Company to sue Army over handling of intelligence contract

Editor's Note: This article originally appeared on FCW.com.

Silicon Valley-based Palantir will sue the Army over its handling of an intelligence system contract worth an estimated $206 million, a lawyer for the firm said.

The data-mining company, which has received funding from CIA venture capital firm In-Q-Tel, believes the Army has shown an illegal bias against commercial off-the-shelf products in its solicitation for the second version of an intelligence-sharing platform known as the Distributed Common Ground System-Army.

The solicitation for DCGS-A Increment 2 is "unlawful, irrational, arbitrary and capricious," wrote Hamish Hume, an attorney for Palantir, in a letter to Army Contracting Command-Aberdeen Proving Ground. The June 16 letter states that Palantir's legal representatives plan to file a protest in the U.S. Court of Federal Claims within a week.

That case could be a litmus test for agencies' legal obligations to buy commercial products.

DCGS-A has been plagued by delays and criticism of its effectiveness despite pledges from Army officials to turn the program around. In announcing the request for information for DCGS-A Increment 2, Army officials acknowledged "well-publicized soldier concerns regarding the existing DCGS-A system's 'ease of use' in the field." The RFI pledged the Army would "consider all industry inputs and initiatives" in carrying out the solicitation.

Hume's letter, however, accuses Army bureaucrats of going against the spirit of Defense Secretary Ash Carter's efforts to get the Pentagon to better use new technologies. Hume claimed Palantir's big-data platform could meet the Army's needs for a fraction of the cost outlined in the solicitation.

"In a larger sense, this solicitation is a prime example of the Army's reluctance to adopt commercial innovation and instead defend repeated attempts to reinvent technologies from scratch," he wrote.

Palantir's feud with the Army over DCGS-A Increment 2 escalated last month when the Government Accountability Office denied the company's protest challenging the terms of an Army request for proposals.

The company had argued that the Army "failed to implement the statutory and regulatory preference for the acquisition of commercial items, resulting in a solicitation that unduly restricts competition," as GAO put it.

Rep. Duncan Hunter (R-Calif.) has been the fiercest critic of the DCGS-A contracting process on Capitol Hill. His chief of staff, Joe Kasper, welcomed Palantir's decision to sue the Army.

"The Army is doing its best to replicate Palantir," Kasper told FCW. "The best way at this point to get the Army to stop building something that already exists is to take legal action," he added, calling the step "something they should've done a long time ago."

Palantir has asked the Army not to issue any contract award for DCGS-A Increment 2 until the litigation is resolved.