Pentagon to terminate $5.1B in IT contracts with Accenture, Deloitte

The people who care about these distinctions are mostly within those three groups. For the customers it's 'consulting'.

I would say that "Consulting" model as defined above is employed moreso (but not entirely) by Deloitte, but Accenture and Booz Allen have a higher percentage of on-site folks not at all engaged with internal IP building, sales, etc that amount to staff augmentation. As Booz Allen and Deloitte went after service contracts typically held by folks like Lockheed, GD, CSC, etc it was a race to the bottom for fees to grab as much land as possible, so there wasn't really any head room for people that could do both in the rate they pass through to the customer.

Furthermore, in the cleared space you're pretty much silo'd to places that grant clearances - so while you might build up some IP you can never actually leave that market because your credentials are too valuable.

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That made me chuckle, nicely written.

huh...til that Raya exists

Just work as hard as the pay Merritts. Works for me. Around 5 you get presence, at 100 you get superhuman performance.

>In a similar vein, I've some friends who worked at a hush hush defense facility. The vast majority of the people at the facility are hired through a contractor. The employees are unionized, have a pension, and when a new contractor wins the bid, they have to agree to keep the staff in their current positions.

Not defense, but my government contract works the same way. I'm on company number two, but I know people who have worked for 4 different companies, all while doing the same job on evolutions of the same contract. There are people who have done full careers working onsite for my agency without ever converting to be a civil servant.

> Citizens pay attention to the number of employees, and they get mad about it. You really don't want to be the one to cause citizens to angrily call elected officials if you're in an appointed government position.

This week, after witnessing the largest insider trading infraction in US history, many citizens barely noticed. I no longer believe citizens pay attention to news. They’re conditioned to feel outrage at whatever social media tells them to.

I know someone who wanted to move from government contractor to government employee. He was already a veteran, had a degree, few years of experience as a contractor, etc. it took an entire year from “okay we can give you a job” to him starting.

I worked at Raytheon in geointelligence services a long time ago and saw this happen and it wasn't a particular mystery why. Raytheon had acquired a smaller company decades back that handled all the ground processing for US spy satellite collections. This was a small group of like 50 people who'd been working in an extremely niche domain that was also classified and they'd been doing it for 20+ years each.

The government got angsty about being bilked by monopolies and started trying to mandate that contracts be split and awarded to different contractors. The first time they did this, they took the contract away from Raytheon and gave it to Lockheed, who probably felt the way the average reader of Hacker News feels, that surely this was a weekend project that five guys could do for a hundredth the price. It was not. Their solution completed the process of turning raw downlink data into human-legible imagery hundreds of times slower than Raytheon's. The government caved and gave the contract back to Raytheon.

A decade later, they overhauled the entire geoint enterprise to try and modernize it, bringing it to the cloud and using Kubernetes for everything, and did the same thing again. They gave the orchestration contract to Raytheon and the processing algorithms contract to Lockheed, with a rule saying the contracts can't go to the same company. Lockheed in this case just subbed the actual work back to Raytheon. The only way they could really do what the government wants, and have Lockheed employees working on this, is if they hired all the people who currently work for Raytheon, not out of any kind of nefarious underhandedness, but because these are legitimately the only people in the world who can do what they do at the level they do it.

That makes sense. An FTE costs 2x as much as a contractor to the government and the latter can be fired. I’m glad it is this way. Even DOGE is temporary.

As a computer scientist who worked as a research scientist i was paid more as a Federal Surfguard (beach lifeguard) than i was doing TS cleared work with the government. The GS scale is fundamental a broken wager. When I gradated college the government was willing to pay 75K for employment. I had offers from private industry as internships making more than that per hour. They were easily 15K off my next offer and that was only because I thought I would like defense in general where the pay is pulled lower because they do so much government contracting. After exiting the defense industry I was making what I was predicated to make in 20 years at the government in 3 years in private industry. Not counting stock options etc.

The disparity is extremely but to be honest I liked the idea of working for the government. There was a lot of drive to solve for the mission and smart people. But the level risk mitigation made working extremely difficult. The government impressive getting people to work as hard as they do and I respect it, they were a good employer but political offices severely shackle it from doing even better work. In wages yes but even in allowing experimentation, political appointments waste a ton of energy and time to. Its like selecting the worst person for the Job in a non meritocratic way and expecting things to run smoothly is a poor idea.

