Pentagon Awards $350 Million in Consulting Deals to Firm Linked to Senior Defense Official
According to ProPublica reporting, the Defense Department finalized nearly $350 million in military spending and consulting contracts with Alvarez & Marsal entities connected to senior Pentagon official George K. Kollitides II. The deals include a $281 million no-bid consulting contract to advise Kollitides office, raising conflict of interest questions from ethics experts. A Pentagon spokesperson defended the contracts, stating that Kollitides and the department followed all applicable rules and ethics regulations.
Key points
- The Defense Department awarded nearly $350 million in military spending and consulting deals to Alvarez & Marsal entities connected to senior Pentagon official George K. Kollitides II.
- The contracts include a $281 million no-bid consulting agreement to advise Kollitides office under an unusual contracting method known as an other transaction agreement.
- Ethics experts raised concerns about potential conflicts of interest and lack of transparency, while a Pentagon spokesperson stated that Kollitides is in full compliance with ethical laws and regulations.
What happened
According to federal spending data and reporting by ProPublica, the Defense Department has awarded nearly $350 million in military spending and consulting deals to entities tied to senior Pentagon official George K. Kollitides II since December.
The spending includes a $281 million no-bid consulting contract finalized by the Defense Department with an affiliate firm, Alvarez & Marsal Federal, to advise Kollitides Pentagon office, known as the Business Operators for National Defense (BOND).
Who said what
Virginia Canter, a former federal government ethics lawyer, criticized the arrangements, stating that the deals look too cozy to be legitimate and that taxpayers should be appalled.
Deputy Pentagon Press Secretary Jacob Bliss defended the administration's actions in an email statement, writing that the Department of War maintains a rigorous ethics framework and that Kollitides is in full compliance with all ethical laws and regulations, adding that any claims otherwise are false.
A&M Capital stated in its own release that it is a separately capitalized and managed firm from the Alvarez & Marsal consulting business, and that none of Kollitides work for it related to the defense industry or his government service.
Context
The contracts were signed using an unusual contracting method called an other transaction agreement (OTA), which allows agencies to bypass regular federal contracting rules on public disclosure and oversight for experimental weapons and one-time costs.
Current and former officials noted that the massive spending reflects a shifting culture under the Trump administration in a wing of the Pentagon controlled by Kollitides and other former Wall Street executives recruited by Deputy Defense Secretary Steve Feinberg.
What happens next
The full scope of work provided by Alvarez & Marsal and whether Kollitides will benefit financially from the military spending windfall remains unconfirmed as federal disclosures for high-ranking officials in his classification remain confidential and the Pentagon has not yet responded to formal disclosure requests.
