A Pentagon memo directs up to $244 million for Palantir and calls for additional funding through 2028, raising transparency and competition concerns.
The Pentagon wants to steer hundreds of millions of dollars to Palantir — with the prospect of more in the coming years — without specifying how the money will be used, according to a draft Defense Department memo obtained by Federal News Network.
Deputy Defense Secretary Steve Feinberg on Aug. 4 instructed the Pentagon’s acquisition boss and comptroller to spend up to $244 million on Palantir’s services until the end of March 2027. The memo also tells the armed forces to find ways to fund the data analytics giant’s work as needed from April 2027 to December 2028.
“Palantir is providing valuable support to improve efficiencies with the defense industrial base,” Feinberg wrote. “Their efforts are improving Department of War and prime contractor understanding of delays in production and maintenance of critical munitions and delivery vehicles, which are already resulting in process improvements.”
A DoD official described the memo as a planning directive that reflects the work of Business Operators for National Defense, the initiative Feinberg created in February to give private-sector leaders a hand in defense acquisition reform. The Pentagon said earlier this year it sought about 250 industry executives to participate in BOND.
“The Department routinely issues similar funding and planning memos across a wide range of our industry partners to address procurement modernization and scaling,” the official said in an email Tuesday. “This is not exclusive to any single vendor — instead, it is a deliberate approach to connect defense industry leaders with the Department of War to accelerate production timelines.”
The official did not immediately answer Tuesday how many similar memos the department has issued or to which companies.
Palantir — perhaps best known for Maven Smart System, the AI-powered targeting software it took over from Google — is among the major technology firms DoD has tapped to inject artificial intelligence across the department, from back offices to the battlefield. That has prompted a steady stream of lucrative contracts, including a massive Army software and data-management agreement worth up to $10 billion over 10 years.
The company did not respond to a request for comment.
Aalok Mehta, head of the Wadhwani AI Center at the Center for Strategic and International Studies in Washington, said the letter appears to be the Pentagon’s next steps to implement programs like Maven, which can also identify supply chain and logistical bottlenecks.
Palantir’s Warp Speed system is also designed to connect defense manufacturers and their suppliers for better coordination and greater visibility into data like parts availability. Major weapons builders, including Boeing and L3Harris, have adopted Warp Speed to improve production.
But Feinberg’s letter stops short of naming particular programs or contracts the money could support over the next two-and-a-half years, raising concerns that defense officials could be circumventing federal rules meant to boost transparency and cut down on waste.
“This memo is alarming in that it expresses the intention of entering into a sole-source contract without any reference [to] the need to comply with requirements for competition,” said Greg Williams, director of the defense program at the Project on Government Oversight.
Though Feinberg may be asking subordinates for ideas, Williams said, he should also explain why DoD would fund Palantir without considering other contractors.
The directive comes as military operations in Iran have depleted critical U.S. munitions stockpiles, spurring DoD to press industry leaders for plans to aggressively ramp up production.
Palantir attended a White House meeting last month where Trump administration officials urged defense companies to lobby lawmakers for higher defense spending through the budget reconciliation process, according to The Washington Post.
Executive Editor Jason Miller contributed to this story.
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