DoD awards $85.2M contract to Palantir for Commercial Data as a Service platform

Contract Overview

Contract Amount: $85,208,358 ($85.2M)

Contractor: Palantir USG Inc

Awarding Agency: Department of Defense

Start Date: 2023-06-16

End Date: 2025-06-15

Contract Duration: 730 days

Daily Burn Rate: $116.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: ESTABLISH BASIC LETTER CONTRACT FOR COMMERCIAL DATA AS A SERVE PLATFORM.

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $85.2 million to PALANTIR USG INC for work described as: ESTABLISH BASIC LETTER CONTRACT FOR COMMERCIAL DATA AS A SERVE PLATFORM. Key points: 1. Significant investment in data services for the Air Force. 2. Palantir is a key player in data analytics and AI. 3. Potential for high impact on military intelligence and operations. 4. Limited competition raises questions about cost-effectiveness.

Value Assessment

Rating: questionable

The contract value of $85.2M over two years for a data-as-a-service platform appears high. Benchmarking against similar commercial data services is difficult without more detailed scope, but Palantir's pricing is often considered premium.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition may result in taxpayers paying more than necessary for this data service.

Public Impact

Enhances the Air Force's ability to process and utilize large datasets. Supports advanced analytics and potentially AI-driven decision-making. Could improve operational efficiency and intelligence gathering capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
High contract value.
Potential for vendor lock-in.

Positive Signals

Addresses critical data service needs.
Leverages advanced technology.
Supports a key defense agency.

Sector Analysis

The IT sector, particularly software publishers, sees significant government spending. This contract falls within the 'Software Publishers' NAICS code, with benchmarks varying widely based on service complexity and vendor.

Small Business Impact

This contract does not appear to involve small business participation. The award is to a large, established technology firm, Palantir.

Oversight & Accountability

Oversight will be crucial to ensure the delivered data services meet the Air Force's requirements and that the pricing remains justified, especially given the sole-source nature of the award.

Related Government Programs

Software Publishers
Department of Defense Contracting
Department of the Air Force Programs

Risk Flags

Lack of competition
High contract value
Potential for cost overruns
Vendor lock-in risk
Unclear performance metrics

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $85.2 million to PALANTIR USG INC. ESTABLISH BASIC LETTER CONTRACT FOR COMMERCIAL DATA AS A SERVE PLATFORM.

Who is the contractor on this award?

The obligated recipient is PALANTIR USG INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $85.2 million.

What is the period of performance?

Start: 2023-06-16. End: 2025-06-15.

What specific data capabilities does this 'Commercial Data as a Service' platform provide, and how do they align with the Air Force's strategic objectives?

The contract aims to establish a platform for commercial data services, likely encompassing data ingestion, processing, storage, and analysis. Its alignment with strategic objectives would depend on how it supports intelligence, surveillance, reconnaissance, logistics, or other critical Air Force functions. Without specific details, its precise contribution remains unclear.

Given the sole-source nature, what mechanisms are in place to ensure fair pricing and prevent cost overruns over the contract's two-year duration?

As a sole-source award, traditional competitive price reduction is absent. The government may rely on cost realism analyses, historical pricing data (if available), and robust contract administration to monitor expenditures. However, the inherent lack of competition makes robust oversight paramount to ensure value for taxpayer money.

How will the effectiveness of this data service platform be measured, and what are the key performance indicators for success?

Effectiveness measurement would typically involve defining Key Performance Indicators (KPIs) related to data availability, processing speed, accuracy of insights derived, user satisfaction, and impact on mission outcomes. The contract should clearly outline these metrics and the process for evaluating performance against them.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $85,208,358

Exercised Options: $85,208,358

Current Obligation: $85,208,358

Contract Characteristics

Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)

Cost or Pricing Data: NO

Timeline