> They still don't generally need to use consultants. Even at the poor rates of pay in many government teams, there are still some decent technical staff who don't just chase the dollar. Bear in mind the salary standard is normal market, not FAANG/SV.

The stated policy of the current admin is to "traumatize" federal employees so the number of these people is likely dwindling fast. Burnout was already a problem before the current admin - if your efforts hit a bureaucratic brick wall one too many times that private sector job starts to look a lot more appealing.

Another reason why consultants are good in government is because of unions. I am generally pro-union, but a side effect of unions, at least in my experience, is that you will have a proportion of incompetent people who can not complete anything and you can not effectively get rid of them. Consultants who are clearly incompetent or even just not a good fit are much easier to get rid of.

Although the large consulting firms are also not great if they are just shipping software requirements overseas for cheap software dev labor, that also can be very ineffective. So many never ending government projects are a result of this. On the surface everything is competently managed (grant charts forever, with perfect org charts), but at the strategic level of actually getting it to work and on-time is lacking (because there are a ton of cautious "professional managers" who don't know how to actually ship.)

> there are still some decent technical staff who don't just chase the dollar

They are probably not chasing the job security either.

Not just that political reason - you can scale a workforce up and down much more quickly with them.

And that is one of the more charitable political reasons that exist. I'm guessing Dolette and the like didnt drop enough campaign contributions. Betting in a couple months Tesla is gonna get a big fat contract.

Only place this falls apart is that Accenture / Deloitte are really not sexy. Like being a federal employee at a similar pay scale would actually be more sexy. McKinsey/BCG maybe this makes sense.

The story for private equity is similar. How else do you get some high flying MBA to care about running a plumbing business?

Being paid better is quite sexy.

This is close to what I wrote myself, but the problem here isn't being able to fire people because they underperformed. The problem is what to do about temporary jobs that finish. They performed exactly as expected, maybe even exceeded expectations, but when the work is finished, you still need to get rid of the position, and they can't do that with permanent civil servants.

Promises made, promises kept.

Whether you support it or not, for government, that's really some incredible efficiency. almost 1/3 complete in 100 days

> One of my laments is that there is no automatic equivalent force in the government. Agencies grow and grow, projects grow and grow, all totally decoupled from whether they are achieving any progress whatsoever towards the agency's mission.

A good metaphor here is apoptosis / programmed cell death (https://en.wikipedia.org/wiki/Apoptosis)

> One of my laments is that there is no automatic equivalent force in the government. Agencies grow and grow, projects grow and grow, all totally decoupled from whether they are achieving any progress whatsoever towards the agency's mission.

There was. It's the GAO and the inspectors general of the agencies, both of which have been gutted by this administration.

> I'm not defending the specific actions of this administration (for which I simply don't know enough), but it is refreshing to see the government rummaging through its mess and cutting stuff that is irrational, corrupt, and not serving the mission.

LMAO, you're not defending the specific actions, but you know enough about the actions to know that they are "cutting stuff that is irrational". This is a defense of DOGE but with the "no, i'm NOT defending Musk" veneer that doesn't pass muster. You're giving this administration the benefit of the doubt and a large amount of good faith that they have not earned.

This deviated from the original topic, and I'm not following your metaphor flows. How does your post relate to consultants specifically? Is there an implication that consultants not part of the 'mess'?

You say "No automatic force... whether (the agencies) are achieving any progress)". Don't we have oversight agencies and committees? I'm not following your 'grow and grow'; can you provide evidence that all agencies just 'grow and grow' without achieving progress? If not all agencies, then be specific.

Also, what evidence is there of "stuff" that is "irrational, corrupt, and not serving the mission"? Which mission? What corruption? What evidence of this? Can you speak more specifically here?

Please provide evidence to claims so we can have an discussion around this.

No need for the scare quotes. The current federal budget is expanding, under the current administration.

Had they the slighest wish to shrink the debt, or at least not expand it further, tax cuts would have been out of the question until the budget allows for it.

Current budget is set to expand deficit spending due to tax cuts and certain spending increases, in spite of project cuts to social safety nets and entitlements.

