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Deloitte is emerging as the biggest early loser from a Trump administration push to axe spending on consultants, ahead of a Monday deadline for the companies to offer price cuts and other concessions.
The Big Four accounting and consulting firm has had at least 129 contracts terminated or slimmed down, according to a Financial Times analysis of data published by Elon Musk’s so-called Department of Government Efficiency (Doge). The figure is more than double that of any other consultancy.
Deloitte is one of 10 consulting firms that have been ordered to submit a detailed plan to save the government money, either by cutting prices or suggesting contracts that are not “mission critical” for an agency.
Accenture, IBM and Booz Allen Hamilton are among the other firms given a deadline of 5pm (ET) Monday for their proposal, which must have a dollar figure for potential savings, according to correspondence from the administration seen by the FT. Between them, the 10 firms are on course to bill the federal government $65bn in fees in 2025 and future years, the administration said.
“Each of these firms would do well to come in and say they have identified 25 to 30 per cent of savings and be very strong on why the rest is important,” said a senior official in the General Services Administration, which helps to co-ordinate federal procurement.
The GSA’s demands on the 10 firms come on top of the rolling effort across government to cut contracts and grants it deems wasteful.
Doge is claiming it has identified $130bn in savings to date, and is aiming to reach $1tn, but the methodology behind its calculations has been criticised for inconsistencies and errors. About half of the 7,100 claimed contract cancellations lack enough information for external audit.
Identifying a savings figure for a cancelled contract is also complicated by the fact that many multiyear umbrella contracts have a high ceiling that would not in fact be reached when the work is finally doled out.
Deloitte has lost contracts at almost every agency targeted by Doge, including the departments of education, health and human services and agriculture, the Environmental Protection Agency and the US Treasury.
According to Doge’s data, Deloitte’s terminated contracts will save the US taxpayer $372mn. That figure does not include any savings from one of the largest single contracts cancelled to date, an IT services deal with the Internal Revenue Service, that provided for up to $1.9bn in revenue over seven years to Deloitte and several other contractors.
The largest claimed savings from a consulting firm come from Guidehouse, which was spun off from PwC in 2018, where Doge says $376mn has been saved, a majority from a single department of energy contract. Deloitte and Guidehouse did not respond to requests for comment.
A template slide deck provided to the 10 targeted consulting firms tells them to detail and justify their government work, agency by agency, in “layman terms”, adding that “a 15-year-old should be able to understand what service you provide and why it is important”.
The firms have also been told to set out how much of their work is billed by the hour and how much is on fixed price or performance-based contracts. The GSA had been frustrated, the senior official said, that such data was not readily accessible from within government, given fragmented IT systems and databases.
One of the GSA’s aims is to encourage a shift to performance-based contracts, the official added.
At some consulting firms, the exercise has caused consternation at what some see as a lack of precision in the definition of consulting, lumping together strategic advisory work — which can be derided as analysts coming up with PowerPoints — with giant IT implementation and support projects. Some executives also pointed out the irony of a client asking its own suppliers what work to cut.
“Speaking as a consultant, this is the anthesis of how you are supposed to do this,” said a director at one targeted firm. The GSA’s template slide deck “looks like a high-schooler put it together”, they added.
Some firms, however, see the exercise as an opportunity to start moving the conversation from immediate cuts to longer-term opportunities for streamlining government — where the consultants might have a role to play.
Julie Sweet, chief executive of Accenture, said earlier this month that “we see major opportunities over time for us to help consolidate, modernise and reinvent the federal government”.
Beyond consultancy, an FT analysis of all federal contractual filings confirm that the Doge-led effort continued at pace throughout March, with some new federal agencies seeming to have been targeted to make cuts to their external obligations.
Looking at contracts where official documentation showed the awards were terminated “for convenience”, in March there were surges in contract cancellations at the US Agency for International Development and the Department for Veterans Affairs.
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