DOT awards Palantir $5.5M for software licenses and services, extending existing support

Contract Overview

Contract Amount: $5,543,364 ($5.5M)

Contractor: Palantir Technologies Inc.

Awarding Agency: Department of Transportation

Start Date: 2024-09-17

End Date: 2026-06-10

Contract Duration: 631 days

Daily Burn Rate: $8.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: G07A02.01. ASIAS. FY23 F&E FUNDS TO APPLY FOR THE NEW TASK ORDER #TBD FOR 75 SOFTWARE LICENSES/CORES ($507,655.44) FOR SERVICES ($209,888.91)

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Transportation obligated $5.5 million to PALANTIR TECHNOLOGIES INC. for work described as: G07A02.01. ASIAS. FY23 F&E FUNDS TO APPLY FOR THE NEW TASK ORDER #TBD FOR 75 SOFTWARE LICENSES/CORES ($507,655.44) FOR SERVICES ($209,888.91) Key points: 1. Contract value appears reasonable given the duration and scope of software licensing and associated services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a delivery order under an existing contract, indicating a continuation of services. 4. Performance period spans over 1.5 years, suggesting a need for sustained support. 5. The primary service is software licensing, a common requirement across federal agencies. 6. The contract is firm-fixed-price, providing cost certainty for the government.

Value Assessment

Rating: good

The total award of $5.54 million for software licenses and services over approximately 20 months appears to be within a reasonable range for enterprise software solutions. Benchmarking against similar large-scale software procurements for government agencies, the per-user or per-license cost would need further analysis, but the overall value seems aligned with market expectations for specialized software. The firm-fixed-price structure helps manage cost risks for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The specific number of bidders is not provided, but the use of full and open competition generally fosters a competitive environment, which can lead to better pricing and terms for the government. This approach is preferred for maximizing value and ensuring a wide range of potential solutions are considered.

Taxpayer Impact: The use of full and open competition is beneficial for taxpayers as it promotes a level playing field, encourages innovation, and is likely to result in more cost-effective solutions compared to sole-source or limited competition awards.

Public Impact

The Department of Transportation, specifically the Federal Aviation Administration, is the primary beneficiary, receiving software licenses and services. The services delivered are related to software licensing and support, crucial for operational efficiency and data management. The geographic impact is likely concentrated within the FAA's operational centers, though the software may support nationwide functions. Workforce implications include the potential need for personnel trained to utilize and manage the new software licenses.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the software becomes deeply integrated into agency workflows.
Dependence on a single vendor for critical software updates and support.
The specific functionalities and long-term necessity of the software require ongoing evaluation.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Full and open competition suggests a robust market evaluation.
Delivery order under an existing contract implies established processes and potential for streamlined execution.

Sector Analysis

This contract falls within the Software Publishers industry (NAICS 513210). The federal government is a significant consumer of software, with spending across various sectors including defense, intelligence, and civilian agencies. This procurement represents a portion of the broader federal IT spending, which is characterized by a mix of commercial off-the-shelf software, custom development, and cloud services. Comparable spending benchmarks would involve analyzing other large federal software license agreements.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As it was awarded under full and open competition, the primary focus was likely on the best overall value from all eligible offerors, rather than a specific set-aside for small businesses. Further analysis would be needed to determine if small businesses are involved as subcontractors.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Federal Aviation Administration. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified software licenses and services by the performance end date. Transparency is generally maintained through contract award databases, though detailed performance metrics may not always be publicly disclosed.

Related Government Programs

Federal Information Technology Acquisition Reform Act (FITARA) related spending
Software and Information Technology Enterprise Solutions (SWIFT)
General Services Administration (GSA) IT Schedule contracts
Department of Transportation IT Modernization initiatives

Risk Flags

Potential for cost overruns if scope creep occurs.
Risk of vendor lock-in with specialized software.
Dependence on vendor for critical updates and security patches.
Ensuring effective utilization and adoption by end-users.

Frequently Asked Questions

What is this federal contract paying for?