> With any "normal" president (including Kamala Harris), the federal government would likely be expanding spending and gov't programs right now

Perhaps, and in such a case, the american economy would not be cratering like it has been lately, and americans would be suffering less, and america would be stronger on the international stage. In fact, all things considered, more spending would have been better for america than the current state of things.

> the debt is so huge that interest payments on the debt now eclipse the defense budget

There's always taxing the rich, but the plan by the american ruling elites in the republican party currently seems to be to increase the debt sky-high via tax cuts for rich americans, only partially paid for via increased taxes on non-rich americans, with the rest piled onto the american debt burden.

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Why should I care? It has no effect on me. That's between the shareholders and management. Government bloat comes out of my paycheck.

Why has nobody been prosecuted, then? Why was USAID's detailed budget website removed by the current administration? If crimes were being committed, why has there been no accountability?

I keep hearing about all this corruption, but nobody seems to be in jail about it.

tbf, unlike the US government employees selected on the basis of being sufficiently immune to reality to assert that Trump won the 2020 election in their "fidelity to the Dear Leader" tests, those who think that endorsement of such views is "deplorable" might have a point...

That's all true. Process and bureaucracy are guard rails, and guard rails limit change. So when the whole system is barrelling towards a cliff (default, hyperinflation, kinetic war), what should the leaders try and do?

It probably seems like I'm defending their actions, I genuinely don't know if their actions are correct and I'm not defending them. I'm just acknowledging it seems like many US institutions haven't been appropriately evolving, and now the US as a whole is between a rock and a hard place.

If I'm going to spend time thinking about these things (that I have virtually no control over), I would prefer to do it in a curious and mostly emotionally detached way.

Plus, many of the laws government has to follow are exactly about the process by which things are done. That is what helps ensure it is fair, effective, transparent, etc.

Well, years later the website is still operational and the company still seems functional after Musk cut 80+% of the staff, which to me is pretty mind blowing. I'd call that pretty successful. If I, as the end user, can't tell the difference between pre-80% and post-80% cut twitter then what value was that 80% bringing to the organization, exactly?

Are you basing your opinion on your own personal experience using twitter, or on what you've read or heard about it on other media platforms?

You're missing how IR35 actually reshaped the ecosystem - not just in terms of tax compliance, but in terms of who's allowed to profit from delivering services.

It's not about preventing companies from treating people like employees. In fact, post-IR35, it enabled exactly that - but with fewer rights. Now, individuals can still be engaged for long-term, full-time work, as long as they go through an umbrella company and give up both autonomy and the ability to run a business. The result is employment in all but name, with none of the legal protections, and often less pay due to umbrella fees and unreimbursed business costs.

You're also wrong to suggest that independents weren't competing with the likes of Accenture or Deloitte. In practice, they absolutely were - especially in the public sector. Individual consultants and small firms were frequently:

- Delivering the same work at lower cost and higher quality

- Auditing or overseeing work delivered by big firms

- Winning smaller-scale, high-trust engagements directly with departments that didn't need an army of suits and a 200-page PowerPoint.

This did threaten the margin-heavy model of large consultancies, and they did lobby for IR35 and the subsequent reforms to de-risk their position. What IR35 achieved was to push out small, agile operators by making them legally and commercially "difficult" to work with - not because they were "tax dodging", but because they lacked the compliance resources and political access to fight back.

Meanwhile, large firms were exempt from these concerns. They can place workers with clients indefinitely without IR35 scrutiny, because the worker is not the owner of the delivery company. That's the loophole. The exact same working pattern is treated as fine if the profit flows to Deloitte, and suspicious if it flows to a one-person or small, workers owned limited company.

This isn't about "6-month gigs needing umbrellas" - it's about eliminating small, independent service providers from public sector procurement pipelines. It's about monopolising access to taxpayer money. And calling that "ensuring proper employment classification" is naive at best, and disingenuous at worst.

IR35 didn't restore fairness. It restructured the market to favour large corporations and removed one of the few viable routes working professionals had to operate independently and build something of their own.

A counter point:

Salary should be decent, but I’m not wholly convinced it needs to be at “market rate.” By having reasonable rates but below “market” value, you are likely creating a selection bias for people who are in it for the mission more than they are in it for the money. I think that’s a good thing.

