Army illegally barred Silicon Valley company from proposing software add-on: Judge

A federal judge has accused the Army of acting “arbitrarily and capriciously” and violating the law when it excluded a Silicon Valley firm from proposing its add-on for a battlefield intelligence data processor.

Federal Claims Judge Marian Blank Horn issued a written opinion this week after ruling from the bench on Oct. 31. She said the Army illegally prevented Palantir Technologies from offering its commercial data management platform for a new version of the Distributed Common Ground System.

Judge Horn said the Army failed to follow a 1994 federal law directing agencies to consider already developed systems to avoid the cost and time of researching and building an entirely new one.

“In sum, the Army had a statutory obligation to consider commercial items before issuing the development solicitation and failed to do so,” the judge said in her more detailed written opinion.

Palantir was co-founded by Silicon Vally entrepreneur Peter Thiel, a prominent backer of President-elect Donald Trump. Headquartered in Palo Alto, California, Palantir developed its Gotham computer software system that helps police, intelligence agencies and the military store, retrieve and analyze huge amounts of data.

Military intelligence officers, for example, can submit the names of Taliban insurgents and retrieve information linking them to terrorist cells, locations and past attacks.

The Army for years has fought Palantir’s efforts to become a mainstay in the service’s own computing system, preferring to develop it through defense contractors.

Last year, when the Army issued solicitations for a new edition of the common ground system, it specifically excluded Palantir and other off-the-shelf providers.

The company filed suit, and Palantir’s lawyers began deposing Army top brass to expose their bias against commercial products and to show that its data management network could be integrated into the common ground system.

“The total absence of any discussions regarding commercial items, or possible modifications to commercial items, reinforces the court’s understanding that the Army was focused on a developmental approach to the DCGS-A Increment 2 at an early point in the procurement process, to the exclusion of commercially available alternatives,” Judge Horn wrote. “Therefore, the Army did not comply with the requirements of [the law].”

By ignoring that part of the law, the Army acted “arbitrarily and capriciously and in violation [of the law] by neglecting to fully investigate possible commercially available alternatives to meet the requirements of the Army’s acquisition,” she said.

The judge issued an injunction preventing the Army from proceeding with Increment 2 until it “properly and sincerely” complies with the law’s market research obligation.

The Army has declined to comment on the ruling, which was a victory not only for Palantir but also Rep. Duncan Hunter, California Republican.

He has pushed the Army to let soldiers use Palantir in battle, pointing to internal memos from commanders who complained about the common ground system and praised the Palo Alto machinery.

“The Army is still trying to process this whole thing,” said Mr. Hunter’s chief of staff, Joe Kasper. “They screwed up, and it’s not just Hunter telling them anymore — it’s a federal court. Luckily, we have good leaders in the Army under General Mark Milley [Army chief of staff] and General Bob Ashley, who is overseeing the program, and there’s no doubt they’ll use this whole experience to make the right improvements.”

 

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