Money Grab/Give government contracts to family and donors
Army signs Microsoft’s $21.9B headset contract over to Trump donor Palmer Luckey’s Anduril
The Army’s Integrated Visual Augmentation System, a soldier headset program awarded to Microsoft in 2021 with a ceiling of up to $21.9 billion over 10 years, was transferred to Anduril on April 10, 2025, without a new competition. Anduril’s founder, Palmer Luckey, is a prominent Trump supporter and donor.
What happened
In 2021 the Army awarded Microsoft a contract to build the Integrated Visual Augmentation System, or IVAS, a combat headset for soldiers, with a 10-year ceiling of up to $21.9 billion. The program ran into years of problems with the device.
On February 11, 2025, Microsoft and Anduril announced that Anduril would take over the program, pending Pentagon approval, with Microsoft stepping back to provide cloud services. Microsoft asked the Army to novate, or legally transfer, the contract. The Army approved the novation on April 10, 2025, making Anduril the prime contractor without a new competition. Anduril said it would concentrate on software for headsets already delivered rather than build new ones.
In April 2025 the Army also canceled IVAS testing, said it would field no further IVAS variants, and renamed the follow-on effort Soldier Borne Mission Command. It later awarded SBMC prototype contracts to Anduril for $159 million and Rivet for $195 million. The value of the transferred contract was never disclosed.
Who benefited
Anduril became prime contractor on a flagship Army program without competing for it, then won a $159 million follow-on prototype award. Its founder, Palmer Luckey, is a prominent Trump supporter and donor. Microsoft exited a troubled program while keeping a cloud role.
Who wanted something
Anduril and Microsoft both needed the Army and the Pentagon to approve the transfer, which they did within two months of the February 11, 2025 announcement. Anduril’s founder was a major donor to the president whose administration had to sign off.
Who lost out
The program is paid from the Army budget, and the prime contractor changed hands without rebidding. Soldiers who were to receive the headsets now depend on a different company, and the Army has since said it will field no IVAS variant at all. You pay for the Army budget it comes from.
Why it matters
A program with a ceiling of up to $21.9 billion in public money moved to a company founded by a prominent Trump donor, with the administration’s approval and no new competition. The ceiling is not money spent. The Army has since redirected the effort, and the follow-on awards so far total $354 million.
Sources Data Center DynamicsCongressional Research Service (primary)DOT&E FY2025 Annual Report (primary)Breaking DefenseTechCrunch