It’s like the idea that politicians should be allowed to trade stocks or else you won’t get the “best” talent. I’d argue I don’t want politicians whose primary motivation is financial gain.

Agreed. Many people I know who work in state government are always on or planning their next vacation, or in the middle of another home renovation, and lightly joke about their “work from home.”

It’s just incredibly clear that there is no inventive to actually perform, and combined with environments such as WFH that need to be outcomes-based, it starts just looking like a fairytale life paid for by other people.

This happens in the private sector as well, but tends to correct over time - hence big tech’s layoffs, especially of managers and nontechnical staff, after the excesses of 2021-2022.

I don’t think this is true of all state employees, but it seems to happen more with the educated professional class with more abstract work.

Not sure where you get your information. Many civil servants are motivated to do what is right for their country, civil service tends to draw mission-oriented people. People who are typically willing to go above and beyond to make things work.

Think about the teachers who buy classroom supplies out of their own meager paycheck because they want them for the lesson, and 'cost-cutting' means they don't have enough resources in the school.

Think of all the people at the CDC, or at NOAH, or similar.

In any large organization, and the Fed Government is > 2m employees, so it counts, you can easily find example of people who are driven and people who coast.

And actually, people are sacked in the fed if they don't make their numbers, or they are quietly sidelined.

Nothing says freedom like banning the right to strike. Which might work in the short term, but makes the strikes much, much more vicious when they do come.

Yes because if it’s one thing workers like is removing their bargaining power and relying solely on how future administrations feel about your job.

Yes, they do often have such clauses, which carry a lot of weight when they aren't ignored.

Yeah sadly I have a similar experience from my school. People going into consultancy were either people that just did software engineering to quickly move into a management position and make more money, or people that were not passionate about the domain or the students that under performed. We’d have consultancy agencies come advertise basically saying “don’t worry we have LOTS of positions open”.

> The whole conservative ideology for the past 40 years has been to make the government inefficient so it can complain about government inefficiencies.

People say things like this, but then have trouble explaining California, where the left has had a supermajority for almost as long.

The source is the person doing the cutting. Of course they're not going to say "We're cutting essential staff for no reason"

Breaking critical systems like SNAP, Medicare/Medicaid, weather forecasting and many many many other systems that people literally depend on for their being alive *kills* people.

Programmers that work on critical systems are actively trained to take into consideration every contingency to not increase the death rate of their systems, to the best of their abilities.

Aggressive, comprehensive and non-robust axing of systems when literal lives are on the line - especially when it's government systems and those lines maintain any semblance of some people's ability to literally be alive - touch and impact more lives than any single Boeing plane or NASA space shuttle's crash. They are even more critical than those systems - though not as flashy when they fail.

By whom?

And they got caught by the system already... You can't just snap your fingers, destroy the entire apparatus of academia and get it back again on a whim. It'd be a century or more to rebuild fully if you really did try to start over again.

The impulse to cheat is even exacerbated by thinner funding not fixed by it because you're pressed extremely hard to get results to justify the next grant, and your tenure board in 5 years, and there's basically no grant money for replication and no prestige at all.

Haven't you seen the documentary Inside Job covering the 2008 financial crisis? "Burning it all down and starting over" is a very immature and myopic perspective and cannot be taken seriously as a workable solution. The solution is to implement regulation that, very broadly here, enacts mechanisms to make private gain for public loss something incredibly difficult to do.

There need to be checks against people in positions of great wealth, power, and influence because people cannot be trusted to self-regulate and Do the Right Thing when large sums of money are on the table. "Self-determination of a conflict of interest is itself a conflict of interest."

[0] https://en.wikipedia.org/wiki/Inside_Job_(2010_film)

[1] https://www.youtube.com/watch?v=T2IaJwkqgPk

[2] https://www.bloomberg.com/news/articles/2025-02-05/white-hou...

> Burn it all down and start over again clean.

This approach has an abysmal track record historically and I expect history will repeat itself here. Burning complex systems down is many orders of magnitude easier than building them up, and much less fun for the people who like burning things down. So the predictable effect is that blunt wide-scale destruction almost always makes things worse.

Yes Academia and government could be vastly more efficient. Almost everyone agrees on that and a lot of work has been put into improving things. But doing that in a way that's net good requires patience and competence, traits the current people running the government openly disdain.

