Defense industry experts are warning that a potential government stake in major firms such as Lockheed Martin or Boeing could stifle innovation, create conflicts of interest, and lead to more contract award protests, following comments from a top administration official considering the move.

Commerce Secretary Howard Lutnick on Tuesday sparked discussion of whether the Trump administration could broaden the government’s efforts to take slices of vital private firms into the defense world. Speaking with CNBC about the government’s recent acquisition of a stake in Intel, Lutnick indicated that Pentagon leaders could be looking at similar arrangements with other companies.

“There’s a monstrous discussion about defense,” Lutnick said on CNBC. “Lockheed Martin makes 97% of their revenue f

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