‘Unimpressed’ GSA gives consulting firms new deadline in quest to terminate contracts
The General Services Administration is not happy with the top-10 consulting firms it asked back in February to self-identify contracts that could be terminated to save the federal government money, going as far as to call their efforts under the initiative “insulting.”
Josh Gruenbaum, commissioner of GSA’s Federal Acquisition Service, wrote in a letter to those 10 firms, viewed by FedScoop, that GSA and its contracting partners are “unanimously unimpressed” with the cost savings those contractors identified in the so-called “scorecards” they submitted after the agency called for the termination of government contracts with those top consultants.
As a result, the agency is calling on those firms to submit a second “waste review” by 5 p.m. ET on Friday with their proposals demonstrating how they can “lean into developing taxpayer friendly pricing” with “dramatic price reductions.”
“In good faith, and with high expectation, we offered firms the opportunity to join us in reducing wasteful spending and do their part in addressing the twin issues of the federal debt and deficit,” Gruenbaum wrote. “The efforts to propose meaningful cost savings were wholly insufficient, to the point of being insulting.”
The original letter from February identified the highest-paid consulting firms with the federal government, which are set to make “$65 billion in fees” in 2025 and beyond:
- Deloitte Consulting LLP
- Accenture Federal Services LLC
- General Dynamics IT
- Booz Allen Hamilton
- Leidos
- Guidehouse
- Hill Mission Technologies Corp.
- Science Applications International Corp.
- CGI Federal
- IBM
In the new letter, Gruenbaum puts the onus on federal contracting teams and the firms to immediately terminate any identified waste; conduct a second sweep for contracts that can be axed, beyond those expiring in the next six months or that are no longer active; and restructure contracts to be “outcome based” with a consideration for “shared savings.”
On top of those asks, Gruenbaum said the Trump administration expects a “credit” from these consulting firms going forward, given “the shocking increase in consulting spending that occurred during the Biden-Harris administration.”
“Your firm should proactively deliver credible credit proposals or discounts that appropriately reflect your unduly inflated [compound annual growth rate] of the past four years,” the FAS commissioner wrote.
Gruenbaum closes the letter by telling those firms that might have remaining doubts about this initiative: “[R]est assured that we are steadfast in our resolve to achieve dramatic cost savings from our consultant spending.”
“Consulting firms that do not think creatively, lean into developing taxpayer friendly pricing and provide dramatic cost reductions can expect to have their projects terminated and recompeted to competitors who are aligned with the Administration’s cost savings goals and have respect for the taxpayer’s hard earned dollars,” he wrote.
Madison Alder contributed to this article.
