VA awards $93.3M contract for SAAS solution to Palantir Technologies Inc

Contract Overview

Contract Amount: $93,288,096 ($93.3M)

Contractor: Palantir Technologies Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-30

End Date: 2025-09-29

Contract Duration: 1,460 days

Daily Burn Rate: $63.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SAAS SOLUTION.

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $93.3 million to PALANTIR TECHNOLOGIES INC. for work described as: SAAS SOLUTION. Key points: 1. Contract awarded for a Software as a Service (SAAS) solution, indicating a move towards cloud-based services. 2. The contract duration of 1460 days (4 years) suggests a long-term need for the SAAS solution. 3. The award to Palantir Technologies Inc. positions them as a key provider for the VA's software needs. 4. The contract is a Delivery Order under a larger contract, implying a phased or modular approach to implementation. 5. The fixed-price contract type aims to provide cost certainty for the government. 6. The contract is not set aside for small businesses, suggesting the scope or nature of the requirement favored larger entities.

Value Assessment

Rating: good

The contract value of $93.3 million over four years for a SAAS solution appears reasonable given the provider and the scope of services typically associated with such platforms. Benchmarking against similar large-scale SAAS deployments for federal agencies would provide a more precise value-for-money assessment. The fixed-price nature of the contract helps mitigate cost overrun risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. This approach generally fosters a competitive environment, potentially leading to better pricing and innovative solutions. The fact that there were 5 bidders suggests a healthy level of interest and competition for this requirement.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the pool of potential offerors, driving down prices and encouraging the government to seek the best value available in the market.

Public Impact

The Department of Veterans Affairs is the primary beneficiary, receiving a SAAS solution to potentially improve its operations. The services delivered are related to software publishing and SAAS, likely impacting data management, analytics, or operational efficiency. The contract is managed by the Department of Veterans Affairs, indicating a focus on supporting veteran services. The contract is associated with NAICS code 511210 (Software Publishers), highlighting the industry sector involved.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with a single SAAS provider over a four-year term.
Dependence on Palantir's ability to deliver and maintain the SAAS solution effectively throughout the contract period.
Ensuring data security and privacy within the SAAS platform is critical, especially with sensitive veteran data.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded favorable terms.
Fixed-price contract type provides cost predictability for the VA.
The contract duration indicates a commitment to a potentially impactful and long-term solution.

Sector Analysis

The Software Publishers industry (NAICS 511210) is a significant sector within the broader IT market, encompassing companies that develop and publish software. Federal spending in this area is substantial, covering everything from operating systems and productivity software to specialized enterprise solutions like SAAS platforms. This contract fits within the trend of government agencies adopting cloud-based SAAS solutions to enhance flexibility, scalability, and reduce infrastructure management overhead. Comparable spending benchmarks would involve analyzing other large SAAS procurements by agencies like the VA or DoD for similar functionalities.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This suggests that the nature of the SAAS solution or the competitive landscape favored larger, established providers. The absence of small business participation could limit opportunities for smaller innovative firms in this specific procurement, though they may participate in other contract vehicles.

Oversight & Accountability

The contract is managed by the Department of Veterans Affairs, which has its own internal oversight mechanisms for contract performance and financial management. The fixed-price nature of the contract provides a degree of financial oversight. Transparency would be enhanced through public reporting of contract performance metrics and any associated Inspector General reviews or audits related to the SAAS solution's implementation and effectiveness.

Related Government Programs

Department of Veterans Affairs IT Modernization Initiatives
Federal SAAS Procurement Vehicles
Software Development and Publishing Contracts
Enterprise Resource Planning (ERP) Systems

Risk Flags

Potential for vendor lock-in
Data security and privacy concerns
Performance and reliability of SAAS platform

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $93.3 million to PALANTIR TECHNOLOGIES INC.. SAAS SOLUTION.

Who is the contractor on this award?

The obligated recipient is PALANTIR TECHNOLOGIES INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $93.3 million.

What is the period of performance?

Start: 2021-09-30. End: 2025-09-29.

What is the specific functionality and intended use of this SAAS solution for the Department of Veterans Affairs?

