A Decision on the Palantir US Army Dust Up Looms
October 28, 2016
I read “Inside Palantir’s War With the U.S. Army.” The article follows a somewhat familiar line of thought about why a Sillycon Valley outfit wants to take the US Army to Federal court.
One of the major reasons, according to the article, is choice of clothing. I highlighted this passage:
The slacks and dress shirts with a few buttons undone that Palantir executives wore may have been a step up for sunny California where hoodies are the norm but were a sign of disrespect at the Pentagon, according to a person familiar with the meeting. Senior officials, including U.S. Assistant Secretary of the Army for Acquisition, Logistics and Technology Dean Popps, were not impressed, this person said. They told Palantir: “Don’t come to the E-ring without a tie unless your name is Gates or Buffet,” said the person, referring to the portion of the Pentagon occupied by senior officials. “They couldn’t get over the tie thing. They didn’t care about the technology.”
The culture disconnect between the Silicon Valley type and the Department of Defense type is real. The externalities of uniforms versus business casual are easy to spot. I read:
Because Palantir wasn’t able to show how its technology could work with the Army’s existing intelligence systems—the purpose of conducting both tests—it was sidelined from competing for a new contract and pigeonholed by Army officials as a niche player, Palantir claims in the documents.
One question is, “Why wasn’t Palantir able to show interoperability?” From my vantage point in Harrod’s Creek, I thought that this question was an important one. I wandered around my mental filing cabinet for some angles on this question about “Why?”
The decision about the Palantir –US Army legal matter may be made public on October 31, 2016. That’s Halloween in the US. Will Palantir be treated with a favorable decision with regard to its efforts to license Gotham to the US Army? Will Palantir be tricked by the legal maneuvers of US government legal eagles?
Three points struck me as I reflected:
First, Palantir Technologies was funded in part by In-Q-Tel. Some folks in the CIA love In-Q-Tel’s investments. Some folks point out that In-Q-Tel often gee whiz but often difficult to integrate into what are called “as is” systems. Most vendors make it difficult to integrate certain types of operations, data, or functions with their “as is” systems. The idea of open interchange of information is talked about and enshrined in SOWs (statements of work) but the reality is to keep the “as is” folks contracting for lucrative integration work. As logical as “snap in” and “seamless interchange” are in go go Palo Alto / Berkeley mindset, the “as is” crowd is a reluctant bride in many procurements, particularly multi-year deals.
Second, the Pentagon professionals have specific rules to follow when it comes to licensing software. For a company focused on being disruptive with gee whiz technology the rules are “not logical.” Software, for example, has to be free from backdoors. Software has to conform to various features and functions set forth in an SOW. Software has to be more than just disruptive, pretty, or state of the art. The software has to arrive via a process and be accompanied with people who can work within the often illogical rules of the US government. In my experience, this notion of “conforming” is one that does not compute for Googley-type companies.
Third, the Pentagon and others involved with large government contractors could not isolate themselves from i2 Group’s claim that Palantir Technologies allegedly took steps to obtain i2 Group’s trade secrets for Analyst’s Notebook. (Note: I was a rental assisting i2 Group’s Mike Hunter years ago.) The case was settled and the decision sealed. IBM bought i2 Group, and IBM continues to provide the i2 technology to the US government. Analyst’s Notebook continues to be an important tool for many US government agencies. Is the lack of seamless connectivity referenced in the Bloomberg article a downstream consequence of that i2-Palantir dust up? Did the legal fight alter some individual perceptions of Palantir Technologies and its approach to business?
The write up by Bloomberg states:
Palantir alleges in its suit that it was never given the chance to prove it could. The Army set up two technical evaluations of Palantir’s technology—one that was planned for 2009 and another in 2011. But the agency canceled both, and now Palantir is claiming that the Army did it to block them. Palantir claims that by 2012, staff members of the Army had an “entrenched animosity towards Palantir.”
I am not sure clothing is at the root of the issue. I expressed similar misgivings with the Washington Times’ article which Beyond Search commented upon in “Palantir Technologies: An Overview of What Looks Like a Multi Front War.” That “real news” outfit identified a civilian, now working at General Dynamics, as the individual, the prime mover, the “problem” Palantir alleges it has experienced. I pointed out that for one of my government jobs for the White House, the president of the United States could not sign off on my invoice. I assume that the Washington Times is confident that a single person can prevent the US Army procurement process from approving contracts for a single vendor. I do know that a failure to follow the rules can nuke a deal without warning. I have a hard time believing that Ms. Schnurr, the civilian identified in the Washington Times’s article could consistently derail procurements. If she were this powerful, she is not just an excellent executive; she is a mega black swan.
The Bloomberg write up points out that a decision about the Palantir – US Army matter will arrive on Monday, October 31, 2016. I highlighted this statement from Doug Philippone, the former Joint Special Operations Command commander heading up Palantir’s Pentagon unit:
We will take it all the way to the end. It’s that important. We aren’t going away.
I admire the “can do” attitude. The procurement process is an enemy for many vendors. When I worked at Halliburton Nuclear and Booz, Allen, I recall many of my colleagues bad mouthing the US government procurement processes, but I can’t recall an individual being the focal point for the frustration of the capture team.
For Booz Allen & Hamilton (before the firm fragmented itself), Losing US Department of the Navy deals were worse than getting kicked out of one’s country club. Why was losing a Navy contract a downer at BAH? In 1940, the firm was hired to help the United States Secretary of the Navy with World War II preparations. If my memory is correct, the managing partner was James L. Allen, one of the founders of Booz, Allen. In short, losing a Navy contract is not part of the BAH legacy and not a career plus. Losing bids and contracts was never the result of a single person’s actions. In most cases, Booz Allen made a misstep in responding to the SOW, the technology proposed or used, or the pricing. To fail where James L. Allen succeeded was stressful. Not even Mr. Allen’s legacy could reverse some missteps.
Palantir is not a Booz, Allen. Palantir does not have the heritage, procedures, methods, and reputation of established US government vendors like IBM, Northrop Grumman, Raytheon, and similar firms. Another high tech firm decided to chase US government contracts. Fast Search & Transfer teamed up with AT&T. That tactic worked until Fast Search’s technology failed to meet the requirements set forth in the statement of work.
Palantir Technologies like many Silicon Valley-type firms, takes its inspiration from logical reasoning (our software is great, therefore, the US Army should use it, not DCGS which is not great), Google methods (do not ask permission, apologize later), venture capital infused advisors (we are the masters of the universe), or Larry the Cable guy (git ‘er done).
As I have said, aggressiveness is useful in some situations. In other situations, different tactics are necessary. My personal view is that Palantir may have to rethink its approach to non-CIA opportunities. The US government, particularly the intelligence and military entities, are not homogeneous even though procurement regulations provide a common fabric. But I personally think it may be too late for Palantir to repair its relationship with some units of the US government. The mythology of the Shire and the Hobbits may be too deep rooted at Palantir. I know the US Army is unlikely to change quickly.
To sum up, the Palantir Technologies’ matter is an interesting one to observe. Regardless of the decision which may or may not be released on All Hallows’ Eve, the tricks and treats will arrive for months, perhaps years. For Palantir, a favorable or unfavorable decision will have an impact on Palantir’s contract capture methods.
Stephen E Arnold, October 28, 2016
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