The Pentagon finalized a $281 million no-bid consulting contract in June with Alvarez & Marsal Federal, an affiliate of the private equity firm where a senior Defense Department official, George K. Kollitides II, was a partner for nearly a decade, according to government procurement records reviewed by ProPublica.
Kollitides is the head or holds a senior role in the office that the contract advises. The deal is the second of two contracts that since December have awarded almost $350 million in military spending to Alvarez & Marsal entities — about five times more than the firm had received from all U.S. agencies combined in the two decades before President Donald Trump returned to office, according to federal spending data.
The contracts were signed under an unusual contracting method the Defense Department uses to fund experimental weapons, work that Alvarez & Marsal has never claimed to do, records show. Kollitides was listed on an April securities filing as continuing to work for his old company as a senior adviser, months after he started at the Pentagon. It is unclear if he will benefit financially from the contracts; his employment is under a special classification that allows him to keep his financial disclosures confidential.
Ethics experts said it is generally illegal for executive branch officials to play a role in awarding contracts that would directly affect 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 Alvarez & Marsal entities, A&M Capital said Kollitides had stopped working there days earlier. The firm said it is “separately capitalized and separately managed” from the consulting business, and that none of Kollitides’ work related to the defense industry or his government service. The consulting business did not answer questions, including how it learned of the contract opportunity and what services it provides.
Deputy Pentagon Press Secretary Jacob Bliss said in a statement that Kollitides “is in full compliance with all ethical laws and regulations. Any claims otherwise are false.”
The Pentagon did not respond to a question about whether Kollitides played a role in securing the contracts. The Wall Street Journal on Thursday reported the existence of some of the Alvarez & Marsal contracting.
Sources: DVIDS News · Defense News