MOD confirms Palantir contract was direct award

The Ministry of Defence has confirmed that its agreement with Palantir Technologies for defence data analytics capabilities was awarded through a direct award process under the Procurement Act 2023, citing a lack of viable alternatives and the need to maintain compatibility with existing systems.

In response to written parliamentary questions from Liberal Democrat MP Martin Wrigley, Defence Minister Luke Pollard said the department let the “Palantir Enterprise Agreement” contract in accordance with the Procurement Act 2023, using direct award powers set out under Section 41, Schedule 5.

Pollard said the MOD relied on two specific justifications.

The first was Paragraph 6, which allows a direct award where “due to an absence of competition for technical reasons, only a particular supplier can supply the goods, services or works required,” and where “there are no reasonable alternatives to those goods, services or works.”

The second was Paragraph 7, which allows a direct award where the contract involves continued supply by an existing supplier, intended either as an extension or partial replacement of existing services, and where changing supplier would create compatibility issues.

Pollard said the justification applied because “a change in supplier would result in the contracting authority receiving goods, services or works that are different from, or incompatible with, the existing goods, services or works,” and that such a change would lead to “disproportionate technical difficulties in operation or maintenance.”

The minister also sought to address concerns over potential conflicts of interest.

Pollard stated that the MOD could confirm “no Ministers and former officials with prior links to Palantir were involved at any stage of that process,” adding that the decision to award the contract was made by the Secretary of State for Defence.

In a separate written response, Pollard said the department conducts continuous conflict-of-interest assessments for all individuals involved in MOD commercial activity.

He added that the MOD also carries out “comprehensive due diligence” when notified of business appointments that may raise concerns, and pointed to the department’s Business Appointments Policy under JSP 492, which sets out the process for assessing such cases.

According to Pollard, where concerns are identified the MOD can impose conditions on individuals, including restricting the sharing of information, prohibiting lobbying activity for a defined period, placing restrictions on advising on ongoing commercial activity, and requiring clearance for any ongoing commissions.

He said the conditions and timeframes applied depend on the seniority of the individual involved and the nature of the appointment, adding that the MOD continues to work to ensure these processes are properly managed and enforced.