Politics

Massive Contractor Keeps Raking In Taxpayer Cash Despite Trump’s Pledge To Rein In Swampy Deals

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Booz Allen Hamilton, a major contractor that generates nearly all of its revenue from government deals, continues to rake in billions of taxpayer dollars despite the Trump administration’s vow to get federal contracting under control.

Since assuming office, the Trump administration has pledged to address inefficiencies and waste in government contracts, fueling speculation about a potential collapse of the government consulting industry. Nevertheless, Booz Allen Hamilton, which earns 98% of its annual revenue from government contracts, reported less than a 1% decrease in revenue this quarter compared to the same period last year.

The Virginia-based consulting firm reported $2.92 billion in revenue for the quarter ending June 30, marking only a slight dip from $2.94 billion in the same quarter of 2024. The company’s revenues appear to be essentially unaffected, at least for the time being, even after a highly-publicized effort by the Department of Government Efficiency (DOGE) to rein in federal contracting.

“In isolation, Booz Allen Hamilton’s stable revenues don’t mean much. But it does illustrate larger lessons about government reform,” Ryan Young, senior economist at the Competitive Enterprise Institute, told the Daily Caller News Foundation. “The first lesson is that there is an order of operations to reform, and DOGE did not follow it. The first step is to remove regulations. Only trim payroll after you’ve done that. DOGE got it backwards. They fired workers first. That just means fewer workers each have more work to do. That’s one reason why contractors like Booz Allen Hamilton didn’t take a hit. They still have just as much to do.”

In May, the Department of Defense (DOD), which accounts for the vast majority of government contracts, announced that it would cut $5.1 billion in contracts, in addition to the $580 million in cuts announced in March.

“The Defense Department has become very much over-reliant on management consultants and contractors,” said Defense Secretary Pete Hegseth while announcing the cuts. “We found that we likely have more contractors than we have civilian employees and many of them, those contractors, are making more money than our career senior executive employees.”

Booz Allen generated 47% of its 2024 revenue from defense-related contracts, according to its financial statements.

The contract cuts announced so far are only a small fraction of the $240 billion the government spent on service-related contracts in 2024.

President Donald Trump signed an executive order in February commencing a “transformation in Federal spending on contracts, grants, and loans to ensure Government spending is transparent and Government employees are accountable to the American public.” The General Services Administration (GSA), which oversees government contracting, then announced a review of tens of thousands of consulting agreements.

It remains unclear how many of those contracts have been terminated to date.

“We have been, and will continue to be, subject to these reviews, and we have had, and may in the future have, certain of our contracts impacted, reduced or canceled as a result of these reviews,” Booz Allen Hamilton said in its financial disclosure.

It added that the “unilateral right of the U.S. government to cancel multi-year contracts” or to terminate existing contracts has not had a “material negative effect on our ability to realize revenue,” although it may in the future.

While the effects of the Trump administration’s contract-cutting measures have not yet been reflected in the company’s bottom line, Booz Allen announced in May that it would be reducing its workforce by approximately 7%, or 2,500 jobs. At that time, only about 1% of its government contracts had been canceled.

Booz Allen Hamilton, the GSA and the White House did not respond to the DCNF’s request for comment.