WASHINGTON — Palantir Technologies has filed a bid protest in the US Court of Federal Claims against the US Army for issuing what it says is an unlawful procurement solicitation for the service's next iteration of its internally developed intelligence software suite that shuts the company's commercial offering out of the competition.
The 81-page protest was filed in court the evening of June 30. Palantir argues that the lawsuit was necessary because the Army should be stopped from moving forward on an unlawful and risk-prone software development project that would reinvent the wheel at a very high price.
The protest comes at no surprise as the Silicon Valley-based company — through its lawyers at Boies, Schiller & Flexner, LLP, in Washington — sent a letter of intent to US Army Contracting Command on June 16 stating it would file a protest within a few weeks.
In that letter, Palantir's lawyers call the Army acquisition efforts for the Distributed Common Ground System-Army Increment 1 and Increment 2 both illegal and irrational.
The controversy over whether the Army should scrap its DCGS-A program after spending more than a decade and $3 billion to develop it or go with a commercial-off-the-shelf solution has been percolating for many years.
Palantir is arguing the way the Army wrote its requirements in a request for proposals to industry would shut out Silicon Valley companies that provide commercially available products. The company contended that the Army's plan to award just one contract to a lead systems integrator means commercially available solutions would have to be excluded.
Within Title 10, there is a law that requires the Army "to define requirements in a manner that allows for the procurement of commercial items, such as Palantir's product, 'to the maximum extent practicable,'" the protest states.
Palantir sees the Army's solicitation to industry as a "textbook violation" of the law, the document states.
According to Palantir's argument, the whole purpose of the law, "is to require Government agencies to take advantage of private sector innovation and to acquire commercial and nondevelopmental products rather than try to build those products for themselves."
The case, according to the protest, will allow the court to address a bigger issue with implications for all government acquisition and the relationship between the Defense Department and Silicon Valley.
A successful lawsuit, according to the court document, could result in breaking down walls the Army has historically built up between its "failed procurement approach and the innovations of the private sector."
Palantir seeks to show the court that its data-management product – Palantir Gotham Platform – does exactly what DCGS-A is trying to do and comes at a much lower cost.
In the protest, the company notes the Army's own documents show that Palantir has been successful in the field as a data management platform, which is what the Army is seeking to procure.
Palantir's commercial software products are widely used by over 300 companies "across a wide variety of industries" including the Defense Department, the protest states.
The company also extensively documents where US Army commanders in the field requested the Palantir Gotham Platform over DCGS-A only to be denied and points out that DCGS-A systems in theater could be seen collecting dust in a corner while intelligence analysts crowded around a computer running the Palantir software.
The protest outlines at length attempts by the Army's 82nd Airborne – which was using DCGS-A during high-risk operations in Kandahar, Afghanistan – to get Palantir. In 2011, after several soldiers were killed by improvised explosive devices over the course of a few days, the unit requested Palantir as it realized DCGS-A wasn't working to keep soldiers out of harm's way. One soldier recounted it took a day and a half to try to make a map tracking IED emplacement patterns using DCGS-A.
The request for Palantir was denied, the protest notes.
The 82nd lost six more soldiers in 2012 during a two-week period in the spring and requested Palantir again and was denied. A colonel in charge requested it again in September and was again denied. The protest adds that in September 2012, the unit returned home with 200 casualties.
The court document states that many times answers were sought in congressional hearings and through inquiries as to why the Army couldn't use Palantir, only to be countered by "repeated overpromising by the Army about the impending success of the current DCGS effort, with the truth later revealed once again to be that the DCGS effort is still failing."
A Government Accountability Office report published in June, but labeled "For Official Use Only," doesn't do much to help the Army's case as it heads to court.
The GAO was tasked to review the Army's DCGS-A Increment 1 and Increment 2 acquisition approach, and the report looks at whether the program met its cost and schedule goals and whether the system does what the Army said it would do. The GAO was also asked to assess whether the Army was applying lessons learned during Increment 1 to Increment 2 development.
The office found the service "did not demonstrate required capabilities within cost and schedule goals."
Following the program's problematic initial operational test in 2012, GAO states the Army went ahead and delivered "less capability at significantly higher cost."
The GAO chalks up DCGS-A's problems and cost and schedule overruns to the Army setting "an aggressive schedule" and using "immature technologies and software." The office also notes issues with the program were "compounded by lack of proper program oversight and ineffective management."
Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club's best analytical reporting award in 2014 and was named the Defense Media Awards' best young defense journalist in 2018.