DoD Awards $9.17M for Palantir Software Licenses, Lacking Competition

Contract Overview

Contract Amount: $9,172,065 ($9.2M)

Contractor: Palantir USG Inc

Awarding Agency: Department of Defense

Start Date: 2025-12-16

End Date: 2026-03-15

Contract Duration: 89 days

Daily Burn Rate: $103.1K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THIS DELIVERY ORDER IS PROCURE THE FOLLOWING ITEMS IN SUPPORT OF THE CAPABILITY DROP 2 REQUIREMENT: MONTHLY LICENSES.

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Defense obligated $9.2 million to PALANTIR USG INC for work described as: THIS DELIVERY ORDER IS PROCURE THE FOLLOWING ITEMS IN SUPPORT OF THE CAPABILITY DROP 2 REQUIREMENT: MONTHLY LICENSES. Key points: 1. Significant award for custom computer programming services. 2. Sole provider Palantir USG Inc. dominates this contract. 3. High risk due to lack of competitive bidding. 4. IT sector spending, specifically software licensing.

Value Assessment

Rating: questionable

The $9.17 million award for monthly licenses lacks a clear benchmark for comparison due to its sole-source nature. Without competitive bids, it's difficult to assess if the pricing is optimal or inflated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Palantir USG Inc. This lack of competition limits price discovery and potentially leads to higher costs for taxpayers.

Taxpayer Impact: Taxpayers may be overpaying due to the absence of a competitive bidding process, as the government did not explore alternative, potentially lower-cost solutions.

Public Impact

Citizens may question the fairness and cost-effectiveness of sole-source contracts. Transparency concerns arise when competition is bypassed. Potential for higher costs impacts the overall federal budget.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Potential for overpayment

Positive Signals

Clear requirement defined
Specific vendor identified

Sector Analysis

This award falls within the Information Technology sector, specifically custom computer programming services. Benchmarks for similar software licensing contracts are difficult to establish without competitive data, but large sole-source awards warrant scrutiny.

Small Business Impact

The data indicates no specific set-aside for small businesses, and the prime contractor is Palantir USG Inc., a large entity. This contract does not appear to support small business participation.

Oversight & Accountability

The 'NOT COMPETED' status suggests potential oversight gaps or justifications for bypassing the standard competitive process. Further review is needed to ensure accountability and adherence to procurement regulations.

Related Government Programs

Custom Computer Programming Services
Department of Defense Contracting
Department of the Army Programs

Risk Flags

Sole-source award bypasses competition.
Potential for inflated pricing.
Lack of transparency in procurement.
Risk of vendor lock-in.
No small business participation noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $9.2 million to PALANTIR USG INC. THIS DELIVERY ORDER IS PROCURE THE FOLLOWING ITEMS IN SUPPORT OF THE CAPABILITY DROP 2 REQUIREMENT: MONTHLY LICENSES.

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 $9.2 million.

What is the period of performance?

Start: 2025-12-16. End: 2026-03-15.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award typically involves unique capabilities, urgent needs, or a lack of viable alternatives. Without further documentation, it's impossible to determine the specific rationale. However, the absence of competition raises concerns about whether alternatives were adequately explored or if market research was insufficient.

What is the risk of vendor lock-in and future cost escalation?

There is a significant risk of vendor lock-in with sole-source contracts, especially for software licenses. This can lead to future cost escalation as the government becomes dependent on a single provider. Without competitive pressure, Palantir USG Inc. may have less incentive to offer favorable pricing in subsequent contract actions.

How does this spending align with the Department of the Army's IT modernization goals?

The alignment depends on whether Palantir's software is critical to the Army's IT modernization strategy and if it offers unique capabilities not available elsewhere. If the software is a key component, the spending could be justified. However, the lack of competition makes it difficult to assess if it's the most cost-effective solution for achieving those goals.

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 - IT MANAGEMENT

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: $9,172,065

Exercised Options: $9,172,065

Current Obligation: $9,172,065

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: W519TC25D0039

IDV Type: IDC

Timeline