Don’t hate the player hate the game. Academia has been perforated with metric driven nonsense from administration at all levels of funding and the university. It is not possible to quantify how much work it takes to generate a new idea that will downstream benefit humanity. This metric driven academic reality has led to two outcomes. An over production of papers on every topic. And the reduction of research into predictable outcomes that cannot be considered science because it is trodding well worn paths knowing it will produce yet another paper. Meanwhile funding agencies, job rules and laws, etc. all incentivize hiring PhDs over all other kinds of positions because it’s usually rather impossible to create lots of forever tenure track professor and research scientist positions since no one has funding for the next 40 years of a persons career. It was wrong that they cheated and they should be removed but i understand why they did it.

So two people lied and you wanna get rid of the system that caught them?

Claudine Gay's political science and African-American studies research was funded by NIH?

> There is so much fake, useless research produced with NIH dollars.

You're going to need more that 2 examples (one of which has nothing to do with NIH) to substantiate this claim.

Have you been to the doctor recently? One of your loved ones?

See if you can find something important to your family in this chart: https://report.nih.gov/funding/categorical-spending#/

Take a look at what was funded recently.

Putting aside how you or your family has personally benefited from items on the list, please point out the "fake, useless research".

"Academia is all rotten! Here are my 2 cherry-picked examples!"

Of course, burning these institutions down and running them like businesses will work well. After all, we all know fraud doesn't happen in business, and if it did, the market would soon sort that out, right?

This ^ and uncertainty

If I had to break down how consulting contracts are actually priced, it'd be:

   - 50% work
   - 35% requirement ambiguity
   - 15% customer management overhead

Yep, the procurement process (and related) requires a lot be baked into pricing. I’d also be curious what the fully burdened rate of in-house staff is compared to consultants. I’ve seen situations in the gov (not DoD) where despite high consulting rates, the full cost of hiring was even higher per hour.

But I’m loath to defend the big firms. Generally, quality plus the ever push for expanding scope leaves a sensation of waste. The solution is just going to need more than simply tossing them out.

25% waste on single million is not bad. 25% waste on all millions spend is very bad... And that 25% is likely under estimated in many cases. Or at least some more from 75% is inefficiently used.

I admit probably not 25% of all millions is wasted. But even if that is half that would be 12.5% wasted... Or fourth 6.25%. Fixing of which would still be huge long term effect.

So my take is that this needs to be fixed on all levels and on all places.

What is waste in this context? Is it the delta from perfect efficiency? Is it working on things that have no value regardless of efficiency?

I worry that we’re not that good at measuring these things. And I suspect the measurement of waste is often considered waste.

Pay isn’t everything. Government civilian GS employees have an extremely generous benefits package and usually excellent job security. Contractors frequently take pay cuts to work directly as a government employee for these reasons.

Last I checked, there was a surplus of tech talent in the US who have been subject to layoffs.

Govt gives benefits and job security, at least till the next opportunity rises.

I was on a 6-month project with some body shop consultants. We were a small, boutique consultancy that outsourced work to a much larger body shop. They barely did any work, and what little work they did was some of the worst quality stuff I've seen in my life. They told us they had completed "phase 1" of a project. It didn't work at all. And we still paid them.

> Actual cuts may only amount to a few billion.

And that's assuming the cuts don't have any fiscally counterproductive knock-on effects. Which they certainly will.

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Won't even have to wait that long. Elon will be stepping down at the end of his special employee tenure in a month or two in which he expects to save $1T.

Deloitte and Accenture would be considered the worst US companies if Monsanto/Bayer and Nestlé didn’t exist. Their work is always waste.

They're not, they're saying that GP imagines genuine waste-saving will happen, when in fact it's more likely to be fabricated "waste" conjured up by Elmo and his army of teenagers.

Current budget appears to be (via https://taxfoundation.org/research/all/federal/trump-tax-cut... )

> $5.3 trillion in deficit-financed tax cuts (the combination of $3.8 trillion of tax cuts assumed to be “costless” under a current policy baseline plus $1.5 trillion in additional deficits permitted), deficit increases of $521 billion on defense and immigration spending, a minimum of $4 billion in spending cuts, and an increase in the debt limit of up to $5 trillion.

