Palantir Usg, Inc. v. United States

REDACTED OPINION

In the United States Court of Federal Claims

No. 16-784C

Filed: November 3, 2016

Redacted Version Issued for Publication: November 9, 20161

* * * * * * * * * * * * * * *

PALANTIR USG, INC., *

* Pre-Award Bid Protest; Cross-

Protestor, * Motions for Judgment on the

v. * Administrative Record;

* Commercial Availability; 10 U.S.C.

UNITED STATES, * § 2377; Bad Faith; Supplementation

* to the Administrative Record;

Defendant. * Permanent Injunction.

*

* * * * * * * * * * * * * * *

Hamish Hume, Boies, Schiller & Flexner LLP, Washington, D.C., for protestor.

With him were Stacey K. Grigsby, and Jon R. Knight, Boies, Schiller & Flexner LLP,

Washington, D.C.

Domenique G. Kirchner, Senior Trial Counsel, Commercial Litigation Branch,

Civil Division, United States Department of Justice, Washington, D.C., for defendant.

With her were Scott A. MacGriff, Trial Attorney, Commercial Litigation Branch, Douglas

K. Mickle, Assistant Director, Commercial Litigation Branch, Robert E. Kirschman, Jr.,

Director, Commercial Litigation Branch, and Benjamin C. Mizer, Principal Deputy

Assistant Attorney General, Civil Division, Department of Justice. Of counsel were Scott

N. Flesch, Major Lawrence P. Gilbert, Evan C. Williams, and Frank A. March, United

States Army Legal Services Agency, and Debra J. Talley and Daniel J. Beuke, United

States Army Materiel Command.

OPINION

1 This opinion was issued under seal on November 3, 2016. The parties were asked to

propose redactions prior to public release of the opinion. This opinion is issued with some

of the redactions that the parties proposed in response to the court’s request. Words

which are redacted are reflected with the notation: “[redacted].”

HORN, J.

Palantir USG, Inc.2 (Palantir) and Palantir Technologies Inc.3 filed a pre-award bid

protest in this court on June 30, 2016, challenging the United States Department of the

Army, Army Contracting Command, Aberdeen Proving Group’s (the agency) Request for

Proposals No. W56KGY-16-R-0001 (the solicitation). Protestor Palantir USG, Inc. “is a

corporation incorporated under the laws of the State of Delaware, having its principal

place of business in Palo Alto, California.” Palantir USG, Inc. and Palantir Technologies

Inc. filed suit in the United States Court of Federal Claims after the United States

Government Accountability Office (GAO) denied Palantir USG, Inc.’s GAO protest. See

generally Palantir USG, Inc., B-412746, 2016 WL 3035029 (Comp. Gen. May 18, 2016).4

As indicated at the GAO, “[t]he solicitation seeks a single contractor to be the

system data architect, developer, and integrator of DCGS–A2 [Army’s Distributed

Common Ground System-Army Increment 2], which is the second increment of the

DCGS–A. DCGS–A is the Army’s primary system for the processing and dissemination

of multi-sensor intelligence and weather information to the warfighter.” Id. at *1.

Palantir asserts that the Army acted arbitrarily and capriciously when it issued the

DCGS-A Increment 2 solicitation for a developmental contract, because Palantir claims it

had identified to the Army a commercially available technology that Palantir believes can

satisfy the Army’s requirements. According to Palantir, “Palantir has developed a

technology that solves the needs of DCGS.” Palantir claims that the data management

platform that Palantir has to offer, also called the Palantir Gotham Platform, was “initially

developed between 2004 and 2009 with the help of an investment from, and a partnership

with, the venture capital arm of the Central Intelligence Agency.” According to Palantir,

since “2010, Palantir has successfully provided the Palantir Gotham Platform to

numerous customers, including federal and local law enforcement agencies, the United

States Marine Corps, the United States Special Operations Command (‘SOCOM’), the

Defense Intelligence Agency, and numerous other government agencies (as well as

numerous private sector companies).” The parties have stipulated that “[t]he Palantir

Gotham Platform is a Data Management Platform that is licensed to customers on a

commercial item basis,” and that “[g]overnment agencies have procured the Palantir

Gotham Platform and related services on a commercial item basis.” Palantir argues that,

2 Palantir Technologies Inc. “owns one hundred percent of the stock” of Palantir USG,

Inc.

3 As discussed below, on August 22, 2016, the court granted defendant’s motion to

dismiss Palantir Technologies Inc. from the above captioned protest.

4 Although the undersigned has high regard for GAO decisions, this court is not bound by

decisions of the GAO. See CBY Design Builders v. United States, 105 Fed. Cl. 303, 341

(2012) (citing Centech Grp., Inc. v. United States, 554 F.3d 1029, 1038 n.4 (Fed. Cir.

