GSA adds third set of companies to consulting contract review
Gettyimages.com / Teera Konakan
By
Ross Wilkers
The General Services Administration is asking six “traditional strategy consulting firms” for much of the same information it has previously asked of other companies: a breakdown of their federal businesses and ideas for savings.
The General Services Administration has added a third group of companies to its ongoing review of consulting contracts as part of the agency’s push to reduce federal spending on that front.
GSA has asked six more companies for detailed breakdowns of the federal contracts they hold and proposals on how to extract cost savings out of them, according to the letter dated Thursday and a copy of which was obtained by Washington Technology.
WT understands the newest round of recipients includes AlixPartners, Alvarez & Marshal Federal, Boston Consulting Group, Ernst & Young, FTI Consulting and McKinsey & Co. GSA’s letter identifies these companies as “traditional strategy consulting firms” and gives them a July 11 deadline to submit their reports.
“Our objective is to critically evaluate which engagements deliver genuine value and demonstrable returns to the American taxpayer, and therefore merit external support, and which should be internalized to ensure we are responsible stewards of taxpayer dollars and avoid unnecessary spending,” wrote Josh Gruenbaum, commissioner of GSA’s Federal Acquisition Service. “In keeping with this Administration's laser focus on fiscal responsibility, our baseline presumption is that most, if not all, of these contracted services are not core to agency missions.”
The language of these new letters is similar to others GSA has sent to consulting firms and technology product resellers, including a request for the information to be presented in plain language and for pricing restructures such as a shift to more outcome-based contracts.
“Essential continuing contracts must transition to outcome-based pricing tied to quantifiable deliverables. Consider shared-savings models where contractors demonstrate ‘skin in the game’,” Gruenbaum wrote in the newest letter. “Describe your plans and provide justification for any contracts where you believe outcome-based pricing is not feasible.”
Gruenbaum’s letter estimates GSA’s review of consulting contracts has resulted in savings of $23.3 billion in multi-year awards through terminations.
The Wall Street Journal first reported on the letter.