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$20 billion startup Palantir has claimed victory in its unusual lawsuit against the US Army

Peter Thiel

Neilson Barnard/Getty Images for New York Times

Palantir founder Peter Thiel.

On Monday, big-data startup Palantir claimed victory in its unusual lawsuit against the U.S. Army.

Palantir has sued the US Army, alleging the Army was using a biased bidding process.

It argued that the way the US Army wrote its requests for proposal to build the Army’s next-generation intelligence system, the Distributed Common Ground System, lent itself to the Army’s favorite go-to military contractors and basically precluded existing commercial products such as Palantir’s.

The judge’s verbal ruling on Monday for the most part agreed, and put Palantir back in the running to win a project that could be worth over $200 million dollars. 

The ruling was issued verbally on Monday. U.S. Court of Federal Claims Judge Marian Blank Horn said in Washington during a hearing, as Bloomberg’s Andrew Harris reports:

“You do have to follow the dictates of the statute. The statute is not meaningless.”

While lots of companies file complaints after a government contract is awarded, this suit is unusual because it is challenging the bidding process itself before the next phase of the contract is awarded, Bloomberg’s Lizette Chapman reports. Palantir sued in June. 

The Army has been developing this system for more than 15 years, at a cost of more than $6 billion, Harris reports. In Court documents, Palantir argued that the Army was behaving wrongfully by “refusing to allow Palantir to bid, by resisting innovation, by insisting on the failed approach of DCGS-A1.” 

It also said in its complaint, “These DCGS program owners seem more intent on protecting their own failed program than on adopting a far superior commercially available technology that has been proven to work.”

One of Palantir’s lawyers, Hamish Hume, a partner in the law firm of Boies, Schiller & Flexner, said in an emailed statement.

“This is a landmark ruling that breathes life into a law that has been ignored for far too long. As the Court held, the law requires the government to make every effort to acquire the best available commercial technology, rather than try to reinvent technology that already exists. This decision is a victory for taxpayers, whose money has been routinely wasted on lengthy and ineffective development efforts. Secretary of Defense Ash Carter and Secretary of the Army Eric Fanning have called on the Pentagon to embrace innovation, not resist it, and this court ruling gives innovators like Palantir a fair chance to compete.”

Palantir is a startup co-founded by venture capitalist billionaire Peter Thiel, a man whose political views have been at the center of some controversies over the years. That includes encouraging young people to skip the expense of college and found startups  backing a floating, isolated city, and secretly bankrolling Terry Bollea (Hulk Hogan’s) lawsuit that sent Gawker into bankruptcy. He famously identifies himself as a Libertarian and he’s an ardent and vocal supporter of Donald Trump.

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