Give Palantir up to $244m through 2028, says internal Defense Department memo

Deputy Secretary of Defense Stephen Feinberg has drafted a memo directing Pentagon officials to procure up to $244 million in services from AI data analytics firm Palantir through March 2027, without competitive bidding. The August 4, 2026, memo appears to be a sole-source contract, though it's unclear if it has been finalized. Palantir has previously benefited from several no-bid contracts, including with USDA and ICE, and a $10 billion Army deal over ten years.

The memo instructs senior Pentagon leaders and field activity directors, including the Undersecretary of Defense for Acquisition and Sustainment and Under Secretary of Defense for Comptroller, to seek alternative funding options for the period April 1, 2027, to December 31, 2028. The memo cites Palantir's value in improving defense industrial base efficiency and understanding production and maintenance delays for munitions and vehicles.

Critics argue that the Defense Department is required to use competitive contracting practices, and the lack of justification in the memo suggests either unawareness of the statutory requirements or lack of importance placed on reminding subordinates of the need for justification. Senator Elizabeth Warren has urged Feinberg to address conflicts of interest related to current Defense Department contracts, mentioning her letter urging him to cut ties with his former firm, Cerberus Capital Management, recuse himself from Cerberus-related matters, and increase transparency of contracting decisions for the Golden Dome missile defense program.

Palantir was co-founded by Peter Thiel, a major Trump donor, and Vance is a Thiel protégé. The Department of War official stated that this is standard practice reflecting operational-level engagements with industry partners to accelerate production timelines.