State Dept Awards $11.8M to Palantir for Analytics Software, Extending Contract to 2026

Contract Overview

Contract Amount: $11,792,791 ($11.8M)

Contractor: Palantir USG Inc

Awarding Agency: Department of State

Start Date: 2025-09-30

End Date: 2026-09-29

Contract Duration: 364 days

Daily Burn Rate: $32.4K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: PALANTIR PROJECT - CENTER FOR ANALYTICS

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94301

State: California Government Spending

Plain-Language Summary

Department of State obligated $11.8 million to PALANTIR USG INC for work described as: PALANTIR PROJECT - CENTER FOR ANALYTICS Key points: 1. Significant contract value of $11.8 million awarded to Palantir. 2. Sole-source award raises questions about competition and potential cost savings. 3. Contract duration of one year with options for extension. 4. Focus on software publishing (NAICS 513210) indicates a technology-centric procurement.

Value Assessment

Rating: questionable

The contract value of $11.8 million for a one-year duration is substantial. Without competitive bidding, it's difficult to assess if this price is optimal compared to similar analytics software solutions available on the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under SAP, indicating a sole-source or limited competition award. This lack of competition may have limited price discovery and potentially led to a higher price than if multiple vendors had bid.

Taxpayer Impact: The absence of competitive bidding could mean taxpayers are not receiving the best possible value for this software procurement.

Public Impact

Citizens may be concerned about the lack of transparency in awarding large contracts without competition. The use of advanced analytics software by government agencies impacts data security and privacy. Taxpayers expect efficient use of funds, and sole-source contracts can raise questions about cost-effectiveness.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpayment

Positive Signals

Specific need for Palantir's unique capabilities
Contract supports critical analytics functions

Sector Analysis

The Department of State's procurement of analytics software falls within the broader IT sector, specifically software publishing. Benchmarks for similar government analytics software contracts vary widely based on functionality and vendor, but large sole-source awards warrant scrutiny.

Small Business Impact

The data indicates this contract was awarded to Palantir USG Inc., a large corporation. There is no indication that small businesses were involved in this specific procurement, either as prime contractors or subcontractors.

Oversight & Accountability

The award being a sole-source BPA call suggests that oversight mechanisms may have been bypassed or deemed unnecessary by the agency. Further review of the justification for sole-source procurement is needed to ensure accountability.

Related Government Programs

Software Publishers
Department of State Contracting
Department of State Programs

Risk Flags

Sole-source award lacks transparency.
Potential for inflated pricing due to no competition.
Limited opportunity for small business participation.
Need for justification of unique capabilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $11.8 million to PALANTIR USG INC. PALANTIR PROJECT - CENTER FOR ANALYTICS

Who is the contractor on this award?

The obligated recipient is PALANTIR USG INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $11.8 million.

What is the period of performance?

Start: 2025-09-30. End: 2026-09-29.

What specific capabilities does Palantir offer that justify a sole-source award for the Department of State's analytics needs?

The justification for a sole-source award typically centers on unique capabilities, proprietary technology, or existing integration that would make switching vendors prohibitively expensive or technically infeasible. For Palantir, this often relates to their integrated data platform and advanced analytical tools that may be deeply embedded within the agency's operations.

What is the potential financial risk to taxpayers due to the lack of competition in this $11.8 million contract?

The primary financial risk is the potential for paying a premium price compared to what could have been achieved through a competitive bidding process. Without competing offers, the government may not benefit from price reductions or more cost-effective solutions that other vendors might have provided, leading to inefficient use of taxpayer funds.

How effective is the Department of State likely to be in achieving its analytics goals with this Palantir contract, given the procurement method?

Effectiveness is difficult to gauge solely on the procurement method. If Palantir's platform is indeed the best fit and critical for the State Department's mission, the contract could be highly effective. However, the lack of competition raises concerns about whether alternative, potentially more cost-effective or innovative solutions were overlooked, which could impact long-term effectiveness and adaptability.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 19AQMM25Q0062

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Palantir Technologies Inc.

Address: 635 WAVERLEY ST, PALO ALTO, CA, 94301

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,925,704

Exercised Options: $11,792,791

Current Obligation: $11,792,791

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 19AQMM25A1228

IDV Type: BPA

Timeline