Top story: Deloitte, Accenture, Booz among firms at risk for losing major government consulting revenue

DOGE’s war on consultants forges on.

The Trump administration has intensified its efforts to reduce government spending on consulting services, following an Elon Musk-led cost-cutting initiative. This has resulted in the cancellation or partial termination of over 30 contracts, impacting some of the largest consulting firms in the U.S., including Deloitte, Accenture, Booz Allen Hamilton, Guidehouse, and IBM.

One of the largest contracts under review is a $1.9 billion IT services agreement with the Internal Revenue Service (IRS), led by Deloitte. While the contract was an umbrella agreement with a spending cap rather than a guaranteed expense, its cancellation highlights the administration's aggressive scrutiny of consulting expenditures. Additionally, subcontracts worth up to $256 million—of which $143 million had already been committed—have been terminated.

A notable trend in these terminations is the White House’s explicit directive to eliminate diversity, equity, and inclusion (DEI) initiatives. For example, a contract between Booz Allen Hamilton and the Federal Acquisition Service was partially canceled due to compliance with executive orders targeting DEI-related programs.

The cuts extend beyond consulting, with the Department of Veterans Affairs (VA) canceling 585 professional services contracts deemed non-mission-critical or redundant. These represent less than 1% of the VA’s nearly 90,000 contracts, but they exemplify a broader pattern of contract reductions across federal agencies, including the Department of Defense, the Social Security Administration, and the U.S. Patent and Trademark Office.

The defense sector is conducting its own review, with a deadline set for April. Meanwhile, consulting firms are struggling with uncertainty as they try to determine which services will remain viable. Some industry analysts predict a decline in government consulting revenue, previously projected to grow modestly.

Despite concerns over the impact of these cuts—such as understaffing, loss of institutional knowledge, and reduced public services—some executives see potential opportunities for government outsourcing and IT system upgrades in the long run.

While the administration insists that the goal is not to put companies out of business, officials emphasize that only services demonstrating a clear return on investment for taxpayers will be retained. The outcome of this review process will significantly shape the future landscape of federal contracting and consulting work.

Read more here.

Gossip roundup

• McKinsey cut its hiring at Booth by ~50% from ‘23 to ‘24

• Blackstone poaches senior McKinsey partner to run portfolio operations

• 1-800 Deloitte has no shortage of complaints

• Some excellent career advice for consultants to consider 

Government consulting contracts are dropping like flies…

• [NEW] Amazon / MGM Studios Strategy and Biz Dev Manager, LA, ~5+ years of consulting experience, ~$101-177k

• Udemy Strategy & Biz Ops Manager, SF / Denver, ~4+ years of consulting experience, ~$122-180k

• Handshake Strategy & Operations Manager, Office of the CEO, San Francisco, ~4+ years of consulting experience, ~$170-200k

• Chief of Staff to the CEO, Rescale (Series C enterprise software), Remote, ~4+ years of consulting experience, ~$160-200k

• Major League Baseball Strategy Manager, NYC, ~3+ years of consulting experience, ~$115-150k 

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