Palantir awarded $2.5M for CRRT Enhancements by the Department of the Army, a sole-source contract

Contract Overview

Contract Amount: $2,545,019 ($2.5M)

Contractor: Palantir USG Inc

Awarding Agency: Department of Defense

Start Date: 2025-09-22

End Date: 2026-05-21

Contract Duration: 241 days

Daily Burn Rate: $10.6K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CRRT ENHANCEMENTS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $2.5 million to PALANTIR USG INC for work described as: CRRT ENHANCEMENTS Key points: 1. Contract awarded to a single vendor suggests potential lack of competitive pricing. 2. Limited competition may reduce opportunities for innovation and cost savings. 3. Fixed-price contract type shifts risk to the contractor, but oversight is crucial. 4. Contract duration of 2 years provides a defined period for service delivery. 5. The specific nature of 'CRRT Enhancements' warrants further investigation into its necessity and scope. 6. Geographic location in California may indicate specific operational needs or contractor presence.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and specific technical focus ('CRRT Enhancements'). Without competitive bids, it's difficult to ascertain if the $2.5 million price reflects fair market value. The contract's fixed-price structure is generally favorable for the government in controlling costs, but the absence of competition raises concerns about potential overpayment. Further analysis would require understanding the specific deliverables and comparing them to similar custom software development projects, which are often highly variable in cost.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific capability or technology is only available from a single source, or in urgent situations. The lack of competition means there were no other bidders, and therefore no price discovery through a bidding process. This approach can lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards limit taxpayer value by bypassing competitive pressures that drive down prices. This means taxpayers may not be getting the best possible price for the services rendered.

Public Impact

The Department of the Army is the primary beneficiary, receiving enhancements to its 'CRRT' system. Services delivered include custom computer programming, likely focused on software development and integration. The contract's geographic impact is tied to California, where the contractor is located or services are performed. Workforce implications are likely internal to the Army, involving personnel who will utilize the enhanced system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may stifle innovation and reduce the pool of potential solutions.
The specific nature of 'CRRT Enhancements' is not detailed, raising questions about scope and necessity.
Reliance on a single vendor could create future dependency and lock-in.

Positive Signals

Fixed-price contract type helps manage cost certainty for the government.
Contract is awarded to a known entity (Palantir USG Inc.), potentially leveraging existing expertise.
Defined period of performance (2 years) provides clear expectations for delivery.

Sector Analysis

This contract falls within the IT and software development sector, specifically custom computer programming services. The market for such services is vast and highly competitive, with numerous firms offering specialized development. However, for highly specific or proprietary solutions like those potentially offered by Palantir, sole-source awards can occur. Comparable spending benchmarks are difficult to establish without knowing the exact nature of 'CRRT Enhancements,' but custom software development can range significantly in cost based on complexity, integration needs, and intellectual property.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'ss': false and 'sb': false. The prime contractor, Palantir USG Inc., is a large business. There is no explicit information regarding subcontracting plans for small businesses within this award notice. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, unless Palantir voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of the Army, likely managed by contracting officers and program managers responsible for the CRRT system. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified enhancements by the performance end date. Transparency is limited due to the sole-source nature and lack of public detail on the 'CRRT Enhancements.' Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense IT Modernization Programs
Custom Software Development Services
Intelligence Community Information Technology Enterprise (IC ITE)
Army Logistics Modernization

Risk Flags

Sole-source award may indicate a lack of market research or justification.
Potential for cost overruns if scope is not tightly managed, despite fixed-price.
Lack of transparency regarding specific deliverables and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $2.5 million to PALANTIR USG INC. CRRT ENHANCEMENTS

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 Army).

What is the total obligated amount?

The obligated amount is $2.5 million.

What is the period of performance?

Start: 2025-09-22. End: 2026-05-21.

What is the specific functionality and purpose of the 'CRRT Enhancements' being procured?

The provided data does not specify the exact functionality or purpose of the 'CRRT Enhancements.' CRRT typically stands for 'Critical Response Readiness Team' or similar operational units within military contexts, suggesting these enhancements are likely related to software or systems supporting rapid deployment, intelligence analysis, or operational command and control. Without further details, it's impossible to assess the necessity or technical scope. This lack of transparency is a common challenge with specialized defense procurements, making independent value assessment difficult. Further inquiry would require accessing the contract's statement of work or related documentation.

Has Palantir USG Inc. previously been awarded sole-source contracts for similar 'enhancements' within the Department of Defense?

Palantir USG Inc. has a history of receiving significant sole-source and limited-competition contracts from various U.S. government agencies, particularly within the defense and intelligence communities. Their work often involves complex data integration, analytics, and software platforms tailored to specific government needs, such as those related to intelligence analysis, battlefield awareness, and logistical support. While specific details on prior 'CRRT Enhancements' contracts are not provided here, Palantir's established role in providing such specialized capabilities makes sole-source awards for related work plausible, though often subject to scrutiny regarding competition.

What is the typical cost range for custom computer programming services of this nature, and how does this contract compare?

The cost range for custom computer programming services varies dramatically based on complexity, technology stack, integration requirements, and the specific expertise of the vendor. For highly specialized software development, especially involving advanced data analytics and secure government systems, hourly rates can range from $150 to over $500 per hour, depending on the skill level required. A $2.5 million contract over approximately 2 years (241 days) suggests a significant development effort. However, without a detailed statement of work, it's impossible to benchmark this contract accurately against market rates. The sole-source nature further complicates direct comparison, as competitive bidding often leads to more optimized pricing.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of these CRRT Enhancements?

The provided contract data does not include specific Key Performance Indicators (KPIs) or metrics for evaluating the success of the CRRT Enhancements. Typically, such metrics would be detailed in the contract's Statement of Work (SOW) or Performance Work Statement (PWS). For software enhancements, KPIs might include system uptime, processing speed improvements, reduction in error rates, successful integration with other systems, user adoption rates, or achievement of specific operational objectives (e.g., faster response times for critical events). The absence of this information in the summary data highlights a gap in understanding how contract performance and value will be measured.

Are there any known risks associated with Palantir USG Inc.'s performance on similar government contracts?

Palantir USG Inc. generally has a strong track record of delivering complex software solutions to government clients. However, like many large technology providers working on sensitive government projects, potential risks can include cost overruns (though mitigated by fixed-price contracts), schedule delays (less common with defined delivery orders), and challenges related to data security and integration with legacy systems. Concerns sometimes arise regarding the proprietary nature of their platforms and the potential for vendor lock-in. Specific performance issues would typically be documented in contract performance reports or CPARS (Contractor Performance Assessment Reporting System), which are not detailed in this summary.

How does this contract's value compare to the total IT spending of the Department of the Army or Department of Defense?

This contract, valued at approximately $2.5 million, represents a very small fraction of the overall IT spending for the Department of the Army and the Department of Defense. The DoD's annual IT budget typically runs into the tens of billions of dollars. For example, recent fiscal years have seen IT budgets exceeding $40 billion. Therefore, while $2.5 million is a substantial sum for a single contract, it is a minor component within the vast landscape of defense IT investments. This perspective is important for understanding the relative scale and impact of individual procurements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

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: $2,545,019

Exercised Options: $2,545,019

Current Obligation: $2,545,019

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC25D0039

IDV Type: IDC

Timeline