Harward was offered the job after Michael Flynn was fired by Trump on Monday for misleading Vice President Mike Pence over his conversations with Russia’s ambassador to the United States.
The White House official said Harward cited family and financial reasons for opting not to take the job. Harward is a senior executive at Lockheed Martin.
Two sources familiar with the decision said Harward turned down the job in part because he wanted to bring in his own team.
That put him at odds with Trump, who had told Flynn’s deputy, K.T. McFarland, that she could stay.
“Harward is conflicted between the call of duty and the obvious dysfunctionality,” FT quoted the unidentified person as saying.
One unnamed friend of Harward told CNN that the former SEAL referred to Trump's offer as a "s--- sandwich."
Trump appeared to refer to Harward earlier in the day at a presidential news conference, saying: “I have somebody that I think will be outstanding for the position.” The president also made clear why he asked Flynn to resign, saying it was because the retired lieutenant general had not been completely truthful with Pence about his conversations with the Russian ambassador to the United States, Sergei Kislyak.
“The thing is, he didn’t tell our vice president properly, and then he said he didn’t remember. So either way, it wasn’t very satisfactory to me,” Trump said.