The Army collapsed 75 data and software contracts into one deal potentially worth $10 billion—a deal won by Palantir—and it’s just the beginning of how the service wants to buy software.
“This is going to be one of many enterprise licensing agreements that we’re looking at entering into,” Army CIO Leonel Garciga told reporters.
The goal is to reduce costs, while making it easier to buy software and getting the functions the service needs “on demand.”
“We have a lot of big software packages that are out there. They’ve been bought over several years, several program offices, several commands [and] not getting a lot of parity across the board on how they’re being delivered. Adding a lot of complexities,” Garciga said. “But our intent is to continue to move down this path, to really focus on reducing that complexity, adding agility to how we buy….[and] save taxpayer dollars as much as we can.”
The contract announced late Thursday has a $10 billion cap with a 10-year performance period and allows the Army and, potentially, other Defense Department agencies, to buy Palantir products, including AI tools and data analytics. It also deepens the company’s already close relationship with the Army and Pentagon.
“We’ve got a plethora of Palantir employment inside the Army—everything from Army intel data platform to Vantage to much smaller projects…that we’re paying for that we would be using this vehicle to also procure,” Garciga said.
The Army is working with other vendors on similar contracts, he said.
The service has been working to simplify its IT contracts and streamline how it buys software in recent years. But the Palantir award and new approach comes after Defense Secretary Pete Hegseth called for new software acquisition practices earlier this year.
“We have been working on this since November of last year, and I think that there was just an inherent understanding, you know, almost two years ago now, that we needed to start moving in this direction with a handful of our vendors,” Garciga said.
Still, he said, the secretary’s memo has been a “catalyst” for some “commercial partners to rethink the way that they integrate and work with us in the government, and what our contractual agreements are going to look like moving forward.”
Danielle Moyer, the executive director at Army Contracting Command, said it’s part of a “common-sense” effort to make sure the Army doesn’t have duplicative contracts.
“If I have more than one contract with the same vendor, have I bought the same thing more than once in a different way or at a different price?” Moyer said.
The effort, which starts with this giant award to Palantir, is to “make sure we’re getting the best discount.”
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