USDA awards $12.16M for Palantir software licenses and support, extending access through 2026

Contract Overview

Contract Amount: $12,162,578 ($12.2M)

Contractor: Palantir Technologies Inc.

Awarding Agency: Department of Agriculture

Start Date: 2022-01-28

End Date: 2026-01-31

Contract Duration: 1,464 days

Daily Burn Rate: $8.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE OBJECTIVE OF THIS ACTION IS TO OBTAIN LICENSE AND SUPPORT FOR PALANTIR SOFTWARE SO THAT IT MAY CONTINUE TO BE USED AND SO THAT SOFTWARE UPDATES WILL BE ACCESSIBLE WHEN AVAILABLE.

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Agriculture obligated $12.2 million to PALANTIR TECHNOLOGIES INC. for work described as: THE OBJECTIVE OF THIS ACTION IS TO OBTAIN LICENSE AND SUPPORT FOR PALANTIR SOFTWARE SO THAT IT MAY CONTINUE TO BE USED AND SO THAT SOFTWARE UPDATES WILL BE ACCESSIBLE WHEN AVAILABLE. Key points: 1. The contract ensures continued access to Palantir software and necessary updates. 2. This action focuses on maintaining operational capabilities rather than acquiring new technology. 3. The firm fixed-price contract structure provides cost certainty for the duration. 4. The duration of the contract is approximately four years. 5. The software publisher industry is characterized by high upfront development costs and ongoing support needs. 6. This spending supports critical data analysis functions within the Animal and Plant Health Inspection Service.

Value Assessment

Rating: fair

The contract value of $12.16 million for Palantir software licenses and support over four years appears to be within a reasonable range for enterprise-level data analytics platforms. However, without specific details on the modules licensed and the level of support required, a precise value-for-money assessment is challenging. Benchmarking against similar government contracts for Palantir or comparable software would provide better context. The firm fixed-price nature helps manage cost predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the use of full and open competition generally suggests a competitive environment that should drive price discovery. This approach is intended to ensure the government receives the best value by considering all qualified sources.

Taxpayer Impact: Taxpayers benefit from the competitive process, which aims to secure the software and support at the most advantageous price possible, preventing potential overpayment that could occur with less competitive solicitations.

Public Impact

Benefits the Department of Agriculture's Animal and Plant Health Inspection Service (APHIS) by ensuring continued access to critical data analysis tools. Supports APHIS's mission in areas such as disease surveillance, food safety, and pest management through advanced data analytics. The software's impact is national, supporting APHIS's broad regulatory and operational responsibilities across the United States. Workforce implications include enabling analysts and scientists to utilize sophisticated data tools for informed decision-making.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specialized software platforms.
Reliance on a single vendor for critical software updates and maintenance.
The long-term cost of proprietary software licenses can escalate over time.

Positive Signals

Ensures continuity of essential data analysis capabilities for APHIS.
Provides access to necessary software updates, maintaining system security and functionality.
The firm fixed-price contract offers budget predictability for the specified period.

Sector Analysis

This contract falls within the Software Publishers industry (NAICS 511210), a sector characterized by the development, licensing, and support of software products. Spending in this area often supports government IT infrastructure, data analytics, and specialized operational tools. Comparable spending benchmarks would involve looking at other federal procurements for enterprise software licenses and support, particularly for data analytics platforms, which can range from hundreds of thousands to tens of millions of dollars depending on the scope and vendor.

Small Business Impact

This contract does not appear to involve a small business set-aside, as Palantir Technologies Inc. is a large business. There is no explicit mention of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the overall use of large software vendors can indirectly affect the market.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within APHIS. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified licenses and support. Transparency is facilitated by the contract award notice, which is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Civilian IT Procurement
Software Licensing and Support Services
Data Analytics Platforms
Department of Agriculture IT Spending

Risk Flags

Potential for high cost of proprietary software
Reliance on a single vendor for critical software
Need for specialized user training

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $12.2 million to PALANTIR TECHNOLOGIES INC.. THE OBJECTIVE OF THIS ACTION IS TO OBTAIN LICENSE AND SUPPORT FOR PALANTIR SOFTWARE SO THAT IT MAY CONTINUE TO BE USED AND SO THAT SOFTWARE UPDATES WILL BE ACCESSIBLE WHEN AVAILABLE.

