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Elon Musk’s Doge to expand blitz against spending on consultants

The Trump administration expands its attack on government spending on consultants, after the campaign to cut the costs by Elon Musk to cancel dozens of contracts and threatened hundreds of others.

Ten of the largest United States Consultants They were told that, until Friday, to justify billions of dollars from the ongoing projects of the federal government, and officials informed the Financial Times that they had planned to expand the number of targeted companies in the coming weeks.

FTT analysis shows that more than 30 contracts of ten consultants have been completely canceled or partial. The Signty is an umbrella contract that covers information technology services for internal revenue service, led by DELOTTE, at a value of $ 1.9 billion over a period of seven years.

“Only the services that have an investing investment for taxpayers will remain,” said Josh Grinbum, a federal acquisition commissioner, which helps to coordinate government purchases.

“Any institution with $ 36 million of debt while a dollar deficit is operated annually in the current interest rate environment will be significantly responsible if they are not underwent a written audit on all cash flows.”

It includes the ten consultants who initially target DELOTTE, Accenture, Booz Allen Hamilton, Guidehouse and IBM. FT analysis covers the contracts held by these companies, which, according to federal revenues, were the subject of “ending a convenience” notifications.

The number of these cancellation in the six weeks that has passed on the opening of Donald Trump is higher than the total in any full year, which confirms the speed called musk on the so -called Ministry of Governmental efficiency (Doug) tries to reduce spending.

Contracts are complicating a wide range of federal entities, including enforcement of immigration and customs, the Ministry of Defense, Social Security Administration, and the US Patent and brands office. In five cases, cancellation is explicitly related to the White House directives of AX diversity initiatives.

A contract between Bowouz Allen Hamilton and the federal acquisition service were partially “to comply with diversity, fairness, and integration, arrival orders (DEI)”, according to one report.

The possible cost of contractors in the procedures is not clear, not the least of which is that some cancellation may be partial and some contracts may be re -created in the future. If the Tax Authority is held, the $ 1.9 billion number was the maximum spending instead of cost expectations, and no bills were done by DELOTTE or other contractors.

The remaining ends, especially the subcontracting contract, which were entered into the largest “comprehensive purchase agreements”, were included, as their value of up to 256 million dollars, of which 143 million dollars were already committed.

Executive officials from some of the targeted companies from the Trump administration employees met to defend consulting projects, and “additional meetings will continue in the coming weeks,” according to a senior official in the Public Services Department, which helps to coordinate federal purchases.

The official said that the administration expected the list to expand the list after the initial reviews, and added: “GSA expects this to take this to take this seriously. Saying that every contract is important is not realistic. Projects that support the critical task may remain, and may deepen, but at good and fair prices for the government and taxpayers.”

The Ministry of Defense is conducting its own review of the consulting contracts, with the deadline in April.

Industry analysts said that the reviews, which are at the top of the mass shooting in some departments and a large group of executive orders that reflect the Biden era initiatives, caused widespread confusion.

“People do not know what is happening,” said Fiona Cheresaka, CEO of the Global Source Group. “Even those who have not been abolished contracts are concerned that the parts of the government they work are” Doge’d “, and therefore they may not have money to complete the work.

Source Global is preparing to reduce its expectations for administrative consulting revenues from the US public sector, which represents about 6 percent of the United States market and a total of $ 6 billion last year.

I expected the growth of 1 percent this year, which is accelerating to 3 percent in 2026, but it is now expected to “decline” in 2025 with the start of current contracts and an explicit decline next year. She says the numbers are temporary, given the high level of uncertainty.

The numbers exclude the complementarity and development of IT systems, which the Trump administration indicated that this week’s review is not the focus, although some analysts fear that these projects may also be affected.

“The companies do not know what is exactly what is on the cutting block, or what constitutes the consulting in a way, so they don’t know where you need to focus,” said John Kossis, chief of technology business analysts.

Dog is organizing measures to reduce costs throughout the government that includes Group fire From federal workers, freezing Aid projects And eliminating the agency’s jobs in a way that critics accused is random and blind to the consequences.

“In an ideal world, we will see a decrease in consulting vehicles and increase the employment of public officials responsible for their replacement,” said Benjamin Bronges, Associate Professor at Washington University. “This will not happen, and therefore the result will be the faction employees, the loss of institutional knowledge and the failure to provide many basic public services.”

Some executives in the consulting industry have expressed optimism that after the initial stage of a complete Doj strategy, there may be profitable opportunities to use external sources of government services or implement new information technology that improves efficiency.

Earlier this week, a government agency, the Ministry of Old Warriors Affairs, said that it has already completed the review of professional services contracts approximately 2000, and will cancel 585 non -forest or duplicate contracts, which represents “less than 1 percent of the 90,000 contracts currently.”

The news from the Ministry of Old Warriors Affairs led to a gathering in the shares that are beaten by the government contractors, many of which increased by more than 4 percent on Tuesday when the broader market decreased by 1.2 percent.

The sector has still decreased by more than a third since the presidential elections in November.

“We are not looking to remove anyone from working,” said a senior GSA official. “But they need to be frank when analyzing its value regarding the return on investment.”

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2025-03-06 05:00:00

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