Pentagon Eyes $244M No-Bid Deal with Palantir to Solve Production Lag

The U.S. Department of Defense is weighing a significant investment in Palantir to address bottlenecks in the production and maintenance of vehicles and munitions, as The Register first reported. According to an internal memo obtained by the outlet, Deputy Secretary of Defense Stephen Feinberg has directed subordinates to purchase up to $243.9 million in services from the AI data analytics firm through March 31, 2027.

The proposed arrangement would function as a sole-source or no-bid consulting contract. The memo further instructs senior Pentagon leaders, including the Under Secretary of Defense for Comptroller and the Undersecretary of Defense for Acquisition and Sustainment, to identify additional funding options to extend the relationship through December 31, 2028.

While the Department of War (the current designation for the DoD under the Trump administration) describes the directive as standard practice to accelerate production timelines via Business Operators for National Defense (BOND), the move has drawn scrutiny. Greg Williams, director of the Center for Defense Information at the Project On Government Oversight (POGO), told The Register that a lack of written justification from a contracting officer in the memo is notable, as statutory requirements typically demand competitive bidding.

Palantir has a history of high-value government engagements, including a $30 million no-bid ICE contract and a $10 billion deal with the Army signed last year. The company also reportedly received a no-bid USDA contract starting at $3.9 million that could reach $13.3 million.

Political ties to the firm are prominent: co-founder Peter Thiel is a major Trump donor, and Vice President J.D. Vance was mentored by Thiel. Additionally, a 2025 certified annual financial disclosure report for President Donald Trump shows an investment of at least $1 million in Palantir Technologies.