"providing valuable support to improve efficiencies with the defense industrial base," reads a Defense Department memo — a line that now accompanies a fresh, no-bid commitment to Palantir's software.
Deputy Defense Secretary Steve Feinberg's memo
A memo viewed by Washington Technology and issued by Deputy Defense Secretary Steve Feinberg directs DOD departments to "identify options for more spending on Palantir products" for periods after March 31, 2027. Specifically, Feinberg ordered agencies to find uses for the company's software from April 1, 2027, through Dec. 28, 2028. The memo characterizes Palantir's software as "providing valuable support to improve efficiencies with the defense industrial base," citing examples such as flagging delays in munitions and delivery-vehicle production and maintenance.
The memo does not name specific contracts or acquisition vehicles tied to that direction; the source notes simply that Feinberg made no mention of specific contracts or vehicles.
Dollar commitments: $243.9 million now, larger deals in the background
The Pentagon has pledged to pay Palantir up to $243.9 million to use its software through March 31, 2027. That commitment arrives after a separate, larger action in July — a 10-year, $10 billion Army agreement that consolidated many of Palantir’s existing contracts into a single pact. Together, those decisions sit alongside GovTribe data showing Palantir has received $3.2 billion in contract obligations since 2024, roughly half of it through no-compete contracts.
Palantir's recent financial reporting underscores the federal role in its growth: the company reported second-quarter revenues of $1.9 billion, up 93 percent year-over-year, with federal contracts accounting for $809 million of that total — up 90 percent from the prior year. Reflecting those gains in the contracting marketplace, Palantir rose to No. 40 on the 2026 Washington Technology Top 100, climbing 22 spots in a year.
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Protect the town officeNo-compete contracting: rising share and the rules that govern it
The Feinberg direction fits into a wider procurement trend: no-compete (sole-source) contracts are growing as a percentage of federal awards. No-compete contracts accounted for 14.8 percent of all awards in the first half of 2026, up from 12.6 percent for the comparable period in 2025. Federal News Radio reported that the Department of Defense said it has issued similar memos involving other companies.
The Federal Acquisition Regulation permits sole-source awards when agencies properly document why a sole-source contract is the best use of federal funds. The regulation lists permissible reasons such as urgency, the existence of only one responsible source, critical follow-on work, and national security. Feinberg's memo, as reported, mentions none of those standard justifications for directing spending to Palantir.
Palantir's federal footprint: Agriculture, Army, and beyond
Palantir's portfolio of no-compete contracts stretches beyond the Defense Department. The company has an Agriculture Department award for the One Farmer, One File program, and the department also used Palantir's software for its return-to-the-office initiative, according to the reporting. Within the Defense Department itself, the recent Army agreement consolidated many existing deals into the single 10-year, $10 billion vehicle referenced above.
What this means for the Department of Defense, the Agriculture Department, and procurement leaders
- Department of Defense: Feinberg's directive instructs departments to identify options for continued Palantir use between April 1, 2027, and Dec. 28, 2028, signaling institutional momentum to maintain or expand the company's footprint while leaving specifics — and the basis for sole-source awards — unspecified in the memo.
- Agriculture Department: The department already has at least one no-compete award with Palantir, the One Farmer, One File program, and has used Palantir software for return-to-office efforts, showing application of the company's tools in non-defense federal missions.
- Procurement leaders: The growth in no-compete contracting — 14.8 percent of awards in H1 2026 versus 12.6 percent a year earlier — and large consolidation vehicles like the Army's 10-year, $10 billion agreement present competing pressures: keep mission continuity through familiar vendors, or adhere tightly to FAR documentation when sole-source routes are used.
The memo places a spotlight on two facts that will shape follow-on scrutiny: a specific, near-term pledge of up to $243.9 million to use Palantir's software through March 31, 2027, and a directive to explore additional spending options for the April 2027–December 2028 window without naming acquisition vehicles or invoking the Federal Acquisition Regulation's traditional sole-source rationales. How individual DOD components document and justify any expanded commitments between those dates will be the next visible steps in a contracting pattern that has already produced sizable obligations to the company.
