GSA orders federal government agencies slash 10 consulting firms’ contracts

GSA is directing federal agencies to identify and terminate “nonessential” consulting contracts with the top 10 highest paid firms by 7 March 2025, Federal News Network reports. The firms targeted are:

• Accenture Federal Services
• Booz Allen Hamilton
• CGI Federal
• Deloitte Consulting
• General Dynamics IT
• Guidehouse
• HII Mission Technologies
• IBM
• Leidos
• SAIC

GSA Acting Administrator Stephen Ehikian’s memo states these firms are set to receive over $65 billion in fees in 2025 and beyond, calling for agencies to justify any contracts they retain. This follows a 6 February 2025 directive urging a review of consulting contracts but escalating demands for immediate action.

DOD and VA have begun compliance. VA initially canceled 875 contracts for a projected $2 billion in savings but paused after realizing critical services could be affected. DOD’s review of GSA contracts is due by 19 March 2025, with broader consulting contract reviews due 19 April 2025.

Critics argue the initiative lacks a clear definition of "nonessential," risking disruptions in oversight, audits, and analysis functions. With federal service spending reaching $478 billion in FY 2023, this directive signals a major shift in procurement strategy, with long-term impacts on federal consulting firms and agencies alike.