The Pentagon Gave $350 Million in Contracts to a Firm Closely Tied to a Senior Defense Department Official
· ProPublica
Among a cadre of Wall Street executives brought into the Pentagon during President Donald Trump’s second term, George K. Kollitides II has emerged as a powerbroker with a broad mandate to improve procurement of weapons and critical minerals.
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The longtime partner at the private equity firm Alvarez & Marsal Capital has framed his tour of duty in government as a service to the country. But the work he’s leading has also been a boon to his old friends in the private sector, government procurement records show.
In April, months after Kollitides had started work at the Pentagon, he was listed on a securities filing as continuing to work for his old company as a senior adviser. Two months later, the Defense Department finalized a $281 million no-bid consulting contract with an affiliate firm, Alvarez & Marsal Federal, to advise Kollitides’ new Pentagon office, the records show.
That contract, large for consulting work even by Defense Department standards, is the second in a pair of deals that since December have awarded almost $350 million in military spending to the firm — about five times more than Alvarez & Marsal entities had received from all U.S. agencies combined in the two decades before Trump returned to office, according to federal spending data. Both of those contracts have been for work connected to Pentagon offices where Kollitides is the head or has a senior role.
The deals remain shrouded in secrecy, records show, because they were signed under an unusual contracting method the Defense Department uses to fund experimental weapons — work A&M has never claimed to do. They have begun to send unprecedented sums of taxpayer money to a company that boasts helping government agencies create a “customer-centric culture” and that is deeply intertwined with the private equity firm where Kollitides was a partner for almost 10 years. The two partner firms tag-team investment deals and share back-office support, company documents and federal filings show.
Kollitides was still working with A&M Capital when the deals were signed. It’s unclear if he will benefit financially from the windfall of military spending on A&M consulting. His employment at the Pentagon is under a special classification that allows him to keep his financial disclosures confidential.
Ethics experts said it’s generally illegal for executive branch officials to play a role in awarding contracts that would have a direct impact on their own finances, unless they were granted a waiver.
“It looks way too cozy to be legitimate. I think taxpayers should be appalled,” said Virginia Canter, a former federal government ethics lawyer. “There are a million consulting firms in D.C. and New York. Why would you sole source this contract? They’re not sending replacement parts for a ship that is sinking.”
After ProPublica sent questions to the Pentagon, Kollitides and both A&M entities early this week, A&M Capital said Kollitides had just stopped working there days earlier.
In a statement, A&M Capital said it is a “separately capitalized and separately managed firm from the Alvarez & Marsal consulting business” and its “management and employees have no involvement in the day-to-day operations of the consulting business, and vice versa.” The firm said that none of Kollitides’ work for it related to the “defense industry, the Department of War or Mr. Kollitides’ government service.”
The Alvarez & Marsal consulting business did not answer any of ProPublica’s questions, including how it became aware of the possibility that it could seek the $281 million no-bid contract and what services it is providing to Kollitides’ Pentagon team. The Wall Street Journal on Thursday reported the existence of some of the Alvarez & Marsal contracting.
“We are proud to serve clients across all industries, and all levels of government,” the company said in a statement. “The common denominator is always the same: we help solve difficult problems.”
“It looks way too cozy to be legitimate. I think taxpayers should be appalled.”
Virginia Canter, former federal government ethics lawyer
Kollitides did not respond to questions about whether he played a role in A&M securing contracts to work for his office, but a Pentagon spokesperson replied for the department and on Kollitides’ behalf saying they both followed all applicable rules.
“The Department of War maintains a rigorous, multi-layered ethics framework that includes financial disclosure reviews, divestitures where appropriate, and screening to prevent conflicts of interest,” Deputy Pentagon Press Secretary Jacob Bliss wrote in an email. Kollitides, he added, “is in full compliance with all ethical laws and regulations. Any claims otherwise are false.”
There is widespread bipartisan agreement that the Pentagon’s procurement systems are in need of radical reform and private-sector know-how could help the country better secure supply lines and accelerate the development of new weapons to ensure the military is prepared to fight future wars.
But current and former defense officials say the massive spending for connected consultants is a reflection of a changed Defense Department under Trump. They say a clubby and politicized culture has taken hold in a wing of the Pentagon controlled by Kollitides and other former Wall Street executives recruited by Steve Feinberg, the billionaire private-equity titan who is now the deputy defense secretary. It’s an operation, they say, that favors people and companies that have close ties to the administration.
This year, ProPublica reported that the Office of Strategic Capital, a unit at the Pentagon that Kollitides helps lead, granted a small North Carolina startup linked to Donald Trump Jr. a $620 million loan after a top aide to the president intervened on the company’s behalf. A group of Democratic lawmakers accused the office of “a staggering level of corruption and influence peddling.”
ProPublica also reported that the same Pentagon unit was considering a loan to Unusual Machines, a second company connected to the president’s son. A defense official told ProPublica recently that the unit is now in the late stages of a $220 million loan for the Florida drone parts maker, where Trump Jr. sits on the advisory board and was granted a stake.
