Big firms offer concessions in federal consulting crackdown

Federal contractors – including Deloitte, Accenture, and Booz Allen Hamilton – have identified at least $15-billion in savings after the Trump administration pressured the industry to justify its contracts.

The GSA, the agency that handles federal procurement, issued a Monday deadline for 10 large consulting firms to submit plans on how to save the government money – either through price cuts or cancellation of non-essential contracts.

Three of the 10 firms offered a selection of options that could cut federal spending by $15 billion in the coming years, a person familiar with the matter told the Financial Times. The options include cutting consulting contracts, limiting price hikes, and moving to performance-based fees.

Some highlighted efficiency measures include reaping benefits of scale via projects that cut across departments and purchasing IT hardware and software directly from vendors rather than through government intermediaries.

The switch to performance-based fees if of particular interest to the GSA. “Restructuring contracts to be overwhelmingly outcome-based and consolidating them government-wide…will leverage the entire federal wallet and deliver significant discounts for the government and a better value for the taxpayers,” Josh Gruenbaum, commissioner of the Federal Acquisition Service within the GSA, told the Financial Times.

The consulting firm crackdown is part of wider efforts to cut federal spending, spearheaded by Elon Musk’s Department of Government Efficiency (DOGE). The department has axed tens of thousands of federal jobs and canceled numerous contracts with third-party providers, although judges have blocked many of these actions.

Deloitte has seen at least 129 of its contracts terminated or slimmed down, at a DOGE-published value of $372 million. Meanwhile, Guidehouse (formerly PwC Public Sector) has had $376 million worth of federal contracts terminated.