2009) (GAO decisions are “not binding” authority, but may be “instructive in the area of

bid protests.”)).

2

as written, “[t]he Solicitation for DCGS-A2 makes it impossible for Palantir to offer its Data

Management Platform as a commercial or nondevelopmental item to satisfy the Army’s

requirements” (capitalization and emphasis removed) because the solicitation only

requested proposals for the development of the required technology.

FINDINGS OF FACT

In explaining the origin and development of the DCGS-A, the contracting officer’s

statement during the GAO protest indicated:

Combat operations in Kuwait and Iraq in the early 1990’s demonstrated the

military potential of information dominance, and sparked a transformation in

the use of information technology in intelligence operations. Subsequently,

the Department of Defense instituted an initiative to unify Intelligence,

Surveillance and Reconnaissance architectures, and enhance the

acquisition of manned and unmanned airborne sensors and associated

ground processing systems. This initiative resulted in a requirement for a

Distributed Common Ground/Surface Systems (DCGS), made up of Army,

Air Force, Navy and Marine Corps ground processing systems that can

share information across the Joint Force. The Army component of DCGS is

the Distributed Common Ground System – Army (DCGS-A). Today, DCGS-

A has become the Army’s primary system for processing and dissemination

of multi-sensor intelligence and weather information. It is deployed

worldwide in support of intelligence operations including all Theaters of

Operation.

The background section of the Performance Work Statement for the solicitation

at issue explained:

The DCGS-A program was created in response to the Department of

Defense (DoD) Distributed Common Ground/Surface System (DCG/SS)

Mission Area Initial Capabilities Document (MA ICD), which captured the

overarching requirements for an Intelligence, Surveillance, and

Reconnaissance (ISR) Family of Systems that will contribute to Joint and

combined Warfighter needs. The MA ICD has since been updated to an

Enterprise ICD. DCGS-A facilitates “Seeing and Knowing” on the

battlefield—the fundamental precursor to the understanding that underpins

the Army’s Mission Command concept. DCGS-A contributes to visualization

and situational awareness (SA), thereby enhancing tactical maneuver,

maximizing combat power and enhancing the ability to operate in an

unpredictable and changing environment throughout the operational

spectrum. It facilitates the rapid planning, execution, and synchronization of

all war fighting functions resulting in the Current and Future Force’s ability

to operate within the enemy’s decision cycle.

3

DCGS-A is the Army’s primary system for processing and dissemination of

multi-sensor intelligence and weather information to the Warfighter. It is

deployed worldwide in support of intelligence operations, including all

Theaters of Operation. DCGS-A must remain interoperable and compatible

with the Joint Command System infrastructure and mission applications.

DCGS-A Increment 1 is the ISR component of the modular and future force

Mission Command System (MCS) and the Army’s primary system for ISR

tasking of sensors, processing and exploitation of data, and dissemination

of intelligence (TPED) information about the threat, weather, and terrain at

all echelons. A high percentage of Increment 2 functionality has already

been developed under the DCGS-A Increment 1 efforts. DCGS-A Increment

2 will leverage the DCGS-A hardware components fielded across the Army

under DCGS-A Increment 1.

According to the defendant, DCGS-A Increment 2, the subject of the solicitation at

issue, “will introduce a new and modernized data management architecture (DMA) using

a modular system approach to perform Army intelligence analysis capabilities.” As

reflected in the Army’s post-hearing comments submitted to the GAO, and quoted in the

GAO decision:

DCGS-A is intended to combine all intelligence software/hardware

capabilities within the Army into one program with the ability to access and

be accessed by, not only Army intelligence and command components, but

also the other members of the broader distributed common ground/surface

system. It is composed of many software products-commercial,

government, and open source-as well as software integration that allows all

the different products and components to communicate and operate

seamlessly.

Palantir USG, Inc., B-412746, 2016 WL 3035029, at *2.

The Performance Work Statement for the solicitation at issue stated that the

requirements of DCGS-A Increment 2 included the “development of new data

architecture, standards based enhanced visualization and analytical tools, cloud

computing and ‘big data’ analytic capabilities; cyber analytics and data integration,

visualization capabilities, Cyber Operations, Interoperability, Counter

Intelligence/HUMINT, Weather, GEOINT, Geospatial Engineering and Sensor

Management,” and that “[t]hese efforts include Software Development, Capability

Enhancements, Integration, Limited Fielding and Training support, Maintenance, and

Support for logistics development, for a period of performance of six years from contract

award.” The draft version of the Performance Work Statement for the solicitation at issue

stated that “[t]he DCGS-A Increment approach utilizes spiral deliveries to maintain

interoperability with Army and Joint ISR [Intelligence, Surveillance and Reconnaissance]

architectures and to address capability insertion and enhancements. This system must

remain interoperable and compatible with the Joint command system infrastructure and

4

mission applications.” As indicated by the contracting officer who issued the solicitation,

“[t]he DMA [i.e., Data Management Architecture] will serve as the architecture foundation

and the heart with which the rest of the capabilities will depend on to function. The DMA

development is therefore the focus of the first task order executed under the DCGS-A

Increment 2 contract.”