The Pentagon did not respond to a question about the advancing loan process for Unusual Machines and if Trump Jr.’s connections were playing a part. After the earlier loan to a Trump-connected company, the Pentagon said “no company receives preferential treatment” and “political connections play absolutely no role in the Department’s funding decisions.” Pentagon Press Secretary Kingsley Wilson pushed back on criticism, saying the Defense Department is conducting extensive due diligence on potential lending.
That Pentagon lending unit was launched during the Biden administration with an open application process for interested companies. Current and former officials and people who have interacted with the office say Kollitides and other leaders now rely more on their own personal networks to choose companies to fund — as well as the consultants to vet those deals.
Multiple Pentagon Hats
That reliance on personal networks is how Kollitides got to the Pentagon.
Feinberg first hired Kollitides more than two decades ago.
Then a rising private-equity star who had graduated from Columbia Business School, Kollitides moved up the ranks at Cerberus, Feinberg’s firm, taking the reins of its aerospace, defense and government groups. In 2012, Kollitides took on an especially sensitive and more public job for the private-equity giant. Kollitides was named chief executive of a Cerberus company combining Remington, the nation’s oldest gun maker, with more than a dozen other firearms and parts companies, eliminating hundreds of jobs from New York to Georgia to Montana.
After three years with the Cerberus-owned gunmaker, Kollitides left and became a partner at Alvarez & Marsal Capital, an offshoot of A&M consulting, whose co-founder also had long-standing business ties to Feinberg.
George K. Kollitides II, left, attends a philanthropic gala held to honor him in 2010, when he was managing director at Cerberus. Amber De Vos/Patrick McMullan Archive via Getty ImagesSome former business associates said they were not surprised that Kollitides jumped at the chance to rejoin Feinberg at the Pentagon. The two share a love for firearms and defense industry investments. They have also both described their work addressing the military’s most vexing supply chain issues as a patriotic calling.
“Americans need us at the Pentagon and our civilians and our contractors to do better,” Feinberg said last year. “We can’t fail, we can’t make excuses, we must succeed.”
On social media, Kollitides has shown the kind of partisanship long taboo in the Pentagon but now fostered in its ranks by Trump and Secretary of Defense Pete Hegseth. Kollitides has decried the “Democrat Party,” warned of the ills of socialism and posted that “the government cannot give to anybody anything that the government does not first take from somebody else.”
Over the last year, Feinberg has continued to heap responsibility on Kollitides: naming him his co-chief of staff and senior adviser; vice chairman of the Office of Strategic Capital’s investment committee; and director of two other new offices, the Economic Defense Unit and the Business Operators for National Defense, or BOND — the office with the $281 million no-bid contract.
His employment status allowing him to hold any of those roles at the Pentagon is somewhat of a mystery.
Unlike Feinberg, who was confirmed to his post by the Senate, Kollitides was reportedly first brought onto the federal government last year as a special government employee, or SGE, a designation that allows someone to work in government for no more than 130 days a year. Kollitides seemingly exceeded that cap several months ago.
Steve Feinberg, right, confers with an aide prior to testifying before the Senate Armed Services Committee at his 2025 confirmation hearing for the role of deputy defense secretary. Win McNamee/Getty ImagesBut in the Pentagon’s email system, Kollitides’ name now carries an abbreviation signifying he has been designated an HQE, or highly qualified expert. His employment classification, which the Pentagon confirmed, is designed to hire people who bring “enlightened thinking and innovation” to Defense Department roles that can last up to six years.
That distinction brings a unique benefit for Kollitides. Financial disclosures filed by HQEs are generally confidential, while those of high-ranking SGEs are often subject to release once a person fills a government role for more than 60 days. It’s unclear if Pentagon ethics officials granted Kollitides a waiver to keep any disclosures confidential.
(ProPublica requested Kollitides’ financial disclosure forms in August, but the Pentagon has not yet responded.)
Kollitides’ continued tie to Alvarez & Marsal Capital surfaced in April in a securities filing by a second company with which the defense official was taking a leadership post.
Days after Feinberg named him the head of BOND, granting Kollitides deep visibility into weapons production rates of U.S. military contractors, Kollitides took a seat on the board of D. Boral Acquisition I, an offshore shell company whose affiliate D. Boral Capital has partnered with defense-related businesses. Bloomberg Government first reported the filing in July, and that Kollitides stepped down from the position at the end of September.
Kollitides’ biography in the filing described his current roles at the Pentagon, then added that “he is also a Senior Advisor” to Alvarez & Marsal Capital and that he previously was a partner and co-head of one the firm’s funds.
A securities filing reveals that Kollitides continued working for Alvarez & Marsal Capital even after starting work at the Defense Department. Screenshot and highlighting by ProPublicaThe A&M entity that Kollitides is described as still advising in the filing is essentially the private-equity partner of the sprawling Alvarez & Marsal firm that includes A&M Federal, which is now providing consulting services for his offices at the Pentagon.