So savings plus new borrowing will be funded to tax cuts, which will likely prioritize those already on higher incomes, and corporations.

Because the amoral drive for extreme wealth doesn't stop at a certain level of wealth

Rich people get that way because they love money. Loving money means they want more and more and more, no matter how much they get.

> And to what end, aren't many of these people already extremely wealthy?

When's the last time you heard a billionaire say, "I've got enough money I don't need to get any more" before they're very old and looking to burnish their image with charity work?! If they were the kind of person to be ok with more money than they could spend in 10 lifetimes they wouldn't be billionaires in the first place, at least not multibillionaires.

Not totally bizarre given some actually bizarre stuff like trump & malania crypto coins or DJT.

Musk intervened at FAA to get a Verizon communications contract cancelled while quietly trying to get FAA to sign to a Starlink contract:

https://www.forbes.com/sites/alisondurkee/2025/03/13/elon-mu...

You do not become that, by quitting on the waver thin mint.

> And to what end, aren't many of these people already extremely wealthy?

I don't know, I really don't know. To this day I can't imagine the day I become a president of a big country I tell my citizens "BUY MY COINS AND THOSE OF MY WIFE!". It's difficult to imagine on so many levels. But yet this guy is doing it. So no conspiracy theory is too weird to at this point.

What do you mean?

It might be a small percentage of the pentagon’s budget. But it’s still $5.1bn of taxpayer money being reigned in here. It’s $13 per person in the country. You could do an awful lot of good with that kind of money - from space programs to science funding.

Those are surely the total contract sizes, not yearly billing.

Were these one-year contracts?

The size of the federal workforce has been remarkably stable for decades[1]. It hasn't dipped below 2.7 million since 1967 ad only recently cracked 3 million again.

[1] https://fred.stlouisfed.org/series/CES9091000001

Yes but do you really believe Deloitte isn’t showering them with bribes and bending the knee to keep these contracts?

It’s not about who bends and who doesn’t. They all will. Even Tim Cook who famously wears his politics on his sleeve has completely bent the knee to Trump.

Money talks.

no, in the US consultants are mostly just a backdoor for governments to hire actually competent people at payscales that are illegal for the government to use and with competitive interview processes that are also illegal for the government to use.

I have met plenty of fresh graduates who know more and are much more productive than older people.

Based on my personal experience and that of many others I know, that's about as wrong as one can get. A great many government workers are there to collect a paycheck and go home (just like many other people working for many other employers). Their commitment to 'the mission' hovers near zero.

Just ask them.

Where do people get these crazy ideas about government employees? There are some wonderful people in public service, but it's not some Wonkaland of saints who toil just to help others and do the right thing.

Both are there to collect a check. One can get fired for doing nothing and the other cant.

As someone who has worked in the federal government, alongside other federal workers and deloitte consultants, you would lose this bet undoubtedly.

"higher bar to entry" -> true civil service style testing for jobs is basically illegal in the feds and they have to give massive preferences to various interest groups.

Government organizations aren't very good at accounting for true inflation, so right now the salary + golden handcuffs combination is way lower than industry compensation, if you're competent. If you're not competent, and you're not doing anything, then you might as well stay.

Authentic frontier ignorance?

It's hard to track, because it's all nice websites with generic messages like "we make life better" and pictures with obligatory diversity faces. E.g. $4.5 billion here chemonics.com. Or $3 billion here devalt.org. Where did these money go? How can we measure the ROI?

USAID is a corrupt wasteful sinkhole, good riddance to it.

https://www.business-standard.com/world-news/pentagon-cuts-5...

"This latest announcement follows a March 20 declaration from Hegseth, where he detailed $580 million in cuts to various programmes, contracts, and grants. The overall reduction now amounts to nearly $6 billion as part of the Department of Government Efficiency (DOGE) initiative, which aims to streamline Pentagon expenditures and focus resources on warfighting capabilities."

Doesn't mean to say it's not related:

>> The move comes amid a broader push by the Trump administration to implement Department of Government Efficiency (DOGE) initiatives across federal agencies. [0]

[0] https://defensescoop.com/2025/04/11/hegseth-memo-dod-it-serv...

or: > https://www.theguardian.com/commentisfree/2025/mar/15/doge-p...