Reports emerged on Aug. 13 that Deputy Secretary of Defense Stephen Feinberg, who came to the Pentagon from Cerberus Capital Management, issued a memorandum, dated Aug. 4, directing acquisition officials to award $244 million in Pentagon contracts to Palantir through March 31, 2027 without any competitive bidding. The memo calls for what would effectively be a sole-source or no-bid consulting contract, reported The Register. Its subject line is “Funding Palantir.” Addressed to senior Pentagon leaders and field activity directors, and, specifically, to the Undersecretary of Defense for Acquisition and Sustainment, and the Under Secretary of Defense (Comptroller), the memo further directs those individuals to work with military leaders to identify further funding options covering the period from April 1, 2027, through December 31, 2028.
The memo states that Palantir “is providing valuable support to improve the efficiencies with the defense industrial base” and is helping the Defense Department better understand delays in the production and maintenance of munitions and vehicles, The Register reports further. So, the Defense Department intends to continue funding that relationship until near the expected season finale of the Trump administration.
Greg Williams, director of the Center for Defense Information at the Project On Government Oversight (POGO), told The Register that the Defense Department generally is required to use competitive contracting practices. “Exceptions to this requirement are defined under 10 USC 3204,” Williams explained. “That same statute states that the head of an agency ‘may not award a contract using procedures other than competitive procedures unless… the contracting officer for the contract justifies the use of such procedures in writing and certifies the accuracy and completeness of the justification.’” The memo makes no reference to these requirements.
Nextgov adds that the Feinberg memo appears to be part of a trend in federal contracting, where no-compete contracts are growing as a percentage of all awards. No-compete contracts accounted for 14.8% of all awards in the first half of 2026, compared to 12.6% for the same period in 2025. According to GovTribe data, Palantir has received $3.2 billion in contract obligations since 2024,— and roughly half of those dollars came through no-compete contracts.