Though the private-equity and consulting businesses are distinct, they work together, share back-office staff for human resources and tech support, and have overlapping ownership, according to company documents. The private-equity arm describes itself as having a “strategic relationship” with the consulting side of A&M. The firm boosts its investment decision-making by working with the consulting firm’s thousands of employees around the globe to assess particular companies. And after the fund takes a stake in a company, it deploys the consulting arm’s employees to improve that firm’s operations and make the company more valuable.
In other words, the fund’s success hinges on the consulting firm’s.
Whether Kollitides violated government ethics rules hinges on details that he and the Pentagon have declined to provide.
A Defense Department official told ProPublica that Kollitides “does not and has never had” any investments or financial relations with A&M consulting. The official said Kollitides is also “recused on any conflicted matters related to A&M Capital,” which could be referring to Defense Department decisions related to companies A&M Capital has a financial stake in.
Ethics experts said that without a written waiver, executive branch officials are generally barred from participating in decisions, such as the awarding of a contract, that would have a direct impact on their financial interests. That law, the experts said, could apply even if the official doesn’t have a stake in a company but just draws a salary — the rationale being that they’ve improved the odds that the company will be able to continue paying them.
The Pentagon official did not answer specific questions about whether Kollitides was being compensated by A&M Capital when the contracts were signed, if he played any role in the contract decision-making process or if he sought or received an exemption to do so.
A “Blank Sheet of Paper” Contract
A&M’s first contract with the Pentagon was signed in December, months after Kollitides joined the government. That $67.6 million deal was awarded to Alvarez & Marsal Federal through a Defense Department entity focused on efforts to strengthen the nation’s industrial base.
The full scope of work that A&M provided is unclear. But documents reviewed by ProPublica show that by late last year, the firm had begun helping to vet possible loan deals for the Office of Strategic Capital, the lending unit then run in part by Kollitides.
Like that first contract, the larger, $281 million deal that followed to advise Kollitides’ BOND office came in the form of what is called an OTA, or other transaction agreement, which allows agencies to bypass regular federal contracting rules on public disclosure and oversight.
Congress first authorized the Defense Department to use the contracting method in the 1980s to fund breakthrough technologies without publicly disclosing much about the work. The Pentagon has increasingly turned to OTA contracts over the last decade to quickly fund a broader range of one-time costs, including prototype weapons and urgent production needs, even as government auditors have lamented OTAs as a “blank sheet of paper” arrangement with little oversight or accountability.
Still, experts said an OTA contract for consulting work was extraordinary. That’s because consulting is one of the simplest services the military can buy, and it has a long history of doing so through competitive bidding. Firms often publish the hourly costs for their associates, managers and other work before solicitations are posted.
But like black-box OTA contracts for secret weapons systems, the funding mechanism has hidden from public view details of what taxpayers are getting for the money.
The sheer size of the A&M contract stunned experts.
At $281,089,206.65, the consulting contract is among the largest OTAs funded through the Defense Department’s main support division in the last decade, including for top secret semiconductor projects and underwater drones, records show.
The Pentagon has said little about the impact of BOND since Hegseth claimed in February that the new entity would revolutionize military purchasing.
The defense secretary said that under the program, the military would embed former corporate executives, or, as he put it, “elite, private-sector patriots” to help optimize and accelerate the manufacturing of critical munitions. Hegseth said he thought the exercise would help the Pentagon increase resiliency in supply chains. The “era of managed decline is over,” he said.
In private recruitment materials for those executives, as well as for candidates to fill posts in other Kollitides-run units, the stakes and the mission for BOND were described in even starker terms: Neoliberalism and trade deals have left the U.S. as a country that “can no longer manufacture ships, munitions or planes in a timely manner.”
The recruiting materials cast the job of fixing that systemic problem as part-time work: “Recently retired Fortune 100 executives spend five days per month solving public- and private-sector operational challenges,” read pages viewed by ProPublica.
Two people familiar with A&M’s work for BOND said the firm’s consultants have accompanied former executives on trips to review work at major defense contractors such as Lockheed, Boeing, RTX and BAE Systems. BAE acknowledged a visit by BOND representatives but declined to comment further. Lockheed, Boeing, RTX and other companies contacted by ProPublica did not respond to requests for comment.
Contracting experts said that A&M is likely not guaranteed the full amount, and that contracts like these typically span several years, but records show A&M has already been paid about $31 million.
Not everyone, however, is welcome to participate.
One former military officer who worked in the defense industry told ProPublica he was contacted by an outside recruiter for Kollitides’ new BOND office. The recruiter, he said, told him that all applicants would be asked who they voted for.
The former military officer, who spoke on the condition of anonymity because he feared retribution, said he expressed discomfort with that line of questioning. He received an email shortly after from the recruiter telling him he was no longer under consideration. The Pentagon did not respond to a question about the officer’s account.
“Getting more effective and efficient is not a political question,” the former officer said.
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