WASHINGTON — Silicon Valley-based Palantir, who sued the U.S. Army several years ago over the service’s procurement strategy of an intelligence analysis system, has won an Army contract to provide just that.

Palantir beat out Raytheon in a head-to-head competition to provide the Army a new tactical version of its Distributed Common Ground System—Army, or DGCS-A, The Washington Post first reported.

The contract to provide a new system — a “capability drop 1” version — is worth $876 million over 10 years. But the first delivery order is just for $20 million, according to an industry source.

Palantir sued the Army in 2016 in the U.S. Court of Federal Claims for what it says was an unlawful procurement solicitation for the service’s next iteration of DCGS-A that shut the company’s commercial offering out of the competition.

The lawsuit argued 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 court ruled in favor of Palantir in October 2016 and upheld Palantir’s central legal argument that the Army violated a 1994 law — the Federal Acquisition Streamlining Act — by not conducting the market research needed to determine if commercially available items could meet its needs with or without modification.

The judge ordered the Army seriously look at whether commercial products existed to meet its needs.

The Army’s previous internal development path for its intelligence software suite has long been marred in controversy. As the service spent billions to develop DCGS-A, actual users of the system in theater complained that it had problems and was too complicated. Some units had been given Palantir technology instead through an urgent request to map improvised explosive devices on the battlefield and track associated intelligence. When more units asked for it, the Army blocked those orders.

The controversy bled onto Capitol Hill in 2013, where Rep. Duncan Hunter sparred with then-Army Chief of Staff Gen. Ray Odierno. The Republican congressman from California championed a push to outright cancel DCGS-A and replace it with Palantir tech that he argued would be far less expensive and far more effective.

Even in 2017, while the Army’s appeal over the court decision in the Palantir lawsuit awaited a decision, a DCGS-A system sat unused during a network integration evaluation at Fort Bliss, Texas. The systems provided to the unit during the evaluation were completely packed up because the unit fried two server stacks and the systems were having significant problems operating at the level of austerity in the desert.

The Army’s then-Training and Doctrine Command chief, Gen. David Perkins, asked soldiers what would make it better. One user simply replied: “Make it easier to use.”

And that is what Palantir’s system is meant to do. The company’s lawsuit claimed that its data-management product — Palantir Gotham Platform — does exactly what DCGS-A was trying to do at a much lower cost.

A fresh approach

The lawsuit forced the Army to rethink its acquisition plan, and in March 2018 the service chose both a major defense contractor — Raytheon — and Palantir to provide new intelligence analysis platforms that could be used effectively at the tactical level — where most of DGCS-A’s problems laid.

In an interview last fall with the head of Palantir’s defense business, Doug Philippone, he viewed the new approach as transformative to how defense acquisition could be conducted and credited the lawsuit for spurring the important change.

The Defense Department is notorious for slow acquisition where it can take up to a decade to even write requirements, then as technology is developed, the requirements often lock programs on a road of no return, even if things start to go wrong or technology is surpassed by something better.

Over the past year, the Army has begun taking this approach with major modernization efforts under a new four-star command, Army Futures Command.

Most recently the service announced, after holding a demonstration, that it would buy a number of unmanned aircraft systems from two companies, have soldiers evaluate them over a year and then make a decision on the way forward.

The Army is calling the method a “try, buy, decide approach” with commercially available products.

Taking this approach with DCGS-A, the Army looked at a variety of systems in an evaluation and then ultimately chose both Raytheon and Palantir to provide offerings, which Army intelligence analysts rigorously evaluated to determine the best of breed over the past year.

The service wanted a system that could be loaded onto a commercial laptop and easily deployed, and it wanted a system that eliminated an extensive and lengthy training course, requiring the system be easy enough to learn in eight hours. The Army also wanted its new DCGS-A systems to be able to operate on low-transmission speed or while disconnected.

Raytheon provided its FoXTEN system, which it said met those criteria.

The engineers behind Palantir’s system told Defense News in an interview at the company’s Washington, D.C., office, that the system provided to the Army used Palantir’s exceptional data-management platform overlaid with analysis tools the service desired.

The issue with DCGS, according to the engineers, is that the old system didn’t succeed as a whole ecosystem; the tools worked, but it was lacking a back end to the system that could process complicated and plentiful data in a way that made using the system easy on the front end.

And the engineers working with the Army on the project said the company’s relationship with the service was very positive. Palantir even made its debut at the Association of the U.S. Army’s annual conference in October with a strong booth presence on the showroom floor.

For the Army, this is the first time a Silicon Valley company has been chosen to provide a major system in a formal program of record.

“Supporting soldiers in their critical missions, and making sure they come home safely to their families, is a point of immense pride at Palantir,” Philippone said in a statement sent to Defense News. “It’s why we started the company. We look forward to our partnership with the men and women of the U.S. Army and will do everything we can to ensure this technology makes them more successful.”

For Raytheon, the Army’s decision to pick Palantir for the round of deliveries doesn’t mean the firm won’t be considered in the future.

“The Army plans to award multiple delivery orders for systems over [10 years]. While we are disappointed in the Army’s decision on this initial delivery order, it represents a relatively small number of systems,” Raytheon said in a statement sent to Defense News. “We will actively compete for future delivery orders as we continue to work closely with the Army to help them meet their intelligence needs.”