GAO DCGS Letter B-412746
June 1, 2016
A few days ago, I stumbled upon a copy of a letter from the GAO concerning Palantir Technologies dated May 18, 2016. The letter became available to me a few days after the 18th, and the US holiday probably limited circulation of the document. The letter is from the US Government Accountability Office and signed by Susan A. Poling, general counsel. There are eight recipients, some from Palantir, some from the US Army, and two in the GAO.
Has the US Army put Palantir in an untenable spot? Is there a deus ex machina about to resolve the apparent checkmate?
The letter tells Palantir Technologies that its protest of the DCGS Increment 2 award to another contractor is denied. I don’t want to revisit the history or the details as I understand them of the DCGS project. (DCGS, pronounced “dsigs”, is a US government information fusion project associated with the US Army but seemingly applicable to other Department of Defense entities like the Air Force and the Navy.)
The passage in the letter I found interesting was:
While the market research revealed that commercial items were available to meet some of the DCGS-A2 requirements, the agency concluded that there was no commercial solution that could meet all the requirements of DCGS-A2. As the agency explained in its report, the DCGS-A2 contractor will need to do a great deal of development and integration work, which will include importing capabilities from DCGS-A1 and designing mature interfaces for them. Because the agency concluded that significant portions of the anticipated DCSG-A2 scope of work were not available as a commercial product, the agency determined that the DCGS-A2 development effort could not be procured as a commercial product under FAR part 12 procedures. The protester has failed to show that the agency’s determination in this regard was unreasonable.
The “importing” point is a big deal. I find it difficult to imagine that IBM i2 engineers will be eager to permit the Palantir Gotham system to work like one happy family. The importation and manipulation of i2 data in a third party system is more difficult than opening an RTF file in Word in my experience. My recollection is that the unfortunate i2-Palantir legal matter was, in part, related to figuring out how to deal with ANB files. (ANB is i2 shorthand for Analysts Notebook’s file format, a somewhat complex and closely-held construct.)
Net net: Palantir Technologies will not be the dog wagging the tail of IBM i2 and a number of other major US government integrators. The good news is that there will be quite a bit of work available for firms able to support the prime contractors and the vendors eligible and selected to provide for-fee products and services.
Was this a shoot-from-the-hip decision to deny Palantir’s objection to the award? No. I believe the FAR procurement guidelines and the content of the statement of work provided the framework for the decision. However, context is important as are past experiences and perceptions of vendors in the running for substantive US government programs.
In my experience, Palantir’s history may have had cast a shadow over this particular contracting task. In my view, Palantir’s dust up with i2 Group, which is now owned by IBM, and the difficulty of moving Palantir outputs to IBM i2 Analyst Notebook and from IBM i2 Analyst Notebook to Palantir Gotham add some friction to the work flow of some US government personnel.
And Palantir is a Silicon Valley outfit with offices in the DC area. The culture and staff behaviors of the company remind me of Google-type outfits. I was working in DC on the day Sergey Brin showed up at Capitol Hill wearing casual clothing. The news diffused quickly to the unit of the White House where I had my tan cube. Silicon Valley style stood out like a tuxedo at the Louisville Athletic Club. Palantir’s insouciance, like Mr. Brin’s T shirt, attracted attention from those in the green corridors.
Also, Palantir has used a direct approach to some information analysis tasks. There has been chatter about Palantir Forward Deployed Engineers making trial versions of its system available to certain government entities. The FAR procedures are not clued into the Google-style approach to diffusing technology. I am reminded of the “easier to apologize than ask for permission” approach I have witnessed first hand at some Silicon Valley outfits.
Then there is the often pointed discussion of DCGS in Congress. One elected official has championed commercial off the shelf Palantir-type solutions. The logic of the elected official is sound. Why not use a commercial product that works instead of following the traditional approach to government software? (See “Army Tells Officers to Battle Duncan Hunter over Battlefield Intelligence System.”)
The US Army wants to continue its established processes. Well-entrenched government contractors are integrating, federating, and coding a cloud, eCommerce, and widget-centric approach system to integrate many disparate sources of electronic information. With billions invested since the late 1990s, DCGS is geared up for its next phase of development.
Perhaps Palantir’s early interaction with the In-Q-Tel helped create what I call the “US Army versus Palantir” situation which seems to be a factor. Palantir did receive a contract worth $200 million to provide technology and services to Special Operations Command. But the millions from SOCOM are modest compared to the amount of money to be spent for the DCGS system.
From my vantage point in rural Kentucky, I see several questions to be resolved by those younger and closer to the action in the Potomac watershed than I:
- Will Palantir find itself paddling its canoe upstream when bidding on DCGS work?
- Will Palantir’s patented ontology and open source data management system integrate seamlessly into the DCGS architectures?
- Will the issues raised in Case 1:10-cv-00885-LO –JFA continue to diminish in importance?
- Will Palantir be the vendor of choice if the DCGS increment 2 development falters or fails?
- Will Palantir’s US government revenue find itself constrained due to political and cultural factors; that is, the Silicon Valley culture versus the “inside the Beltway” culture?
- Will Palantir Gotham be positioned in the Department of Defense as a tactical solution to specific operational tasks, not as the significant breakthrough in information management roughly comparable to Google’s impact on Web search?
- Will backers and stakeholders in Palantir reevaluate their position in Palantir if similar lucrative government deals not fall to the In-Q-Tel backed company?
These questions are difficult for me to answer. However, as intrepid millennials with MBAs write their reports about Palantir, more insights will emerge. For now, I think the DCGS project is not following a path those with “seeing stones” could perceive accurately. Life, as I have learned from my work in the US government, does not work like the fictional worlds described by novelists and Silicon Valley visionaries. Less Tolkien and more Parkinson is my experience. The stakes for DCGS program can be measured in billions, which even in the world of Beltway government contractors is real money.
Stephen E Arnold, May 31, 2016
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[…] I read “Army Eyes DCGS Reforms on Capitol Hill.” Not long ago, I described a decision which struck me as putting Palantir in a checkmate position. This write up explains that Palantir does have a deus ex machina to help it prevail in its DCGS travails. You can review my earlier write up and the GAO’s decision in “GAO DCGS Letter B-412746.” […]