The Defense Department, with an eye toward budget efficiency, has begun a review of all contracts for consulting services, according to a new memo from the Pentagon's acting acquisition chief.
“To ensure we are accountable for every dollar we spend and that we are aligned with the President of the United States’ America First priorities and Secretary of Defense Hegseth’s direction, Component heads will conduct a comprehensive review and validation of existing contracts for consulting services,” Steven Morani, the official performing the duties of the under secretary of defense for acquisition and sustainment wrote in a memo signed Feb. 18.
Each DOD component review, Morani said, will “assess the essentiality” of the consulting contracts “for the purpose of terminating or descoping” them if they are “are not essential for the department to fulfill its statutory purposes.”
The review comes as DOD is looking to make a massive realignment in spending over the next five fiscal years, seeking to cut about 8% of the budget annually and re-invest in areas deemed higher priorities. The target for FY-26 is $50 billion, with 17 areas being exempt from the review.
The federal government obligated more than $500 billion on contracts for consulting services between FY-19 and FY-23, with DOD accounting for 46% of that total, according to the Government Accountability Office.
In his memo, Morani said DOD will take a “phased approach,” with the first review focusing on contracts where a DOD contracting officer has placed a direct order against a General Services Administration contract vehicle for consulting services.
The second phase will review remaining non-GSA consulting service contracts.
“Components shall take action to terminate, descope or forego exercising options for requirements determined to be non-essential as a result of this review,” Morani said.
Any contracts “deemed as essential” will require “a short justification to continue the service, as endorsed by a General Officer/Senior Executive Service member who represents the requirement is valid,” Morani wrote.
Responses from DOD components on the GSA-related contracts are due back to the office of the principal director for defense pricing, contracting and acquisition policy by March 19 and on the non-GSA-related contracts by April 19.