It’s not looking good for the government consulting business, Deloitte bros. We’ve seen hints of this floating around for the last week or so but this Breaking Defense article and the memo included in its entirety within it (embedded below) make it pretty clear that removing pronouns from email signatures isn’t going to be enough to save all those fed contracts.
In “DoD reviewing ‘non-essential’ consultancy contracts for termination,” BD says:
The Defense Department has ordered all acquisition shops to review consulting service contracts to determine whether they are essential to Trump administration priorities, and terminate those deemed not to fit that bill.
“To ensure we are accountable for every dollar we spend and that we are aligned with the President of the United States’ America First priorities and Secretary of Defense [Pete] Hegseth’s direction, Component heads will conduct a comprehensive review and validation of existing contracts for consulting services,” states the Feb. 18 memo memo signed by Steven Morani, who is performing the duties of DoD’s undersecretary for acquisition and sustainment.
The memo mandates an assessment of “the essentiality of contracts … for the purpose of terminating or descoping contracts for activities that are not essential for the Department to fulfill its statutory purposes.”
As we mentioned in Ding Dong Diversity is Dead at Deloitte on February 11, Deloitte was the #14 federal government contractor in 2024 with $3.5 billion in contracts, almost 11 percent of Deloitte US revenue of $33 billion. EY is #58 with $547 million, KPMG #69 (nice) with a respectable $461 million [source]. PwC doesn’t make the top 100.
Combining Deloitte, EY, and KPMG’s fed contracts for 2024 that’s $4,547,845,000. With consulting business as dry as it’s been, none of them can afford to take a big hit to revenue.
For the purposes of this article we’ve focused on Deloitte since they’ve got the most to lose should DOD departments be unable to justify paying them $516.59 million a year (15.81% of Deloitte’s total fed contracts in 2024). Deloitte’s #1 awarding agency is General Services Administration (GSA) with $572.73 million (17.53% of their total).
Check out this graph of historical awards from USASpending, a government source of transparent data that outlines what they’re paying to whom. Deloitte Consulting went from $233.4 million in 2008 to more than $3 billion in 2024:
Oh and there’s also this related item:
We found nearly $2 billion in @DeptVetAffairs contracts that we’ll be canceling so we can redirect the funds back to Veterans health care and benefits.
— VA Secretary Doug Collins (@SecVetAffairs) February 25, 2025
No more paying consultants to do things like make Power Point slides and write meeting minutes! pic.twitter.com/z1gv3PKhfA
Maybe nothing happens and departments can sufficiently justify every penny paid out to private sector contractors like Deloitte. After all, nothing ever happens.
Update: Some more news coming from Federal News Network for your reading pleasure: GSA tells agencies to target top 10 consulting firms for cuts
The General Services Administration is making a second, more direct push to strongly encourage agencies to cut “nonessential” consulting contracts by March 7. And this time, it’s telling agencies to target contractors they believe agencies are spending the most with.
“Based on available procurement data, we have identified the 10 highest paid consulting firms listed below are set to receive over $65 billion in fees in 2025 and future years. This needs to, and must, change,” wrote Stephen Ehikian, acting GSA administrator.
Deloitte Consulting is the only Big 4 firm on the list.
I read this article and I don’t see why there should be any particular focus on Deloitte other than they got a lot of revenues. If we knew the contracts that are in place with Deloitte and other accounting firms that would be interesting. Speculation, but really no speculation here.
It says in a quote that they will no longer be paid to make spreadsheets and keep minutes at meetings. Guess you didn’t read it that closely.
We need Stephen Chipman to note how DYNAMIC it was of GT to sell their government business 3 years ago
Deloitte overcharged Cyber Command for months just to tell it what it already suspected at the outset. A ridiculous, time-honored model. They deserve to sink.