Department of Transportation awarded $5.5 million to PALANTIR TECHNOLOGIES INC.. G07A02.01. ASIAS. FY23 F&E FUNDS TO APPLY FOR THE NEW TASK ORDER #TBD FOR 75 SOFTWARE LICENSES/CORES ($507,655.44) FOR SERVICES ($209,888.91)

Who is the contractor on this award?

The obligated recipient is PALANTIR TECHNOLOGIES INC..

Which agency awarded this contract?

Awarding agency: Department of Transportation (Federal Aviation Administration).

What is the total obligated amount?

The obligated amount is $5.5 million.

What is the period of performance?

Start: 2024-09-17. End: 2026-06-10.

What is the specific nature of the software being licensed and its intended use within the FAA?

The provided data does not specify the exact software product being licensed. However, given the vendor (Palantir Technologies Inc.), it is likely related to data analytics, artificial intelligence, or mission-critical software platforms that the company offers. These platforms are often used by government agencies for complex data integration, analysis, and operational decision-making. For the Federal Aviation Administration (FAA), such software could be used for air traffic management, safety analysis, predictive maintenance, or intelligence gathering related to aviation operations. A deeper dive into the contract's Statement of Work (SOW) or the specific task order would reveal the precise functionalities and intended applications.

How does the per-license cost compare to commercial market rates for similar software?

Without knowing the specific software product and the number of licenses or cores purchased, a direct per-license cost comparison is challenging. Palantir's software is often considered a premium, specialized solution, and its pricing can reflect advanced capabilities and dedicated support. To benchmark effectively, one would need to identify the exact software modules and license types (e.g., user-based, core-based, feature-based) and compare them against publicly available pricing for comparable enterprise data analytics or AI platforms from other vendors. Federal procurement data, such as GSA Schedules or past performance information on similar contracts, could offer comparative insights, but Palantir's unique offerings may limit direct comparisons.

What is Palantir Technologies Inc.'s track record with the Department of Transportation and the FAA?

Palantir Technologies Inc. has a significant track record with various U.S. federal agencies, including defense and intelligence communities, for its data analytics and software platforms. Their engagement with the Department of Transportation (DOT) and specifically the Federal Aviation Administration (FAA) would be detailed in contract databases like FPDS or SAM.gov. Past awards would indicate the types of services and software provided, their duration, and value. Examining these records can reveal the extent of their involvement, performance history, and any past issues or successes, providing context for this new award. This specific award is a delivery order under an existing contract, suggesting a continuation or expansion of a prior relationship.

What are the key performance indicators (KPIs) for this contract, and how will success be measured?

The provided data does not detail the specific Key Performance Indicators (KPIs) for this contract. Typically, for software licensing and services contracts, KPIs would relate to software uptime and availability, response times for technical support, successful delivery of software updates, and potentially metrics related to the effectiveness of the software in supporting FAA's mission objectives (e.g., improved data analysis speed, enhanced decision-making capabilities). The contract's Statement of Work (SOW) and any associated Performance Work Statement (PWS) would outline these measurable outcomes and the methods for tracking performance. The contracting officer's representative (COR) would be responsible for monitoring these KPIs.

How has federal spending on software publishers like Palantir evolved over the past five fiscal years?

Federal spending on software publishers has generally seen a consistent upward trend over the past five fiscal years, driven by digital transformation initiatives, modernization efforts, and increasing reliance on data analytics and AI. Agencies across the government are investing heavily in software solutions to improve efficiency, enhance security, and gain deeper insights from vast datasets. While specific figures for Palantir would require detailed analysis of contract awards, the overall market for advanced data analytics and AI platforms has grown substantially. This growth is fueled by the need for sophisticated tools to manage complex information, support decision-making, and address evolving national security and operational challenges. Agencies are increasingly looking for integrated platforms that can handle diverse data sources.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 518 17TH ST STE 1015, 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: $8,484,927

Exercised Options: $5,543,364

Current Obligation: $5,543,364

Actual Outlays: $3,663,608

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 47QTCA24D004L

IDV Type: FSS

Timeline