By Chip Cutter
The Trump administration is looking to cut federal contracts. Few companies stand as exposed as Booz Allen Hamilton BAH -2.69%decrease; red down pointing triangle.
The venerable Washington, D.C., area firm works on projects across the U.S. government. It operates a website visitors use to reserve campsites at national parks. It is modernizing healthcare records for veterans, beefing up technology at the Federal Bureau of Investigation, and rolling out a suite of artificial-intelligence and cybersecurity tools across the Department of Defense and other federal agencies.
A memo sent this week from Stephen Ehikian, the acting administrator of the General Services Administration, calls on procurement officials at federal agencies to list and justify consulting contracts from 10 companies—including Booz Allen, Accenture, Deloitte and International Business Machines—that the agencies intend to keep. The responses are due March 7.
Booz Allen generates 98% of its roughly $11 billion in annual revenue from contracts in which the end client is a U.S. government agency or department. It has told investors that it sees the U.S. government as the world’s largest consumer of management consulting and technology services. Since the election of President Trump in November, its stock is down about 30%.
In the memo, viewed by The Wall Street Journal, Ehikian said the GSA has identified that the 10 highest-paid consulting firms are set to receive more than $65 billion in fees in 2025 and future years. “This needs to, and must, change,” Ehikian wrote, bolding the sentence for emphasis.
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