We’re back with a follow-on analysis of how DOGE continues to impact the GOVCON industry through contract terminations and partial cancellations. In our previous blog, we provided insight into macro environmental trends, such as the typical service areas affected and the agencies that have observed the most contract terminations.
In this blog, we will be analyzing the specific GOVCON firms that have been most impacted and what that means for the competitive landscape going forward.
Note this blog utilizes data from terminated or partially terminated contracts as reported by G2Xchange in May 2025.
The FedSavvy Strategies Takeaway
- Federal agencies were recently instructed by the U.S. General Services Administration (GSA) to target programs with specific contractors they believe the agencies are spending the most with. This targeting list includes looking at programs with traditional consulting firms like Accenture Federal Services, Booz Allen Hamilton, Deloitte, and Guidehouse, as well as other large systems integrators like GDIT, HII Mission Technologies, IBM, Leidos, and SAIC.
- Within this list, Deloitte, Booz Allen Hamilton, Guidehouse, and IBM have been impacted most severely by contract terminations.
- In response, some of these firms have recently offered to terminate existing contracts, reduce the scope of their work, or offer credits or free AI services, likely to provide more control over which of their more lucrative programs continue to be contracted externally by federal agencies.
- Federal agencies are cutting back on these consulting-heavy contracts to meet the Trump Administration’s goals of leaner operations and internal modernization efforts.
- Although the stated focus of these terminations is on advisory and consulting support, even mission-critical platforms like the Internal Revenue Service’s (IRS) Modernized e-File and support services for U.S. Immigration and Customs Enforcement (ICE) operations have been targeted.
- While we can expect these functions to continue to exist, it is likely that DOGE views these support services as unnecessarily contracted out to external vendors and will likely be performed directly by federal agencies.
- These terminations of advisory contracts point toward the government’s shift toward insourcing and building internal capabilities – particularly in areas like business process improvement, organizational effectiveness, and IT service delivery support – through the civilian workforce.
- These terminated contracts go beyond advisory support, showing a strong focus on near-term and observable outcomes.
- Given the current actions taken by DOGE and the GSA, we can expect this practice to continue as it has again in May 2025, with a new round of targeted businesses.
Round 1: Targeting the First 10 Businesses
In February 2025, the GSA announced it was making a more direct push to strongly encourage federal agencies to cut “nonessential” consulting contracts by March 7. GSA specifically told agencies to target contractors they believe agencies are spending the most with. The 10 firms GSA focused on include:
- Accenture Federal Services
- Booz Allen Hamilton
- CGI Federal
- Deloitte Consulting
- General Dynamics IT
- Guidehouse
- HII Mission Technologies
- IBM
- Leidos
- SAIC
Figure 1 – Number and total contract value of contracts terminated for the top government contractors targeted by GSA. Source: G2Xchange.
As depicted in the visuals above, Deloitte has been impacted the most by DOGE contract terminations, by both the number and value of programs. While most terminated contracts have an average value of $9 million, this includes a $69 million ceiling value contract with ICE’s Enforcement and Removal Operations (ERO), under which Deloitte is providing support services in the areas of law enforcement systems and analysis. These services help inform ERO strategies and enhance their business processes. Although most contracts within ICE are being continued under the current administration, this program was likely targeted because it is both centered around support services (versus execution of operations) and held by a consulting firm.
Programs held by Guidehouse were also heavily targeted, which includes a $40 million ceiling value contract to provide organizational programmatic support to the Centers for Disease Control and Prevention’s (CDC) Chief Information Officer division through the development of products to improve organizational effectiveness. This included a planning tool mapping significant actions to manage associated inputs, outputs, and owners to enhance accountability and management.
GDIT appears close to the top of this list in terms of total contract ceiling value terminations. Primarily, this stems from the cancellation of the nearly $400 million ceiling value U.S. Department of Veterans Affairs’ (VA) File Conversion Services contract, under which GDIT provides managed services and artificial intelligence to digitally convert historical veteran records, automate data extraction of existing records, and process Official Military Personnel File requests in support of veteran benefits claims processing.
Although IBM is not typically viewed as a consulting firm, the company’s Modernized e-File (MeF) development contract with the IRS was terminated. This $230 million contract provided for the continued development of the platform, which is the IRS’s electronic filing system designed to improve the efficiency, accuracy, and security of tax return processing for individuals, businesses, and tax-exempt organizations.
Other businesses that have been targeted heavily by DOGE include Accenture Federal Services and Booz Allen Hamilton, both of which have seen over $200 million in terminated contracts. In addition to these terminated contracts within the federal civilian market, the U.S. Department of Defense (DOD) recently announced it found $4 billion in savings by cutting consulting and non-essential contracts with Accenture, Booz Allen Hamilton, Deloitte, and others. This includes Accenture’s $1.4 billion U.S. Department of the Air Force contract to act as a managed service provider for cloud account services under a Cloud One follow-on task order.
In April 2025, seven of the 10 largest consulting firms to the government offered up to $20 billion in savings by proposing to either terminate existing contracts or reduce the scope of their work within federal agencies. At least two firms offered 7% to 10% discounts on their labor costs within existing contracts, while others provided credit proposals of $100 million toward their work. One other firm offered free deployment of AI agents within the government to make it easier for federal agencies to work together.
Overall, federal agencies are reassessing their contracted programs and cutting back on consulting-heavy contracts and non-core digital services to meet the Trump administration’s goals of leaner operations and internal modernization efforts. Currently, these efforts have begun by targeting known and prominent consulting companies operating across the government today.
Round 2: The Next 10 Businesses Targeted
In May 2025, GSA announced that a new set of 10 businesses would need to submit options for potential savings of their existing consulting contracts. This includes:
- ASGN Inc. (parent company of ECS Federal)
- Chemonics International
- FCN Inc.
- Iron Bow Technologies
- ManTech International Corporation
- Minburn Technology Group LLC
- Peraton
- Salient CRGT (now GovCIO)
- Smartronix LLC (now SMX)
- V3Gate LLC
Although the review of the second set of “consulting companies” has just begun, Chemonics International has been hit most significantly. This is unsurprising, as the company primarily served the U.S. Agency for International Development (USAID). Yet again, the broad use of contracting data has created a list of targeted businesses with minimal context of what the business actually does. It does not take much to understand that this continued focus on “consulting” contracts involves businesses that are really not consulting by nature. However, this is the target list, so let’s be aware of this practice.
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