Summary Bullets:
• The US administration is making clear its aim to improve government efficacy and slash expenses across the board.
• In IT, the General Services Administration (GSA) singled out its 10 largest consulting partners, demanding they justify their contracting value to reduce the current $65 billion public sector spend.
Change is inevitable with administration transitions, but the sharp pendulum swings the Trump US presidency brought with it have been swift and dramatic. There is no surprise that cuts were coming, but the shock is the speed and scale at which it is happening, and the profound impact these moves are having on IT specifically.
In February 2025, the GSA, i.e., the agency that supervises government procurement, issued a memo directed to top procurement officials in all federal agencies requiring them to “defend the spend’ on contracts with the 10 consulting firms that represent the biggest projects from a financial perspective. The GSA is putting the onus on agencies to demonstrate how these engagements are essential to helping the federal government deliver on its mission. These firms include Accenture, Booz Allen Hamilton, CGI, Deloitte, General Dynamics, Guidehouse, Hill Mission Technologies, IBM, General Dynamics, Leidos, and Science Applications International Corp. (SAIC).
The Wall Street Journal reported the administration drafted a new letter to the consulting firms to outline pricing and offer up areas where costs can be reduced in their current engagements with federal agencies. Responses to the letter are due by March 31, 2025.
Consulting firms are already feeling the pain. In an earnings call with Wall Street analysts, Accenture Chairman and CEO Julie Sweet noted that during the administration process to improve government efficiencies, “many new procurement actions have slowed, which is negatively impacting our sales and revenue.” Public sector sales count for approximately 8% of Accenture’s global revenues.
Sweet added, “the GSA’s guidance is ‘to terminate contracts that are not deemed mission-critical by the relevant federal agencies.’ While we continue to believe our work for federal clients is mission-critical, we anticipate ongoing uncertainty as the government’s priorities evolve and these assessments unfold.”
US President Donald Trump signed an executive order on March 20, 2025 consolidating the IT procurement process under the GSA. The GSA will take over as the executive agent of all government-wide acquisition contracts (GWACs) for IT. The aim is to have one agency that is already set up to manage the procurement process oversee most IT contracts because it “will eliminate waste and duplication, while enabling agencies to focus on their core mission of delivering the best possible services for the American people.”
The executive order gives the GSA the option of deferring or declining its role as executive administrator for GWAC contracts when it is not in the best interest of the individual project. The Office of Management and Budget (OMB) will advise agencies in the next two weeks as to how to move forward.
All this comes at a time of turbulence in the US in the midst of tens of thousands of federal probationary employees losing their positions. Specific departments are taking the proverbial, or if you are Senior Advisor to the President Elon Musk literal, chainsaw to their staffing rolls. The Department of Veterans Affairs has plans to cut its workforce by 80,000. The Department of Education let go approximately half of its staff of 4,133.
Time will tell what the net effect of these actions will be. In the interim, the rollercoaster of change will have a lot of federal workers and IT firms hanging tight onto the rail.