In the weeks following President Donald Trump’s inauguration, contracts providing services related to Diversity, Equity, and Inclusion (DEIA) and renewable energy were the first to be canceled by the White House’s Office of Management and Budget (DOGE). Since then, the government has been scrutinizing IT and digital services, with cuts in recent weeks. These developments signal a major realignment in how the federal government wants to work with consultants.
The Data Tells the Story
Business Insider analyzed the data available on the White House DOGE office’s website to understand two key aspects: what services DOGE deems a waste of money and what the government has been paying consultants to do. The analysis revealed a trend of cuts to blanket purchase agreements, which enable the government to easily purchase recurring products.
- General Dynamics was responsible for the technical management and integration of pivot IT infrastructure services to the Department of Education, with an estimated savings of $69.1 million.
- Leidos held a contract to provide IT support services to the Department of Health and Human Services, which aimed to improve the government’s capabilities to speed research that can improve the health of Americans, with an estimated savings of $58.9 million.
- Booz Allen Hamilton was contracted to provide business operations support to the Food and Drug Administration (FDA), with $308,469 of services cut from a blanket purchase agreement worth $660,000.
- Guidehouse was contracted to provide DEI website support to the Department of Commerce, with an estimated savings of $400,000 from a $1.2 million contract.
- Deloitte was contracted to provide staffing support for financial reporting at the Export-Import Bank of the US, with $1.4 million saved from changes to the contract.
The Re-architecture of Services
According to Michael Mische, a former partner at KPMG and professor at USC’s Marshall School, the government’s approach to improving and automating federal processes has been to follow the easiest path without addressing the underlying systems. Mische said, “The process doesn’t change, the organization doesn’t change, the service outcomes don’t change. But yet we’ve spent hundreds of billions of dollars doing it.”
He added that the government wants to overhaul how those services are delivered and prepare for more advanced technologies, eliminating the need for so many individual service contracts. Mische predicted that there will be a greater emphasis on outcomes, with fee-for-performance arrangements and measurable metrics for consulting services introduced.
“It’s not about the tollpath you’re on, it’s about creating a new freeway,” Mische said, emphasizing the need for a more design-driven approach to business outcomes.
The Five Consultancies Under Scrutiny
Ten of the federal government’s highest-paid consultancies are under particular scrutiny, and Business Insider’s analysis focused on their contracts. The list includes Deloitte, Accenture, and Booz Allen Hamilton. Of the 10 firms, Deloitte has had the highest number of contracts cut or modified so far.
The Shift Toward a Commercial, Value-Driven Approach
Mische said that the government’s attitude will be, “Show me what you did and show me what I got.” He predicted that fee-for-performance arrangements and measurable metrics for consulting services will likely be introduced. This shift toward a commercial, value-driven approach will enable the government to better assess the value of services provided by consultants.
The Need for Design for Business Outcomes
Mische emphasized the need for a design-driven approach to business outcomes, rather than simply automating the existing tollpath. He said, “What I think we’re going to see under this administration is a much greater emphasis on design for business outcomes. Not automate the tollpath that you’re on, but create a new freeway.”
Conclusion
The data shows that the government is undergoing a significant transformation in its approach to consulting services. The cuts to blanket purchase agreements, IT and digital services, and contracts related to DEIA and renewable energy demonstrate a realignment in how the federal government wants to work with consultants. As the government moves forward with a more commercial, value-driven approach, it is essential to recognize the need for design for business outcomes. By doing so, the government can create a more efficient and effective system for delivering services.
