The Pentagon is steering hundreds of millions of dollars in consulting work to a firm closely linked to the official whose office it advises, and it is doing so outside the normal contracting rules that let rivals compete and the public see what it bought. ProPublica reported, in a story republished by Defense One, that the Defense Department finalized a $281 million no-bid consulting contract in June with Alvarez & Marsal Federal to advise Business Operators for National Defense (BOND), an office directed by George K. Kollitides II. Kollitides was a partner at the private equity firm Alvarez & Marsal Capital for almost 10 years, and an April securities filing still listed him as a senior adviser there.
The June deal followed a $67.6 million award to the same firm in December. Together the two agreements have put almost $350 million in military spending toward A&M Federal since December. ProPublica, citing federal spending data, said that is about five times what Alvarez & Marsal entities received from all U.S. agencies combined in the two decades before President Donald Trump returned to office.
Why the $281 Million BOND Deal Stands Out
Both awards were signed as other transaction agreements (OTAs), the contracting method the Defense Department uses to fund experimental weapons. ProPublica noted that this is work A&M has never claimed to do. OTAs let agencies bypass regular federal contracting rules on public disclosure and oversight, and as a result the deals "remain shrouded in secrecy," according to the report.
The value of the BOND contract is $281,089,206.65. ProPublica reported that it 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." Contracting experts told the outlet that A&M is probably not guaranteed the full amount and that contracts like this typically span several years. Records show the firm has been paid about $31 million so far.
Experts quoted in the story called an OTA for consulting extraordinary. Consulting is one of the simplest services the military buys, and it has a long history of buying it through competitive bidding. Firms often publish hourly rates for associates and managers before solicitations are posted. Under the OTA, the public cannot see what taxpayers are getting for the money.
The December award went to Alvarez & Marsal Federal through a Defense Department entity focused on strengthening the industrial base. ProPublica said the full scope of that work is unclear, but documents it reviewed show that by late last year the firm had begun helping to vet possible loan deals for the Office of Strategic Capital. Kollitides helped run that lending unit at the time.
What BOND Does and Who Runs It
Deputy Defense Secretary Steve Feinberg, who first hired Kollitides at Cerberus more than two decades ago, has given him several Pentagon roles. They include co-chief of staff and senior adviser, vice chairman of the Office of Strategic Capital's investment committee, and director of both the Economic Defense Unit and BOND. Defense Secretary Pete Hegseth said in February that BOND would embed former corporate executives, whom he called "elite, private-sector patriots," to help speed the manufacture of critical munitions.
Two people familiar with A&M's work for BOND told ProPublica that the firm's consultants have accompanied former executives on trips to review work at major defense contractors, including Lockheed, Boeing, RTX and BAE Systems. BAE acknowledged a BOND visit but declined to comment further.
The consulting firm and the private equity arm are separate companies, but they work closely together. Company documents show they share back-office staff for human resources and tech support and have overlapping ownership, and the private equity arm uses the consulting firm's employees to assess companies it may invest in. A&M Capital said in a statement that it is a "separately capitalized and separately managed firm from the Alvarez & Marsal consulting business." After ProPublica sent questions, A&M Capital said Kollitides had stopped working there days earlier.
Can Kollitides Steer Work to His Former Firm's Affiliate?
Ethics experts told ProPublica that executive branch officials are generally barred from taking part in decisions, such as awarding a contract, that directly affect their own finances unless they have a written waiver. The experts said that rule could apply even if the official only draws a salary from a company and holds no stake in it.
"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?"
The Pentagon disputes any wrongdoing. "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. He added that Kollitides "is in full compliance with all ethical laws and regulations." A Defense Department official said Kollitides "does not and has never had" any investments or financial relations with A&M consulting, and that he is "recused on any conflicted matters related to A&M Capital."
The official did not say whether A&M Capital was paying Kollitides when the contracts were signed, whether he played any role in the award decisions, or whether he sought or received an exemption. Kollitides works at the Pentagon as a highly qualified expert, and financial disclosures filed by people in that category are generally confidential. ProPublica said it requested his disclosure forms in August and the Pentagon has not responded.
A note on sourcing: ProPublica did the original reporting, and both pages GovConFeed read are republications of that same story by Defense One and Government Executive. They are one reporting source, not two independent ones. The Wall Street Journal reported part of the contracting on Thursday, according to ProPublica. GovConFeed did not check the figures against USAspending or other federal contract databases.
What It Means for Contractors
For management consultancies that compete for defense advisory work through competitive bidding, this case shows how much consulting money can move under an OTA with no competition and little public disclosure. Firms tracking defense consulting pipelines should watch the industrial base and support offices that issue these agreements, not only traditional contract vehicles.
The story also adds pressure on OTA use more broadly. Government auditors have already criticized OTAs as a "blank sheet of paper" arrangement with little oversight, and a $281 million consulting award with an ethics question attached is the kind of case that could draw congressional scrutiny. Contractors who rely on OTAs for legitimate prototype work, especially nontraditional defense firms, could face tighter reporting requirements or narrower eligibility if lawmakers move to limit the authority. Defense primes hosting BOND site visits should also be aware that the outside consultants on those visits work for a firm whose private equity affiliate invests in companies.
