A federal judge has issued an injunction against the U.S. Army in a preliminary ruling that finds the service may have violated a 1994 law that requires the government to give preference to commercial products, before letting expensive contracts for the development and production of new technologies.
The decision was a victory for Palantir Technologies, Inc., a technology firm that sued the Army complaining it could not sell software to the service, because the Army refused to abide by the legal requirement to procure commercial products to the maximum extent practical.
In an oral ruling Monday, U.S. Court of Federal Claims Judge Marian Blank Horn directed the Army to halt its plans to contract for a data management system while it conducts market research and explores whether commercial software, with or without modifications, could meet the Army’s needs at a fraction of the cost and time, according to Palantir’s lead attorney, Hamish Hume.
“This is a great result and a victory, not only for Palantir, but for taxpayers, and our whole procurement system,” Hume told reporters on a conference call after the ruling. “It will avoid this practice of ineffective and lengthy and wasteful spending by ensuring that whenever possible the government will purchase commercial items that already exist.”
Asked for a response, an Army spokesman said he was preparing a statement.
In its suit, Palantir argued the Army wasted $6 billion and 15 years trying to build its own version of a data management platform that still does not work, all while effectively shutting out private companies such as Palantir.
The law in question is the Federal Acquisition Streamlining Act of 1994, which was designed to save the government time and money buying commercial products when they met the needs of the military or other government agency.
Pentagon spokesman Peter Cook said he was unaware of the ruling so would not comment on it directly, but said in principle Defense Secretary Ash Carter supports removing barriers to commercial companies doing business with the Pentagon.
“The secretary does believe that there should be opportunities for the Department of Defense to be more nimble, more agile in terms of its engagement with the private sector, and he’s been supportive of that,” Cook told reporters Monday.
Carter has made outreach to the technology community a centerpiece of his time as Pentagon chief, establishing innovation hubs in Silicon Valley, Boston and Austin to increase ties with private companies operating at the cutting edge of technology.
