Abstract Bullets:
• The US administration is making clear its purpose to enhance authorities efficacy and slash bills throughout the board.
• In IT, the Common Companies Administration (GSA) singled out its 10 largest consulting companions, demanding they justify their contracting worth to cut back the present $65 billion public sector spend.
Change is inevitable with administration transitions, however the sharp pendulum swings the Trump US presidency introduced with it have been swift and dramatic. There is no such thing as a shock that cuts have been coming, however the shock is the velocity and scale at which it’s taking place, and the profound affect these strikes are having on IT particularly.
In February 2025, the GSA, i.e., the company that supervises authorities procurement, issued a memo directed to high procurement officers in all federal businesses requiring them to “defend the spend’ on contracts with the ten consulting corporations that symbolize the most important initiatives from a monetary perspective. The GSA is placing the onus on businesses to exhibit how these engagements are important to serving to the federal authorities ship on its mission. These corporations embody Accenture, Booz Allen Hamilton, CGI, Deloitte, Common Dynamics, Guidehouse, Hill Mission Applied sciences, IBM, Common Dynamics, Leidos, and Science Functions Worldwide Corp. (SAIC).
The Wall Road Journal reported the administration drafted a brand new letter to the consulting corporations to stipulate pricing and provide up areas the place prices will be lowered of their present engagements with federal businesses. Responses to the letter are due by March 31, 2025.
Consulting corporations are already feeling the ache. In an earnings name with Wall Road analysts, Accenture Chairman and CEO Julie Candy famous that through the administration course of to enhance authorities efficiencies, “many new procurement actions have slowed, which is negatively impacting our gross sales and income.” Public sector gross sales rely for about 8% of Accenture’s world revenues.
Candy added, “the GSA’s steerage is ‘to terminate contracts that aren’t deemed mission-critical by the related federal businesses.’ Whereas we proceed to imagine our work for federal shoppers is mission-critical, we anticipate ongoing uncertainty as the federal government’s priorities evolve and these assessments unfold.”
US President Donald Trump signed an govt order on March 20, 2025 consolidating the IT procurement course of below the GSA. The GSA will take over as the manager agent of all government-wide acquisition contracts (GWACs) for IT. The purpose is to have one company that’s already set as much as handle the procurement course of oversee most IT contracts as a result of it “will get rid of waste and duplication, whereas enabling businesses to deal with their core mission of delivering the absolute best providers for the American individuals.”
The manager order provides the GSA the choice of deferring or declining its function as govt administrator for GWAC contracts when it isn’t in one of the best curiosity of the person mission. The Workplace of Administration and Finances (OMB) will advise businesses within the subsequent two weeks as to the way to transfer ahead.
All this comes at a time of turbulence within the US within the midst of tens of hundreds of federal probationary workers dropping their positions. Particular departments are taking the proverbial, or in case you are Senior Advisor to the President Elon Musk literal, chainsaw to their staffing rolls. The Division of Veterans Affairs has plans to chop its workforce by 80,000. The Division of Training let go roughly half of its workers of 4,133.
Time will inform what the web impact of those actions will probably be. Within the interim, the rollercoaster of change may have a variety of federal staff and IT corporations hanging tight onto the rail.
