Shares of consulting companies slip as Trump threatens to end contracts

Shares of several government consulting companies are in the spotlight on Wednesday after Trump’s administration threatens to terminate hundreds of billions of dollars’ worth of consulting contracts, after finding U.S. firms’ proposals for savings to be “insulting.” In a letter being sent to 10 large consulting groups this week, a copy of which was seen by the Financial Times, the US government accuses the firms of “faulty reasoning, financial obfuscations and gamesmanship” in their discussions with the administration, and threatens to “recompete” long-standing deals. Firms including Accenture (ACN), Deloitte, IBM (IBM) and Booz Allen Hamilton (BAH) were asked last month to identify savings in a “consultant spend review” launched by the General Services Administration, which helps co-ordinate government procurement. Other publicly traded companies that might be impacted by the news include CACI (CACI), Leidos (LDOS), SAIC (SAIC), and General Dynamics (GD). Shares of Booz Allen have dropped almost 1% to $106.09.