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Hegseth Just Replaced Pentagon Bureaucrats With Wall Street Dealmakers. He's Calling Them 'Deal Team Six.
Defense Secretary Pete Hegseth has launched a team of elite private sector negotiators inside the Pentagon tasked with overhauling how the US military negotiates contracts with defense companies, ending decades of cost overruns and taxpayer-funded delays.
DoW photo by U.S. Navy Petty Officer 1st Class Eric Brann)
For decades, defense contractors charged the US taxpayer to build the factory. Then charged them again for the product made inside it.
Pete Hegseth says that stops now.
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The Department of Defense has launched a team of elite private sector businessmen tasked with handling and approving defense contractor negotiations, aimed at fixing what Hegseth called the former broken Pentagon bureaucracy.
They are calling it Deal Team Six.
The name is deliberate. The implication is clear. These are not career Pentagon administrators. These are closers.
Hegseth claims that for decades, the department allowed contractors to double-dip when service members needed weapons, aircraft or ships, charging the taxpayer for factory builds and again for the final product.
His words in a recent social media video were not diplomatic.
"Despite paying companies to make weapons faster, scheduled delays were constant and cost overruns were the norm, all while their CEOs got rich," Hegseth said.
That sentence alone describes trillions of dollars in Pentagon spending over the last several decades.
Deal Team Six is folded inside the Pentagon's Economic Defense Unit, which stood up in early April after being introduced by Hegseth in a November 2025 memorandum that referred to the unit as a way to modernize contracting and provide incentives and possible penalties to industry partners.
The word penalties is doing important work in that sentence.
Here is how the new model actually works.
In exchange for companies footing the bill for certain items such as expansion efforts, new factories, assembly lines and factory plants, the department will provide steady, long-term orders for what service members need. The goal is higher volume, faster production and a flat price.
No more open-ended contracts. No more unlimited cost overruns billed back to Washington.
Hegseth was direct about what happens to companies that do not comply. He said the department will simply find others who will. "We're not tolerating delays in production or cost overruns anymore," he said.
If you have followed this far, here is where the money tells the real story.
The unit was included in fiscal year 2026's National Defense Authorization Act and appropriated more than $266 million for research, development, test and evaluation. In Trump's fiscal year 2027 $1.5 trillion defense budget, the unit is allotted over $593 million in the same funding category.
That is more than double the allocation in a single year. This is not a pilot program. It is a structural shift.
Hegseth has sought to revamp the defense industrial base by scrapping the Defense Acquisition System entirely and replacing it with a Warfighting Acquisition System, designated the arsenal of freedom. The new system is meant to speed up project timelines and increase production.
Although the team's full roster has not been revealed, George Kollitides, the former head of defense at Cerberus Capital Management, was named its director.
A private equity veteran is now running Pentagon contract negotiations. That is a sentence that would have been unthinkable five years ago.
The defense industry has operated for decades under a system that rewarded delays and cost overruns because contracts were structured in ways that made inefficiency profitable. Nobody in Washington had enough leverage or appetite to change that.
Hegseth is betting that Wall Street negotiators operating with Pentagon authority can do what career bureaucrats never managed.
"We've pushed out the bureaucrats who have made these deals in the past and replaced them with the most talented negotiators in the private sector," he said.
The defense contractors are now sitting across the table from people who built careers squeezing margin out of deals. That dynamic has never existed inside the Pentagon before.
Whether Deal Team Six delivers or becomes another layer of expensive government apparatus with a cool name is the question the next few budget cycles will answer.
The CEOs who got rich while service members waited for equipment are now being told the terms have changed. The people delivering that message this time around are not bureaucrats.
That much is different. Everything else remains to be seen.
Editor's Note: The launch of Deal Team Six represents one of the most significant shifts in Pentagon procurement culture in decades. If it works, it could save billions and accelerate military readiness. If it fails, it will be a very expensive lesson in the difference between private sector dealmaking and the complexity of government defense contracting.
