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By Nick Wakeman

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Nick Wakeman

Palantir's fight with the Army heads for appeals court

Palantir has gotten some glowing press since it won a November federal court decision involving the Army’s Distributed Common Ground Systems-Army.

The company successfully argued that the Army should have used a commercial product such as one that Palantir makes rather than move forward with developing its own system.

The final written decision hasn’t been released yet. Apparently it is going through the redaction process.

Since the November decision, Palantir, whose co-founder Peter Thiel is a staunch Donald Trump supporter, has been the subject of several articles about how it taking on the Army and government procurement.

More recently, Steven Brill wrote about the company and the case in Fortune under the headline, Donald Trump, Palantir, and the crazy battle to clean up a multibillion-dollar military procurement swamp.

It’s a long article but informative. To digress for a moment, the article paints a dark picture of procurement and particularly at the Defense Department. It is hard to argue with the examples of mistakes and missteps but it also neglects to acknowledge the good things that are being done.

Anyway, that’s my bias.

The big question for me has been how far reaching the decision would be. Will it be just a victory for a single company or does it mean that there are broader implications and will push the government to buy commercial first instead of building its own?

Buying trends have been going in a more commercial direction for several years but that has been more of an evolution. The Palantir decision might be the revolution.

I raised these questions when I wrote about the decision in November but we aren’t any closer to knowing the impact today.

The Army and its attorneys at the Justice Department have asked for an extension to file their motion, which will lay the foundation for their appeal.

They declined to comment on the case. And a call to Palantir’s legal team netted no response.

The legal process may only be getting underway but you have to wonder what impact Thiel’s close relationship with Trump will have. Would he pressure the Justice Department and the Army to stop the appeal? After all the Court of Federal Claims decision lines up more with Trump’s philosophy.

In addition to Trump, the retired generals James Mattis (now secretary of defense) and H.R. McMaster (now national security adviser) used Palantir’s analytics products during their active duty careers, according to Brill’s article.

It is important to note, that Palantir was fighting this battle long before Trump even had the GOP nomination much less had won the White House.

In many ways, Palantir is on a crusade. Douglas Philippone, who runs Palantir’s defense business described the case as “so personal, so bitter” in an interview with Brill.

He didn’t mince words: “We started out politely, but now our basic message to them (DOD procurement officials) is what you’re asking for won’t work and will waste money, so you’re either stupid or corrupt.”

That’s harsh by any measure.

I think there is little chance the appeal will get short-circuited and little chance that Palantir will back down and they shouldn’t.

For now we’ll watch and wait as the evolution of the government market takes another step forward.

Posted by Nick Wakeman on Apr 10, 2017 at 11:15 AM


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