A memo from the Pentagon instructs staff to allocate $244 million to Palantir, with the subject line reading "Funding Palantir."

      Government software is typically acquired by soliciting bids from multiple companies. A department outlines its requirements, suppliers compete, and documentation is created to explain why a particular supplier was chosen. However, a memo circulated within the US Defense Department on August 4 deviated from this norm by identifying the supplier upfront.

      US Deputy Secretary of Defense Stephen Feinberg instructed subordinates to procure services from Palantir worth up to $243.9 million by March 31, 2027, without a competitive bidding process, as reported by The Register. The subject line of the memo reads "Funding Palantir."

      The memo does more than specify this amount; it also directs the department's acquisition and comptroller leaders to collaborate with military officials to secure additional funds for Palantir, extending from April 2027 through the remainder of 2028.

      The contents of the memo highlight some points and omit others. The memo notes that Palantir is "providing valuable support to improve efficiencies within the defense industrial base," and it attributes the software’s role in enhancing the department's understanding of delays in the production and maintenance of munitions and vehicles.

      Washington Technology's Nick Wakeman has also examined the memo and pointed out its omissions. Feinberg does not mention any specific contract, contract vehicle, or the legal justification needed to bypass the competitive process. Although justifications for such exceptions exist and are limited, they include urgency, a sole responsible source, critical follow-on work, and national security. The Federal Acquisition Regulation outlines the necessary documentation to support which exception applies.

      An additional curious detail is that the memo is printed on letterhead labeled Deputy Secretary of War, a title used during the Trump administration, although no legal renaming has occurred.

      Greg Williams, director of the Center for Defense Information at the Project On Government Oversight, referred The Register to the applicable law. Competitive contracting is the standard process, with exceptions noted in 10 USC 3204. This statute explicitly requires a contracting officer to provide a written justification for not using competitive procedures and to certify that this justification is complete and accurate.

      Williams suggested that the memo might indicate a deputy secretary soliciting input from subordinates. However, the lack of reference to the requirement for a written justification implies that they may either be unaware of it or believe it unnecessary to mention.

      The department maintains that the memo represents standard operating procedure. A Department of War representative informed The Register that it is “standard practice” and part of engagement efforts managed through a program called Business Operators for National Defense. Memos of this nature are disseminated “across a wide range of our industry partners” and are “not exclusive to any single vendor.” Palantir did not provide a comment when approached.

      The relevant figure in the memo's context is not the $243.9 million, but the overall financial situation of Palantir's federal dealings. Since 2024, the company has secured $3.2 billion in federal contract obligations, as reported by GovTribe data cited by Washington Technology, with nearly half of that amount coming from non-competitive contracts.

      These include an award from the Agriculture Department for a farm data initiative and another for the same department's return-to-office efforts. Additionally, last year, Palantir finalized an Army enterprise agreement potentially worth up to $10 billion over ten years, which consolidated several existing contracts.

      A broader trend shows that non-competitive awards constituted 14.8% of all federal contract awards in the first half of 2026, compared to 12.6% during the same period in 2025. This underscores a significant shift in how the US government is procuring software.

      Questions regarding ownership are essential and specific details are significant. According to ProPublica’s tracker of Trump appointees, Feinberg’s financial disclosures do not list Palantir, and his former firm, Cerberus Capital Management, also appears to have no stake in the company based on its most recent 13F filing.

      Last month, Senator Elizabeth Warren contacted Feinberg regarding potential conflicts of interest, encouraging him to sever ties with Cerberus and abstain from decisions related to it. Although the letter addressed the Golden Dome missile defense program, it did not involve Palantir.

      On a larger scale, ProPublica's database indicates that at least 100 administration officials have some investment in Palantir. President Donald Trump’s 2025 certified disclosure reflects a holding of at least $1 million in the company. Palantir was co-founded by Peter Thiel, a major donor to Trump and advisor during his first term, and Vice President JD Vance has connections within Thiel’s sphere. While these details create context for the memo, they do not directly pertain to it.

      Palantir is not lacking in clientele. On August 3, the company reported its second-quarter results, revealing a 93% revenue increase to approximately $1.9 billion, while raising full-year projections to