Time’s up, pencils down. Today is the deadline for agencies to justify their work with 10 large consulting companies to contract-slashers at the Department of Government Efficiency (DOGE), and the industry infamous for charging exorbitant fees for PowerPoints is quaking.
There isn’t a firm more worried than Booz Allen Hamilton, which relies on the US government for 98% of its $11 billion in annual revenue. The company started advising the Secretary of the Navy in 1940, eventually separating its private sector advisory business in 2008. Now, it focuses on government-related contracts:
- Booz Allen does everything from operating national park campsite reservation websites to developing cybersecurity tools for the Department of Defense.
- The firm’s stock has dropped nearly 30% since Trump was elected.
Other companies like Accenture, General Dynamics (which both helped with the botched rollout of the new FAFSA last year), and CGI Federal (which helped with the botched rollout of HealthCare.gov in 2013) will be judged by DOGE as to whether or not they are mission critical.
Firms are scrambling to win over the current administration. Accenture said it was “sunsetting” diversity goals. Deloitte told staff working on government contracts to take pronouns out of their email signatures. IBM said in a statement that it has been advocating for the use of technology to streamline operations and use taxpayer dollars more efficiently. Booz Allen CEO Horacio Rozanski said in an interview that the firm actually operates as a tech company, not a consultancy.
McKinsey & Company, on the other hand, is probably feeling pretty smug right now. The company was all but pushed out of government contract work after its involvement with opioid-maker Purdue Pharma.
Looking ahead…federal agencies spent $500 billion on consulting contracts from FY 2019 through 2023, according to the Government Accountability Office. The biggest spender, barely touched by DOGE, is the Department of Defense, which accounts for over 46% of that amount.—MM
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