Palantir Claims Victory in Lawsuit Against US Army

Peter TheilA U.S. Court of Federal Claims judge has verbally ruled in favor of Palantir in its suit against the US Army. The suit alleged that the Army was using a biased bidding process.

Palantir’s Lawsuit

Palantir is a startup co-founded by venture capitalist Peter Thiel, the billionaire who famously identifies as a Libertarian and is a vocal supporter of Donald Trump. Thiel was a co-founder of PayPal, a board member of Facebook, and is well-known for bankrolling Hulk Hogan’s lawsuit that sent Gawker into bankruptcy. 

Palantir sued the US Army in the United States Court of Federal Claims after it lost a bid. Palantir’s suit alleges that the Army wrote its requests for proposals on their Distributed Common Ground System, its next generation intelligence system, in a way that favored certain contractors and precluded existing commercial products such as Palantir’s.

The Army has been developing the Distributed Common Ground System for more than 15 years, at a cost of more than $6 billion. Palantir has argued that the Army behaved wrongfully by "refusing to allow Palantir to bid, by resisting innovation, by insisting on the failed approach of DCGS-A1." 

Palantir claims that the Distributed Common Ground System has too many problems and argues that its Gotham Platform is a superior system. The DCGS is designed to use sensors and databases to give commanding officers information about weather, terrain and enemy threats. Palantir argues that its Gotham System is a proven, state-of-the-art system that was originally developed with funding from the Central Intelligence Agency. 

Palantir argues, “These DCGS program owners seem more intent on protecting their own failed program than on adopting a far superior commercially available technology that has been proven to work.... The Army’s procurement officials are refusing even to consider buying the product that its troops on the ground are consistently telling Army headquarters they want.”

United States Court of Federal Claims Ruling

On October 31, 2016, a United States Court of Federal Claims judge ruled that the Army failed to adequately consider commercially available options for the system. The judge barred the Army from awarding the contract and ordered it to reevaluate the technology that already exists. This ruling puts Palantir back in the running for the government contract for the Distributed Common Ground System. Judge Horn’s written opinion, which is over 100 pages long, is not yet published. It will initially be published under seal to allow both parties time to request redactions.

U.S. Court of Federal Claims Judge Marian Blank Horn criticized the Army for failing to follow the applicable statutory law: “You have to follow the dictates of the statute…. The statute is not meaningless.”

Spokeswoman for the U.S. Justice Department, Nicole Navas, declined to comment on Judge Horn’s decision. Spokeswoman for the U.S. Army, Cynthia Smith, stated, “The decision announced today was an oral summary, and is to be followed by the issuance of a formal opinion…. Following the formal guidance, the Army will proceed based on a review of the full opinion.”

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