Ey, Gsa, Guidehouse, Booz Allen & Other Consulting Bosses Meet With Trump Officials To Save Contracts

By Chip Cutter

Executives at some of the biggest U.S. consulting firms are meeting with Trump administration officials to defend their projects ahead of this coming week's deadline for government agencies to justify major consulting contracts.

In recent days, top executives at professional services firms including Ernst & Young and Guidehouse have met with officials including Josh Gruenbaum, the Federal Acquisition Service commissioner within the General Services Administration, according to people familiar with the discussions. A Booz Allen executive has also been in touch with Gruenbaum, who is a former director at the private-equity firm KKR.

The flurry of meetings comes amid a Trump administration review of consultants and government contracts as part of a push to rein in federal spending. The General Services Administration, or GSA, has asked procurement officials at federal agencies to list and justify consulting contracts from 10 companies — including Booz Allen, Accenture, Guidehouse and others — that the agencies intend to keep. The responses are due on Friday.

The GSA has identified that the 10 highest-paid consulting firms are set to receive more than $65 billion in total fees across 2025 and future years. That is money that has yet to be spent, and comes from contracts tagged as "consulting services" within the Federal Procurement Data System from the top governmentwide vendors, according to a person familiar with the matter.

In the meetings with consultants, Gruenbaum has emphasized to executives that the government sees value in consulting — particularly in rolling out advanced technology and modernizing government agencies.

What may be frowned upon are contracts providing market research and analysis or supporting work on topics the Trump administration has de-emphasized, such as diversity, equity and inclusion issues. Gruenbaum has assured executives that the GSA wasn't looking to put firms out of business but would be doing a deliberate review of existing contracts, according to the people familiar with the discussions.

Consulting firms are being asked to "defend the spend," by explaining which of their existing projects they see as mission critical to the government's goals, and which could be cut. Firms may be asked to make pricing concessions on existing contracts, though Gruenbaum has told executives that they could make up for the cuts by also suggesting new projects or services to the government that could offer a demonstrable return-on-investment, the people said.

"The private sector provides incredible products that help make the government better. We value their partnership, which is why we're meeting with them," Gruenbaum said in a statement, adding that "we welcome them working with us to decrease our excessive government spending while continuing to provide the essential services the government needs."

After the initial high-level meetings with GSA officials, consulting executives are being asked to return with presentations providing a detailed assessment of their projects. Gruenbaum said in a statement that the spending reviews are necessary because of soaring government debt.

Write to Chip Cutter at chip.cutter@wsj.com

Accenture , General Dynamics and IBM are among 10 companies now being targeted by the General Services Administration as the "highest paid" consultants for US government, according to multiple media reports.

The Trump Administration is looking to rein in federal spending by eliminating "nonessential" contracts by government departments and agencies to such firms.

The news outlets cited a memo to senior procurement officials at most federal agencies this week by GSA acting administrator Stephen Ehikian that named 10 companies that are set to receive over $65 billion from the government for consulting work during 2025 and beyond. He asked the procurement officers to list contracts their agencies consider mission critical.

Responses are due March 7, according to the reports.

A GSA spokesperson did not specify which firms were included in the memo, but told MT Newswires that "GSA initially asked agency partners to write a short explanation about why consulting contracts were essential for them to fulfill their statutory purposes." But, more detailed responses were required and GSA is in the process of collecting additional information.

Other seven firms reportedly tagged by Ehikian for potential cuts were Booz Allen Hamilton , CGI , Huntington Ingalls Industries , Leidos and Science Applications International , along with privately held Deloitte and Guidehouse.

None of the 10 firms immediately returned messages from MT Newswires on Friday seeking comment.

The impact of cancelled contracts would vary by firm but may be daunting regardless of their size. For example, The Wall Street Journal on Friday profiled Booz Allen particularly imperiled with 98% of its yearly revenue derived through federal contracts.

By Chip Cutter

The Trump administration is looking to cut federal contracts. Few companies stand as exposed as Booz Allen Hamilton.

