NEWS & RESEARCH
In June 2026, the Pentagon signed a $281 million no-bid consulting contract with Alvarez & Marsal Federal to advise a new Department of Defense (DoD) office led by George K. Kollitides II. The firm was a familiar one to Kollitides, who spent nearly a decade as a partner at Alvarez & Marsal Capital, the consulting firm’s private equity sister company, before joining the Pentagon in 2025. Though technically separate, the two businesses share ownership and back-office staff and routinely work together on investment deals. The June contract also wasn’t the firm’s first with the Pentagon, coming just six months after a $67.6 million DoD award to Alvarez & Marsal Federal for work tied to another office Kollitides helps lead. And his ties to his old firm lasted well into his government service, as Alvarez & Marsal Capital said he stopped working there only days before ProPublica asked about the deals.
SOURCES: ProPublica
ANALYSIS & OPINION
Experts say the deal, awarded to Alvarez & Marsal Federal without letting other companies bid, was extraordinary. Federal agencies are generally required to open contracts to competition so taxpayers get the best price; sole-source awards are reserved for narrow exceptions, such as when only one company can do the work or an urgent need leaves no time to compete. "There are a million consulting firms in D.C. and New York," said Virginia Canter, a former federal government ethics lawyer. "Why would you sole source this contract? They're not sending replacement parts for a ship that is sinking." Nor was Alvarez & Marsal an obvious choice. The nearly $350 million it has been awarded by the Pentagon since December 2025 is about five times what all of its entities collected from every US agency combined in the two decades before Trump returned to office, and the firm markets itself as helping agencies build a "customer-centric culture," not as a weapons developer, even though both deals ran through a funding mechanism Congress created to pay for experimental weapons prototypes. What the two deals do share is Kollitides, since both fund work tied to Pentagon offices he leads or holds a senior role in. And the arrangement has been set up in ways that keep it out of public view. Both contracts were signed as other transaction agreements (OTAs), which, until a law signed in September, bypassed standard disclosure rules and which government auditors have described as a "blank sheet of paper" with little oversight. Kollitides, meanwhile, was originally brought on to the DoD as a special government employee, a status whose senior holders often have to make their financial disclosures public, but he now holds a "highly qualified expert" designation that keeps those disclosures confidential. That secrecy matters, because ethics experts say that without a written waiver, executive branch officials are generally barred by law from taking part in decisions, such as awarding a contract, that directly affect their own finances, a rule that can apply even if the official simply draws a salary from a company with a stake in the outcome. Kollitides was still listed as a senior adviser to Alvarez & Marsal Capital, the consulting firm's private equity partner, as late as April 2026, and while the Pentagon insists he followed all ethics rules, it has declined to say whether he played any role in the awards or received a waiver. "It looks way too cozy to be legitimate," Canter said. "I think taxpayers should be appalled." But current and former defense officials say the deal reflects a broader shift at the Pentagon under Trump, where an insular, politicized culture has taken hold in the wing run by Kollitides and other former Wall Street executives. Instead of open, competitive processes, they say, its leaders increasingly rely on their own personal networks to decide which companies get funded, an approach that favors people and firms with close ties to the administration.
SOURCES: ProPublica
HOW TO FIX IT
Federal action:
Reintroduce and pass the Executive Branch Conflict of Interest Act, which would bar senior officials from taking part in any matter in which a former employer or client has a financial interest, with criminal and civil penalties for violations. Current law only bars officials from decisions that directly affect their own finances.
Pass the SGE Ethics Enforcement and Reform (SEER) Act, which would require the Office of Government Ethics to approve any conflict-of-interest waiver granted to a special government employee (SGE) and make those waivers and financial disclosures public. The Pentagon has refused to say whether Kollitides received a waiver, including during his time as an SGE, to work on matters tied to his former firm.
Pass the Special Government Employees Transparency Act, which would automatically convert special government employees into regular federal employees once they serve more than 130 days in a year and require most of them to make their financial disclosures public. Kollitides was brought into the Pentagon as an SGE and appears to have exceeded that cap months ago, and this bill would have subjected him to full ethics rules and public scrutiny rather than leaving room to move him into a status that keeps his finances confidential.
Pass legislation requiring highly qualified experts to file public financial disclosures, the same as other senior officials. The designation was created to bring outside talent into the Pentagon, not to shield powerful officials’ finances.
Pass legislation limiting other transaction agreements to genuine prototype and research projects and explicitly barring their use for consulting and advisory services. OTAs were designed to speed the development of experimental weapons; closing them off to consulting work would stop agencies from using them to award routine contracts like Alvarez & Marsal’s without competition or public scrutiny.
Pass legislation requiring agencies to cancel a contract once an inspector general finds it was tainted by a conflict of interest, and authorizing the Justice Department to recover the money even if agency leaders object. The law should also cover deals like Alvarez & Marsal’s that were signed outside normal contracting rules. Right now, agencies generally have to wait for a criminal conviction and then decide for themselves whether to act, so a tainted deal can keep paying out indefinitely when the officials involved have no interest in stopping it.
Open a Department of Defense Inspector General investigation into both contracts, including whether Kollitides played any role in the awards, whether he received an ethics waiver and whether using OTAs for consulting work was legally justified. The Pentagon has offered only blanket assurances that Kollitides followed the rules; an independent review is the only way to test them.
Direct the Government Accountability Office to audit both Alvarez & Marsal contracts and the spending of Kollitides’ office, including what the firm has delivered for the roughly $31 million it has already been paid and whether the Pentagon is improperly using OTAs to buy routine services like consulting. Lawmakers can request the review without new legislation, and GAO has previously faulted the Pentagon for not collecting the data needed to track how its OTAs are used.
Hold oversight hearings in the Senate and House Armed Services committees on the Alvarez & Marsal contracts, and, if necessary subpoena the contract files, Kollitides’ financial disclosures and any ethics waivers or recusal records. The department has yet to explain what taxpayers are getting for $281 million and public hearings would force officials to defend the deal on the record.
Refer the matter to the Justice Department’s Public Integrity Section to determine whether Kollitides violated the federal law barring officials from participating in decisions that affect their own financial interests.
Have the Office of Government Ethics review the Pentagon’s handling of Kollitides’ ethics obligations, including his shift from special government employee to “highly qualified expert” and whether that move was used to keep his financial disclosures from public view. OGE oversees ethics compliance across the executive branch and can flag agencies that fail to enforce conflict-of-interest rules.
Litigation:
Sue under the Freedom of Information Act to force the Pentagon to release the contract documents, its justification for skipping competition and any ethics waivers or recusal records for Kollitides. Watchdog groups and news outlets regularly use these suits to pry loose records that agencies would rather keep private.
File a bid protest, the formal challenge a competing firm can bring when it believes a contract was improperly awarded, arguing the deal was a consulting contract improperly dressed up as a prototype agreement to avoid competition. Courts have split on whether OTAs can be challenged this way, so a case here would test whether the Pentagon can use them to shut other firms out.
File a False Claims Act whistleblower suit if an insider has evidence the contract was secured through a conflict of interest. Courts have accepted undisclosed conflicts as grounds for these cases, which let whistleblowers sue on the government’s behalf and recover misspent taxpayer money.
Legislation: H.R. 244 - Executive Branch Conflict of Interest Act | S. 1491 - SGE Ethics Enforcement Reform Act of 2025 | S. 1196 - Special Government Employees Transparency Act of 2025
