DHS Awards $37.8M to Palantir for Falcon O&M Support, Raising Competition Concerns

Contract Overview

Contract Amount: $37,839,725 ($37.8M)

Contractor: Palantir Technologies Inc.

Awarding Agency: Department of Homeland Security

Start Date: 2018-11-28

End Date: 2022-05-27

Contract Duration: 1,276 days

Daily Burn Rate: $29.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: FALCON OPERATIONS AND MAINTENANCE (O&M) SUPPORT SERVICES AND OPTIONAL ENHANCEMENTS

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94301

State: California Government Spending

Plain-Language Summary

Department of Homeland Security obligated $37.8 million to PALANTIR TECHNOLOGIES INC. for work described as: FALCON OPERATIONS AND MAINTENANCE (O&M) SUPPORT SERVICES AND OPTIONAL ENHANCEMENTS Key points: 1. Significant contract value of $37.8 million awarded to a single vendor. 2. Sole-source award to Palantir Technologies Inc. limits competitive pricing. 3. Potential risk associated with limited competition and reliance on one provider. 4. Spending falls within the Software Publishers sector.

Value Assessment

Rating: questionable

The contract value of $37.8 million for Falcon Operations and Maintenance Support Services appears high given the lack of competition. Benchmarking against similar O&M contracts for complex software platforms is difficult without competitive data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This significantly limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive procurement.

Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these services, as there was no market pressure to drive down costs.

Public Impact

Citizens may be paying more for critical immigration enforcement software due to a lack of competition. The long contract duration (over 3 years) locks the government into a single vendor. Transparency in pricing and performance is reduced without competitive bids.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
High contract value
Limited transparency

Positive Signals

Services provided to a critical agency (DHS)
Contract awarded to a known technology provider

Sector Analysis

The Software Publishers sector is characterized by rapid innovation and diverse pricing models. This contract's value of $37.8 million for O&M and enhancements is substantial and warrants scrutiny, especially given its sole-source nature.

Small Business Impact

There is no indication that small businesses were involved in this sole-source contract, suggesting missed opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award raises questions about the effectiveness of oversight in ensuring competitive practices and obtaining the best value for taxpayer dollars.

Related Government Programs

Software Publishers
Department of Homeland Security Contracting
U.S. Immigration and Customs Enforcement Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Vendor lock-in risk.
Limited transparency in procurement process.
Missed small business opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Homeland Security awarded $37.8 million to PALANTIR TECHNOLOGIES INC.. FALCON OPERATIONS AND MAINTENANCE (O&M) SUPPORT SERVICES AND OPTIONAL ENHANCEMENTS

Who is the contractor on this award?

The obligated recipient is PALANTIR TECHNOLOGIES INC..

Which agency awarded this contract?

Awarding agency: Department of Homeland Security (U.S. Immigration and Customs Enforcement).

What is the total obligated amount?

The obligated amount is $37.8 million.

What is the period of performance?

Start: 2018-11-28. End: 2022-05-27.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure fair pricing without competition?

The justification for a sole-source award typically involves unique capabilities or urgent needs. Without detailed documentation, it's difficult to assess if fair pricing was achieved. Agencies should provide robust justification and explore competitive alternatives where feasible to ensure taxpayer value and encourage market innovation.

What are the risks associated with relying solely on Palantir Technologies Inc. for critical Falcon O&M support and enhancements?

The primary risks include vendor lock-in, potential for escalating costs without competitive pressure, and reduced flexibility in adopting alternative technologies. If Palantir's technology or support falters, the agency's operations could be severely impacted, with limited recourse due to the sole-source nature of the contract.

How effectively does this contract support the mission of U.S. Immigration and Customs Enforcement, and is the value commensurate with the expected outcomes?

The effectiveness of the contract hinges on the Falcon system's performance and Palantir's support in enabling ICE's mission. Without competitive benchmarks or detailed performance metrics tied to mission outcomes, it's challenging to definitively state if the $37.8 million value is commensurate. The lack of competition makes assessing value for money inherently difficult.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 70CTD019Q00000001

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 HAMILTON AVE STE 300, PALO ALTO, CA, 94301

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

Financial Breakdown

Contract Ceiling: $37,839,725

Exercised Options: $37,839,725

Current Obligation: $37,839,725

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline