The Trump administration is expanding its attack on government spending on advisers after Elon Musk led a drive to cut costs that sparked dozens of contracts and threatened hundreds of people.
Ten of the largest U.S. advisers were told that it would make sense that they had to provide billions of dollars in ongoing projects to the federal government until Friday, officials told the Financial Times that they plan to expand the number of target companies in the coming weeks.
An FT analysis of federal data shows that more than 30 contracts held by these 10 consultants have been completely or partially cancelled. The largest is the umbrella contract for the IRS IT service led by Deloitte, worth up to $1.9 billion.
“Only services are provided with proven return on investment for taxpayers,” said Josh Gruenbaum, commissioner of the Federal Acquisition Bureau.
“If any business with $36TN debt is running every year in the current interest rate environment, if they do not perform an audit of all cash outflows one by one, it will be seriously irresponsible.”
The 10 consultants initially targeted by the government included Deloitte, Accenture, Booz Allen Hamilton, Guide and IBM. FT’s analysis covers contracts held by these companies, which, according to federal returns, have become the subject of “termination” of notices “for convenience”.
The cancellations have been higher than the total in the recent year in the six weeks since Donald Trump’s inauguration, highlighting the speed at which Musk’s so-called Department of Administration Efficiency (DOGE) is trying to cut spending.
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The contracts are held by a variety of federal entities, including Immigration and Customs Enforcement, the Department of Defense, the Social Security Bureau, and the U.S. Patent and Trademark Office. In five cases, the cancellation was clearly related to the White House directive. Axe Diversity Plan.
Booz Allen Hamilton and the Federal Acquisition Services contract has been partially terminated “compliance with diversity, equity and inclusion, accessibility (DEI) executive orders”, according to a document.
The potential costs of the action contractor are not clear, especially since some cancellations may prove to be partial and may recreate certain contracts in some form in the future. In terms of IRS contracts, the $1.9 billion figure is the upper limit of expenditures, rather than projecting expenses, which Deloitte or other contractors have not yet made forecasts for.
The remaining subcontracts concluded (mainly under the larger “Blanket Purchase Agreement”) were listed as worth up to $256 million, of which $143 million had been cashed out.
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According to a senior General Services Administration official, executives of some targeted companies defended the advisory program with Trump administration staff, “other meetings will continue in the coming weeks.”
The official said the government expects to expand the list after the initial review, adding: “GSA wants companies to take this seriously. It is unrealistic to say that every contract is crucial. Projects supporting mission-critical functions may stay and may deepen, but are good and reasonable for governments and taxpayers.”
The Department of Defense is reviewing the consulting contract and conducting it before the April deadline.
Industry analysts say the comments are on top of mass shootings in certain sectors, and a series of executive orders to reverse the Biden-era plan has caused widespread confusion.
“People just don’t know what’s going on,” said Fiona Czerniawska, CEO of the research group Source Global. “Even if those who haven’t cancelled the contract are worried that the government part of their efforts is ‘Doge’, so they may not have the money to get the job done.”
Source Global is expected to cut its forecast for management consulting revenues in the U.S. public sector, which accounts for about 6% of the U.S. market, totaling $6 billion last year.
It forecasts growth rate of 1% this year, up to 3% in 2026, but now expects revenue in 2025 to be “flat” in 2025 as existing contracts have weakened and are down next year. It said that given the high uncertainty, the numbers are temporary.
The figures do not include IT system integration and development efforts, although the Trump administration said that this is not the focus of this week’s review process, although some analysts are concerned that the projects may also be affected.
“Companies don’t know what’s on the chopping block, or what kind of consulting is constituted by definition, so they don’t know where to focus,” said John Cacucis, senior analyst at Technology Business Research.
Doge has been orchestrating cost-cutting measures across the government, including mass shootings by federal workers, freezing aid programs and eliminating agency functions in ways that critics allegedly are accidental and blind to the consequences.
“In an ideal world, we will see a decrease in consulting shows and an increase in hiring of responsible civil servants to replace them,” said Benjamin Brunjes, associate professor at the University of Washington. “This won’t happen, so the result will be understaffing, loss of institutional knowledge and failure to provide many essential public services.”
Some consulting industry executives expressed optimism that there may be lucrative opportunities for outsourcing government services or implementing new IT after the initial phase of the Doge strategy is completed, thus improving efficiency.
Earlier this week, a government agency, the Department of Veterans Affairs, said it had completed a review of its nearly 200,000 professional service contracts and would cancel 585 non-critical or duplicate contracts, which represents “less than 1% of the VA contracts currently available in about 90,000 contracts.”
News in Virginia has led to a rally of lowered stocks by listed government contractors, several of which rose more than 4% when they fell 1.2% on Tuesday.
The department will still drop by more than a third since the November presidential election.
“We don’t want to let anyone go bankrupt,” said senior GSA officials. “But they need to be candid when analyzing their value in ROI.”
