Trump's Cost-Cutters Look to Curb Deloitte, Other FEMA Contracts
(Bloomberg) -- Federal cost-cutting initiatives pushed by President Donald Trump have turned their focus to the Federal Emergency Management Agency, where spending on consultants like Deloitte now faces scrutiny.
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Workers at the agency have been asked to provide by Tuesday evening plain-language explanations of contracts and designate which are 'non-essential' and should be terminated or reduced, according to documents seen by Bloomberg News. Contracts from dozens of consultants, including Guidehouse, Serco Group Plc., and the Cadmus Group are being reviewed, the documents state.
Trump has deputized Elon Musk, the world's richest person and CEO of Tesla Inc., to oversee cost savings through a White House office known as the Department of Government Efficiency. Musk's teams are looking to cull spending and root out programs opposed by the new administration, leaving government contractors on high-alert.
The directive at FEMA is based on a request from the administrator of the General Services Administration, the documents state. Stephen Ehikian, acting administrator of the agency, is a former Salesforce Inc. executive who has said he will work closely with DOGE.
Spokespeople for FEMA, Deloitte, Guidehouse, Serco and Cadmus didn't immediately respond to requests for comment.
Essential contracts are 'necessary for an agency to fulfill its statutory purpose,' while non-essential ones are those which 'merely generates a report, research, coaching, or an artifact,' the documents state.
In these cases, workers are asked to determine whether the entire contract must be terminated, or just be modified to strip out 'non-essential work.' They're also asked to estimate cost-savings, estimated date of completion and identify which worker determined whether the contract was essential.
FEMA, part of the Department of Homeland Security, is responsible for coordinating US disaster relief. As of Monday, its staff was responding to more than 100 major disasters across the nation, including the ongoing recovery from historic wildfires that devastated parts of Los Angeles last month.
Since taking office, Trump has publicly questioned FEMA's role. His attacks on the agency trace back to the 2024 campaign, when he criticized its response to Hurricane Helene in North Carolina, often citing rumors and falsehoods as evidence that FEMA was not doing enough to help survivors.
Earlier: Trump Floats States, Not FEMA, Handle Emergency Response
Trump has yet to nominate a FEMA administrator, instead tapping Cameron Hamilton, a former Navy SEAL without prior FEMA or large-scale disaster experience, to serve as the interim chief. Homeland Security Secretary Kristi Noem, who's leading a review of the agency, said on Sunday that she would recommend that Trump 'get rid of FEMA the way it exists today.'
FEMA uses contractors for everything from graphic information services to support for disaster response and installing trailers, according to Craig Fugate, who led FEMA under former President Barack Obama.
'If you got rid of all the contractors at FEMA and DHS the agency would not be able to function,' Fugate said in a phone interview.
At the same time, the use of contractors expanded as part of a 'shell game' to get rid of federal workers following former President Bill Clinton's administration efforts to reduce the size of government, Fugate added. In some cases contractors were working on procurement and reviewing other contractors, he said.
'It's fair game,' Fugate said. 'Any time that I tried to move away from contractors I would get called up to Congress to ask why I was cutting them. It will be interesting to see whose ox gets gored.'
--With assistance from Ari Natter.
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