. That is just one among many other such Accenture contracts over many years.
Just the fact alone that Accenture has an entire subsidiary focused on these types of US government contracts indicates just how much revenue it scores from these kind of contracts. In fact, the firm was quick to ditch DEI in line with Trump directives, in large part out of fear of losing those contracts.
McKinsey & Company
Despite a lack of transparency when it comes to DoD contracts, some of the mystery was unveiled last year in a probe by US lawmakers demanding information on contracts signed by the DoD and the Department of Justice. The impetus for the probe was outrage over McKinsey’s failure to properly disclose its work with the government of China.
The probe revealed that McKinsey has earned around $470 million from various DoD contracts since 2008, including work on the F-35 fighter jet program and projects related with microchips. That includes revenues from over 90 prime contracts with the DOD and over 15 subcontracts, according to probe.
A long list of other contracts
The very top of the list of contractors to the DoD that bill for the most amount of money are not typical consultancies, but rather defense contractors like Lockheed Martin and Northrop Grumman.
While they may offer the DoD what can be considered traditional consultancy services, the vast majority of the value of their contracts will undoubtedly be from tangible goods like missiles, drones, ships, and aircraft, but also things like training aids and other defense technologies.
RAND Corp and IDA (the Institute for Defense Analyses) also have large contracts with the DoD, but both are non-profits and thus are not in the same league revenue-wise as the big consultancies. RAND Corp does research and analysis, with contracts worth hundreds of millions, while IDA supports technical assessments. The DoD has many other contracts with these type of think-tank organizations.
The memo on the DoD cuts come as Hegseth ordered the Pentagon to reallocate around $50 billion in the 2026 budget towards initiatives that align with the goals of Trump and Elon Musk’s DOGE team.
