Government agency slashes more consultant contracts it says will save taxpayers billions

The General Services Administration is entering its second phase of reviewing government contracts with some top consulting firms.

A GSA employee told FOX Business the agency has gone through the first round of companies, where the firms offered a total of $33B in savings with $8.9B in immediate savings, through terminations and restructuring of contracts to outcome-based deals, with industry-leading companies like Deloitte, Booz Allen Hamilton, Accenture Federal Services, IBM and others. However, the supply-side agency is determined to revamp how the U.S. government buys goods and services.

"In addition to delivering immediate cost savings for the taxpayer, GSA is focused on transforming how the government buys, not targeting individual companies," a GSA spokesperson said. "GSA has made progress building the framework with the first 10 firms and (is) quickly moving to the next tranches."

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GSA is taking a longer-term approach to this overhaul with the government by restructuring any future deals by making outcome-based contracts the "default" and "mandatory" structure for the future. The agency also wants to cap indirect spending from these firms, provide industry-wide flat rates for services and work more directly with original equipment manufacturers to acquire goods and services straight from the source.

In response to the work GSA is doing with some of these firms, advanced technology company Booz Allen shares its excitement about working with the agency. FOX Business has learned Booz Allen will specifically offer agentic AI to improve contracting efficiency in the GSA.

"Booz Allen is proud to work with GSA to transform government procurement using advanced technology and help create massive savings for the American taxpayer," Booz Allen CEO Horacio Rozanski said. "As committed partners, we are encouraged by the rapid progress GSA is making to deliver cost-effective solutions to decades-long challenges."

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On Monday, GSA sent a second round of letters to companies consisting of nine of the biggest firms in the country, asking them to review all federal contracts, identify waste and savings opportunities, detail spending and pricing structures and restructure all pricing, according to the letter FOX Business obtained.

The letter was sent to the following consulting companies: Salient CRGT, Peraton, Smartronix LLC, Minburn Technology Group LLC, Mantech International Corporation, FCN Inc., V3Gate LLC, ASGN Incorporated and Chemonics International. 

GSA instructed the companies to respond by May 16.

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This comes as GSA has notably joined forces with Elon Musk’s Department of Government Efficiency to cut waste, fraud and abuse.