The provided data indicates the contract is for a 'SAAS SOLUTION' with Palantir Technologies Inc. While the specific functionalities are not detailed, Palantir is known for its data integration, analytics, and operational management platforms. For the VA, such a solution could be intended for a wide range of applications, including but not limited to, improving healthcare data analytics, streamlining claims processing, enhancing supply chain management, or providing advanced operational dashboards for leadership. The contract's duration of four years suggests a significant and ongoing operational need that the SAAS platform is expected to fulfill, likely involving complex data sets and requiring robust analytical capabilities to support VA's mission of serving veterans.

How does the awarded price of $93.3 million compare to similar SAAS contracts for federal agencies?

Benchmarking this $93.3 million SAAS contract requires comparison with similar large-scale enterprise SAAS procurements by federal agencies. Factors such as the number of users, scope of services (e.g., data analytics, workflow automation, specific domain functions), and the vendor's market position significantly influence pricing. Palantir Technologies is a high-end provider, and their solutions often come with a premium due to advanced capabilities. Without specific details on the service level agreements, user counts, and modules deployed, a precise comparison is difficult. However, for a four-year term, $93.3 million suggests a substantial deployment, potentially serving thousands of users or handling critical, complex data operations. Agencies like the DoD or HHS procure similar large SAAS solutions, and their pricing structures, if publicly available, would offer the best comparative context.

What are the key performance indicators (KPIs) or metrics used to evaluate the success of this SAAS solution?

The provided contract data does not specify the Key Performance Indicators (KPIs) or metrics for evaluating the success of this SAAS solution. Typically, for a SAAS contract, KPIs would focus on system availability and uptime (e.g., 99.9% uptime), response times for critical functions, data accuracy and integrity, user adoption rates, and the achievement of specific operational improvements defined in the contract's statement of work. For the VA, these could include metrics related to faster claims processing, improved patient outcome data analysis, or enhanced resource allocation efficiency. The effectiveness of the Inspector General's office or internal VA oversight would be crucial in monitoring these KPIs and ensuring the contractor meets performance expectations.

What is Palantir Technologies Inc.'s track record with the Department of Veterans Affairs or similar agencies?

Palantir Technologies Inc. has a notable track record with various U.S. federal agencies, including significant work with the Department of Defense (DoD) and intelligence agencies, often involving large-scale data analytics and integration platforms. Their engagement with the Department of Veterans Affairs (VA) has also been documented, particularly concerning data modernization and health informatics initiatives. For instance, Palantir has been involved in projects aimed at improving the VA's ability to manage and analyze health data. This specific $93.3 million contract represents a substantial award, indicating a continued or expanded relationship and likely building upon previous successful engagements or pilot programs within the VA, demonstrating a level of trust and proven capability.

What are the potential risks associated with a sole-source or limited competition award for a SAAS solution of this magnitude?

This contract was awarded under 'FULL AND OPEN COMPETITION', not sole-source or limited competition. Therefore, the risks typically associated with non-competitive awards, such as potentially higher prices due to lack of market pressure, limited innovation, and reduced transparency, are mitigated. Full and open competition implies that multiple vendors had the opportunity to bid, fostering a more competitive environment. The presence of 5 bidders further supports this. Risks that remain relevant even with full competition include vendor lock-in over the contract's four-year duration, potential challenges in data migration if switching providers later, cybersecurity vulnerabilities inherent in any SAAS platform, and the contractor's ability to consistently meet performance requirements throughout the contract term.

How does this contract align with the VA's broader IT modernization strategy and goals?

This $93.3 million SAAS solution contract with Palantir Technologies Inc. likely aligns with the VA's broader IT modernization strategy, which often emphasizes leveraging advanced data analytics, cloud computing, and integrated platforms to improve services for veterans. The VA has been actively pursuing initiatives to modernize its systems, enhance data sharing, and improve the efficiency of its operations, particularly in areas like electronic health records and claims processing. A SAAS solution from a company like Palantir, known for its data integration and analytical capabilities, could support these goals by providing a unified platform for managing and analyzing vast amounts of data, thereby enabling better decision-making, personalized veteran services, and operational efficiencies across the department.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

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: $102,776,738

Exercised Options: $93,558,096

Current Obligation: $93,288,096

Actual Outlays: $21,074,339

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F0086U

IDV Type: FSS

Timeline