How Palantir captured the Ministry of Defence

The writer, a former government lawyer, is an FT contributing editor

In November 2022 Palantir was awarded a three-year contract by the Ministry of Defence worth £75.2mn. The tender was not advertised and there was no competition.

At the end of that initial contract, in December 2025, the US data intelligence company was awarded a follow-on three-year contract by the MoD worth £240.6mn — more than three times the value of the initial contract. This was a direct award, again without competition.

How can a supplier obtain a valuable initial contract and then, once in place, manage to multiply the size of a second, unadvertised contract? On the face of it, such awards are against the transparency principles of public procurement.

In 2022, the MoD’s published justification for not advertising the tender was that “only one supplier is capable of delivering the requirement, or due to extreme urgency brought about by unforeseen events”. That contract was stated to be for the provision of “the Palantir software tool-set to accommodate the UK MoD’s demand, at all security classifications, for the next three years in line with data strategies”.

For some reason, the MoD decided that there could be no competition for the provision of such a “software tool-set”. It decided that there was only one supplier anywhere in the world that could meet its needs.

A look at the published 2022 contract (which does not include the schedules to the contract) appears to show that the MoD and Palantir did not publish terms for ensuring competition when the contract came to an end. There is not, for example, an express obligation in the main text of the contract for Palantir to co-operate with any successor — something government departments will sometimes insist upon.

The contract also refers to an exit management plan, although arrangements were not published. We do not know if any meaningful effort was put into compiling such a plan. What we can infer is that if one was provided, it was not robust enough to result in a competition at the end of the first three-year period.

What we do know is that the MoD decided that a further contract could be awarded to Palantir “because MoD’s data analytics capabilities use Palantir data analytics architecture that only Palantir is able [to] licence, and which only Palantir has the design familiarity and technical expertise to fully support”. 

Furthermore, the MoD insisted that “[c]hanging supplier for this requirement would involve rebuild of the underlying data analytics architecture needing support”. It also insisted that other consequences of supplier change were too irksome, such as reaccreditation of the new solutions at the required security levels and retraining of MoD personnel, at significant cost.

The prospect of the MoD becoming beholden to a particular supplier given the circumstances of the unadvertised award in 2022 would have been obvious at the time. Although we do not have sight of the exit management schedule, because it was not published, it is plain that in practice nothing was usefully done during the term of the first contract to ensure that the MoD did not become dependent on its supplier.

This is a public procurement failure. Even if the 2022 contract without any advertisement was justified, the MoD should have been preparing for a competition for the next contract. Instead, Palantir’s tools were embedded in the department and the company was awarded a second contract worth over three times as much as the first.

Indeed, had Palantir suggested 10 times as much, the MoD would have been put in a difficult position. It also looks as if this is not the only Whitehall department facing a so-called land-and-expand tactic by the company.

We cannot know from the public documents whether any other supplier could have provided services against the same specification because no specification has been published. In three years’ time, and in every three-year cycle, it is possible that the same will happen again. Unless evidence to the contrary is provided to the public, it appears as if the government department responsible for defence has commercially surrendered to a single service provider.