Jettisoning Ms. Chambliss is just the beginning. There's going to be many more shake-ups in Consulting.
https://www.wsj.com/business/consulting-giants-offer-billions-in-cuts-to-federal-contracts-it-might-not-be-enough-f7c872d2
Accenture, Deloitte, IBM and other firms proposed price concessions this week but are expected to be asked to dig deeper
By: Chip Cutter
April 2, 2025 5:30 am ET
The 10 biggest U.S. consulting firms to the federal government have offered to cut billions of dollars from their contracts with agencies but face pushback from the Trump administration to deliver even deeper savings.
Companies including Accenture, Booz Allen Hamilton, Deloitte, IBM and others met the General Services Administration deadline this week to justify their contracts and identify potential cost cuts to existing projects. Trump administration officials are expected to go back to some of the firms, demanding further price concessions or other revisions, according to people familiar with the review process.
Some companies missed the mark by submitting too little in savings or by sending voluminous pages of PowerPoint slides explaining their work, the people said, while other firms identified detailed potential cuts. At least one company outlined $12 billion in potential savings to the government, according to a person familiar with the matter.
The chief executive officer of Booz Allen, which generates nearly all of its $11 billion in annual revenue from contracts tied to the U.S. government, said his firm had proposed more than $1 billion in savings related to its own projects. The firm identified Booz contracts that agencies could review or potentially cancel and proposed dozens of other ideas to streamline the way the government functions.
Booz also suggested the government shift more contracts to performance-based pricing arrangements and earmarked some projects that could be done by the government itself, said Horacio Rozanski, Booz Allen’s CEO.
“There is some work that in the spirit of efficiency, the government could choose to in-source,” Rozanski said in an interview. Other firms have proposed similar types of efficiencies.
Leidos, another large contractor, provided the GSA with a “detailed set of options for meeting the administration’s goal of making the U.S. government more efficient and cost-effective,” a spokesman for the firm said. He declined to give a cost estimate of any of its proposals.
Accenture and IBM didn’t comment. Deloitte didn’t respond to a request for comment.
In its push to slash spending across the federal government, the Trump administration initiated a review of government contracts earlier this year, asking the 10 biggest consulting firms to the government to “defend the spend.” It said those firms alone are set to receive more than $65 billion in fees in 2025 and future years.
The push has weighed on the firms’ stocks and prompted a flurry of meetings with Trump officials. Many executives have sought time with Josh Gruenbaum, a former director at private-equity firm KKR who was picked by President Trump as the GSA’s procurement chief and is now leading the broad review of consulting spending.
Since Trump’s election in November, Booz Allen and Accenture shares have declined about 40% and 12% respectively, while shares of Leidos have dropped 30%. Meanwhile, the S&P 500 index has fallen 5% since then.
The proposals will now be reviewed by the federal agencies overseeing the contracts, and the GSA has told the consulting firms their responses will be compared against their rivals’.
“I have no doubt that you’ll see some progress made because the companies are going to respond to what the government tells them to do,” said Stan Soloway, the former head of the largest trade association of government-service contractors, who is now CEO of consulting firm Celero Strategies.
Soloway said federal agencies could also make a push to preserve contracts the GSA looks to cut if they see the work as necessary to their missions.
Plenty of firms are already feeling the results of the administration’s focus on costs. Accenture CEO Julie Sweet said last week that as the government works to streamline spending “many new procurement actions have slowed, which is negatively impacting our sales and revenue.”