The U.S. Court of Federal Claims on Monday issued an oral ruling in Palantir's favor, saying the Army violated a 1994 law that requires government agencies to conduct market research to identify acceptable commercial options for purchasing needed products before undertaking any projects.

Lawsuits against the government are often filed by unsuccessful bidders, but in the case of Palantir, the reason for the lawsuit was the actual inability to participate in the tender. We are talking about a project to develop the army's Distributed Common System (DCGS), created 15 years ago to collect and analyze all kinds of intelligence information and used in combat operations.

Palantir's lawsuit states that the DCGS system is not up to the task and the military has announced that it is looking for a contractor to modernize the system. But the solution developed by the company, capable of meeting the needs of the army, was not allowed to tender. Palantir is only claiming part of the upcoming work, and the cost of this part, according to the company's lawyer, should be about $200 million.

“This legal victory is important not only for Palantir, but also for taxpayers,” Hamish Hume, an attorney representing the plaintiff at Boies, Schiller & Flexner, said at a conference after the hearing.

An Army spokesman called the ruling a "verbal summary" and said the Army would wait for an official document before taking further steps. “As per established procedure, the Army will act after reviewing the complete document,” the spokesman said.

Palantir's lawyers call the ruling a milestone because it marks the first time that the federal procurement optimization law, passed in 1994 to curb unnecessary government spending, has been invoked. According to Hume, in most cases, companies that carry out government contracts do not dare to sue their potential customer.

Pentagon spokesman Peter Cook said the military department is ready to work more closely with Silicon Valley companies. "The Secretary of Defense believes that the Department must seek opportunities to be more flexible and responsive in its interactions with the private sector, and is committed to maintaining that trend," Cook says.

Palantir software products are designed to analyze large amounts of data. Palantir is one of the most valuable private companies in Silicon Valley, following a funding round in late 2015, investors valued it at $20 billion. The company's clients include government and commercial organizations, including the Defense Intelligence Agency and other branches of the US military. in addition to ground forces. U.S. Special Operations Forces have been using Palantir intelligence software for years.

Palantir's market valuation has come under threat recently. According to the WSJ, some shareholders, including large mutual funds, are selling the company's shares at prices well below the latest valuation. Palantir CEO Alex Karp said in late October that the company was ready to go public.

Translated by Alexander Silonov

Startup Palantir defeated the US Army in court