The venerable Washington, D.C., area firm works on projects across the U.S. government. It operates a website visitors use to reserve campsites at national parks. It is modernizing healthcare records for veterans, beefing up technology at the Federal Bureau of Investigation, and rolling out a suite of artificial-intelligence and cybersecurity tools across the Department of Defense and other federal agencies.

A memo sent this week from Stephen Ehikian, the acting administrator of the General Services Administration, calls on procurement officials at federal agencies to list and justify consulting contracts from 10 companies — including Booz Allen, Accenture, Deloitte and IBM — that the agencies intend to keep. The responses are due March 7.

Booz Allen generates 98% of its roughly $11 billion in annual revenue from contracts in which the end client is a U.S. government agency or department. It has told investors that it sees the U.S. government as the world's largest consumer of management consulting and technology services. Since the election of President Trump in November, its stock is down about 30%.

In the memo, viewed by The Wall Street Journal, Ehikian said the GSA has identified that the 10 highest-paid consulting firms are set to receive more than $65 billion in fees in 2025 and future years. "This needs to, and must, change," Ehikian wrote, bolding the sentence for emphasis.

Some consulting firms say it is unclear how the $65 billion figure was calculated. A spokesperson for the GSA didn't immediately respond to a request for comment.

Ever since 1940, when Booz Allen took on a project advising the secretary of the Navy ahead of World War II, the company has had a foothold in the federal government. Booz Allen separated its corporate-consulting arm from its government-advisory business in 2008, with the government business retaining the original name.

Today, the company, which employs more than 34,000 people, operates not as a consulting firm but as a technology company, CEO Horacio Rozanski said in an interview. Booz Allen says it now has one of the largest AI businesses in the federal government. About 70% of its employees work in technology today, up from about 20% in 2012.

Booz Allen has been through presidential transitions before, and will weather the reviews of federal contracts, Rozanski said. The company's work also aligns with the Trump administration's priorities, he said.

"We recognize that in the short-term there could be some disruption to the market, but in the long-term we are really well aligned," he said. "If the government wants to operate with fewer people, it will need to operate with more technology, and technology that works. And our stuff works, and it works beyond the prototype."

The Elon Musk-led Department of Government Efficiency has already claimed to cut a small number of Booz Allen contracts, including at the Labor Department and the Commerce Department. Some of the company's competitors, such as Accenture and Deloitte, have also had contracts cut. Spokespeople for Accenture and Deloitte didn't immediately respond to requests for comment.

Accenture got 17% of its North American revenue from the U.S. government last year. Another big federal contractor, Leidos, got about 87% of its revenue from the government providing national security and technology services, including scanners at airport checkpoints.

A range of government officials have recently taken aim at consultants. In a post on X Tuesday, Doug Collins, the Department of Veterans Affairs' newly confirmed secretary, said the VA was canceling nearly $2 billion in contracts. "No more paying consultants to do things like make Power Point slides and write meeting minutes!" he wrote.

The VA said earlier this week that no final decisions have been made, but nonmission-critical contracts, in areas such as executive support and coaching, will be eliminated.

Booz Allen's Rozanski said the company is already talking to Trump officials about how the government can deploy its technology on everything from space defenses to using AI to reduce fraud.

"We are not in the business of writing PowerPoints. We're in the business of writing code and of using commercial technology to create real results in the federal government," he said.

The GSA memo also asks that agencies justify consulting contracts by explaining why they are "mission critical" and provide substantive technical support. The exact impact of the review remains to be seen, said Stan Soloway, CEO of the consulting firm Celero Strategies, and the former head of the largest trade association of government-service contractors.

"There's a lot of questions," Soloway said.

It is unclear what "mission critical" means, and how it might align with existing agency budgets and goals, said Soloway, a former defense official under President Bill Clinton. Executives within firms are trying to meet with Trump administration officials or explain the value of their services, but see the potential cuts as a risk.

"A lot of these companies are doing serious technology work," Soloway said. "Now they don't even know what the next six months or year might hold. Nothing disturbs a market more than uncertainty."

Write to Chip Cutter at chip.cutter@wsj.com