Will Musk Cut Consulting’s Government Cash?
The U.S. government spends $18B annually on consulting contracts, with Booz Allen Hamilton securing roughly half of that total.
Consulting firms have a long-standing tradition of profiting from government contracts.
- In 1977, Booz Allen Hamilton received $320,000 (equivalent to $1.7 million today) from the Department of Agriculture to determine how many chickens inspectors should examine per minute.
- Since 2019, Accenture has received $700 million from the Department of Education to develop and manage a website and mobile app for student aid.
- Since 2022, BCG has earned $380 million from the Defense Health Agency through its Workforce 3.0 initiative, which supports medical care for the armed forces.
But with Elon Musk’s Department of Government Efficiency (DOGE) aiming to slash government spending by $2T, some have raised concerns that Booz Allen Hamilton, Accenture, and their competitors might be on the chopping block.
The concern appears legitimate. Musk, his allies, and consultants come from very different worlds. In 2020, Elon Musk famously criticized the overabundance of M.B.A.s, claiming they "are polluting companies' ability to think creatively and give customers what they really want." Consulting is still a top destination for business graduates, with about one-third of M.B.A.s from top schools entering the field. Peter Thiel, co-founder of Palantir and a longtime friend of Musk, has gone even further, calling McKinsey and traditional consulting a “total racket…it’s just all fake.”
With DOGE on the hunt, consultants may soon have to learn a new trick.
