Palantir gains foothold in Navy

Palantir Technologies has made more headway into the defense technology market by securing a potential three-year, $80 million sole-source contract to provide its data collection software to the Navy.

This is Palantir’s first formal contract with the Navy and the company was one of two finalists for the work alongside Raytheon, according to the Washington Post, which first reported the story.

In a release Thursday, Palantir said Navy will use the company’s software to create an integrated data environment for the Naval Operational Business Logistics Enterprise -- an environment intended to support supply and operational maintenance functions both on shore and at sea.

This award from the Navy represents the latest win of military technology business for the Silicon Valley outfit that has some roots in the federal ecosystem thanks to its initial backing by intelligence community investment arm In-Q-Tel.

Initially, Palantir seemingly struggled to break through in securing contracts with the largest government customer in the Defense Department.

But Palantir has strung together more successes in recent years with DOD in particular, thanks in part to a pair of wins for work on the Army’s main battlefield intelligence system.

Palantir won a legal fight two years ago to participate in phase one of refreshing the Distributed Common Ground System-Army alongside Raytheon, and in late February was awarded a place on the second phase of DCGS-A with BAE Systems’ U.S. subsidiary also selected.

A third win of Palantir’s with the Army might say more about its place in the defense market. Palantir in December secured a potential $440 million contract, reportedly over four other well-known companies, to help the branch create a single dashboard for human resource and supply chain data.

Then there is how the Navy explains what it wants with respect to Palantir. In a justification document cleared for release Feb. 10, the Navy said Palantir has the only software product that can help take out stove-piped systems currently used to support supply chain and logistics functions.

The Navy used the Other Transaction Authority process that falls outside traditional federal acquisition regulations and is meant to prioritize more rapid fielding of capabilities through quicker prototyping.

Palantir and Raytheon were chosen in November 2018 for the first six-month phase of the prototyping effort, according to the National Security Technology Accelerator consortium that managed the OTA. Thirty-one companies in total submitted initial responses to indicate interest in the program, the Post reported.

Phase two will call on Palantir to continue to work with the Navy on making the software interoperable with three other commercial software programs of record to create single end-to-end systems for auditable financial and supply chain management functions; plus aviation and maritime maintenance, repair and overhaul.

The Navy said in the justification document that it “may transition to a full production contract to support” its enterprise when the current contract ends, which indicates more growth could be on the horizon for Palantir with this new customer.