Consulting firms defend federal contracts amid GSA's efficiency push

Executives from leading U.S. consulting firms, including Ernst & Young and Guidehouse, are engaging with Trump administration officials to justify their federal contracts ahead of an impending deadline for agencies to assess these agreements. Notably, discussions have occurred with Josh Gruenbaum, Commissioner of the Federal Acquisition Service (FAS) within GSA, reports ​the Wall Street Journal.

This initiative aligns with the administration's broader strategy to curtail federal spending by scrutinizing consulting expenditures. The GSA has mandated that procurement officials from federal agencies evaluate and justify consulting contracts with ten prominent firms, including Booz Allen Hamilton, Accenture, and Guidehouse, by March 7. Collectively, these firms are projected to receive over $65 billion in fees in 2025 and subsequent years.

In these meetings, Gruenbaum has underscored the government's appreciation for consulting services, particularly in deploying advanced technology and modernizing agencies. However, contracts focusing on market research, analysis, or areas the administration has de-emphasized, such as diversity, equity, and inclusion (DEI) initiatives, may face increased scrutiny. Gruenbaum has assured executives that the GSA's intent is not to jeopardize firms but to conduct a thorough review of existing contracts.

Consulting firms are being prompted to "defend the spend" by delineating which projects are mission-critical and which could be eliminated. They may also need to consider pricing concessions on current contracts. Gruenbaum has indicated that firms could offset these reductions by proposing new projects or services that offer a clear return on investment. ​

This development occurs amid significant personnel changes within the GSA. Recently, twelve senior executives from the Federal Acquisition Service have departed, raising concerns about the agency's capacity to manage these extensive reviews.

DOD has initiated a comprehensive evaluation of its consulting contracts to ensure alignment with the administration's priorities. Pentagon components are instructed to identify contracts that are non-essential or misaligned with current objectives, with submissions due by 19 March 2025 for GSA-managed contracts and 19 April 2025 for others.