Who is the contractor on this award?

The obligated recipient is PALANTIR TECHNOLOGIES INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Animal and Plant Health Inspection Service).

What is the total obligated amount?

The obligated amount is $12.2 million.

What is the period of performance?

Start: 2022-01-28. End: 2026-01-31.

What is the historical spending trend for Palantir software within APHIS or USDA?

Analyzing historical spending on Palantir software within APHIS or the broader USDA is crucial for understanding the long-term investment and potential escalation of costs. Without specific historical data, it's difficult to ascertain if this $12.16 million award represents a significant increase or a consistent level of expenditure. Federal procurement databases (like FPDS or USASpending) would need to be queried for prior contracts awarded to Palantir Technologies Inc. by these agencies. Such an analysis would reveal patterns in contract values, durations, and the specific services or software modules procured, providing context for the current award's financial implications and whether it aligns with past budgetary allocations for similar capabilities.

How does the per-unit cost of Palantir licenses compare to market rates or other government agencies?

Determining the per-unit cost of Palantir licenses and comparing it to market rates or other government agencies is essential for assessing value for money. Palantir's software is often customized and sold as a platform, making direct per-unit comparisons challenging without knowing the exact modules, user counts, and support levels. However, agencies can benchmark against publicly available pricing (if any) or analyze pricing from similar federal contracts awarded to Palantir or competitors for comparable functionalities. If this contract is a renewal or extension, comparing the current pricing to previous agreements can highlight any significant increases. A lack of transparent per-unit pricing information makes this benchmark difficult but critical for ensuring fair market value.

What specific Palantir software modules or capabilities are being licensed and supported under this contract?

The specific Palantir software modules and capabilities being licensed and supported are fundamental to understanding the contract's value and necessity. Palantir offers a suite of products, including Palantir Gotham, Foundry, and Apollo, each designed for different analytical and operational purposes. Knowing which modules are included (e.g., for data integration, AI/ML model deployment, operational planning) helps clarify how this $12.16 million investment directly supports APHIS's mission objectives. This detail is also crucial for assessing if the licensed capabilities align with industry standards and if alternative, potentially more cost-effective solutions exist for the specific problems APHIS aims to solve.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with the software support?

Key Performance Indicators (KPIs) and Service Level Agreements (SLAs) are critical for measuring the effectiveness and quality of the software support provided under this contract. These metrics typically define expected performance standards, such as software uptime, response times for technical issues, resolution times for bugs, and availability of software updates. Without defined KPIs and SLAs, it is difficult for APHIS to objectively assess whether Palantir Technologies Inc. is meeting its contractual obligations for support. The presence and stringency of these measures directly impact the perceived value and reliability of the service, ensuring that the government receives the support it pays for.

Are there any known risks or challenges associated with Palantir's software implementation or support within government agencies?

Risks and challenges associated with Palantir's software implementation and support within government agencies often revolve around cost, complexity, data security, and vendor dependency. Palantir's platforms are known for their power but also their significant cost and the expertise required for effective deployment and utilization. Concerns can include the potential for vendor lock-in, the need for extensive training, integration challenges with existing IT systems, and ensuring robust data governance and security protocols are maintained. Additionally, the proprietary nature of the software can sometimes limit flexibility or create dependencies. Agencies must proactively manage these risks through clear requirements, strong oversight, and comprehensive training programs.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - PLATFORM

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 12639522Q0057

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1200 17TH STREET, DENVER, CO, 80202

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,162,578

Exercised Options: $12,162,578

Current Obligation: $12,162,578

Actual Outlays: $9,518,540

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0086U

IDV Type: FSS

Timeline