The General Services Administration (GSA) is urging federal agencies to cut nonessential consulting contracts by March 7, specifically targeting the top 10 consulting firms with which agencies spend the most. In a letter to senior procurement executives, acting GSA administrator Stephen Ehikian highlighted that these firms are set to receive over $65 billion in fees in 2025 and beyond. Agencies are required to provide a list of contracts they intend to terminate or maintain, with justification for keeping mission-critical contracts. The firms in focus include Accenture Federal Services, Booz Allen Hamilton, CGI Federal, Deloitte Consulting, General Dynamics IT, Guidehouse, HII Mission Technologies, IBM, Leidos, and SAIC. This directive follows an earlier memo from February 6, asking agencies to review and identify nonessential contracts. The Department of Defense (DoD) and Veterans Affairs (VA) have initiated reviews, with DoD focusing first on GSA-awarded contracts. The VA initially canceled 875 contracts before pausing the effort due to concerns over critical veterans’ health services. GSA emphasizes the need for a thoughtful approach, as some consulting work is crucial for government oversight and decision-making. Former contracting experts and industry representatives stress the importance of clarity in defining nonessential contracts. Federal spending on services has steadily increased, with $478 billion spent in fiscal 2023, highlighting the significance of this review. — news from Federal News Network