The parties have stipulated that “[t]he Palantir Gotham Platform is a Data

Management Platform that is licensed to customers on a commercial item basis,” and that

other “[g]overnment agencies have procured the Palantir Gotham Platform and related

services on a commercial item basis.” As further detailed below, in responses to the

government’s Requests for Information, Palantir explained that “[i]n cooperation with the

government, Palantir fields and manages 25 Palantir deployments at every major Marine

Corps command, representing over 15,000 accounts at peak usage across the Marine

Intelligence community.” Palantir also claims that “Palantir is currently in use by tens of

thousands of users across the DOD [Department of Defense] and IC [intelligence

community].” The Administrative Record filed in the above captioned protest includes a

February 9, 2015 “Operational Needs Statement for Palantir Platform” from [redacted]

requesting the Palantir Gotham Platform. The Statement indicated: “The Palantir

Command platform is a proven capability that is currently in use to provide COP, data

integration, and staff integration capabilities across multiple commercial and government

organizations,” and concluded that “Palantir Technologies, Inc. offers a solution that

meets all of our requirements and has fielded the same platform across multiple units

[redacted], as well as various U.S. Government agencies. [redacted].”

Pre-Solicitation Activity

The parties have stipulated that in July 2014, prior to the issuance of the DCGS-A

Increment 2 solicitation, the Army Acquisition Executive, Heidi Shyu,5 chartered a Data

Integration, Visualization and Analytics (DIVA) Independent Market Study which was

completed by the MITRE Corporation, a not-for-profit research and development

organization. The joint stipulations of fact indicate:

The purpose of the DIVA study was to “provide situational awareness and

market trends to the Army leadership of the ‘state-of-the-practice’ within the

commercial DIVA software platform landscape.” As stated in the DIVA

5 Ms. Shyu is referred to by several different titles throughout the Administrative Record

and filings with the court. The joint stipulations of fact indicate that when Ms. Shyu

chartered the DIVA Market Study in July 2014 and when she signed the October 21, 2015

Determination & Finding, her title was the Army Acquisition Executive. On October 20,

2014, when Ms. Shyu issued a “Recommendation for a Change to the Distributed

Common Ground System-Army (DCGS-A) Increment 1 Acquisition Strategy,” her title was

“Assistant Secretary of the Army (Acquisition, Logistics and Technology).” The joint

stipulations of fact also indicate when she issued the December 16, 2015

recommendation for issuance of the solicitation, her title was listed as Assistant Secretary

of Defense (Acquisition).

5

study, the DIVA study was intended to: (1) provide a high-level overview of

the ASA(ALT) Data Integration, Visualization and Analytics (DIVA)

Independent Market Study; and (2) provide recommendations for the

DCGS-A Increment 2 Acquisition effort and describe the top- level risks and

mitigation strategies associated with adopting recommendations. The DIVA

study assessed the following acquisition approaches:

a. Cloud Infrastructure Platform Provider: Provide highly-scalable and

reliable computing infrastructure services (e.g., data bases; analytic

engines; computing and storage; identity management);

b. Turn-Key: Procure a commercial product as basis of DCGS-A Increment

2 infrastructure. Integrate additional applications onto this infrastructure,

c. Hybrid approach: both an Enterprise Cloud Platform and a Turn-Key

Platform, including integration of additional applications. . . .

(all internal citations omitted). The DIVA Market Study included a “Potential Strategy:

Phased Acquisition and Integration Approach,” which recommended that the DCGS-A

Increment 2 approach

could be structured in a phased manner. Initially, the two foundation

components (e.g., COTS[6] cloud infrastructure services and COTS DIVA

“Turn Key” Platform) could be procured. Establish an integration effort to:

integrate the COTS DIVA “Turn Key” platform with the COTS cloud

infrastructure services; and integrate the DCGS-A Enterprise data

management architecture. This would establish a baseline DCGS-A

Increment #2 baseline – a core suite of applications and analytics functions;

a new Data Management Architecture.

(emphasis removed). The DIVA Market Study explained that “[a] key advantage of

leveraging COTS cloud infrastructure services and a COTS DIVA platform is that doing

so provides a significant amount of technical infrastructure and end-user capabilities.”

(emphasis in original).

On January 7, 2015, also before the solicitation was issued, the Army generated

an Information Paper, which identified key objectives and approaches to DCGS-A

Increment 2. The “Increment 2 Key Objectives” listed were: “1. Modernize the Data

Enterprise to a Data Integration Platform[,] 2. Easier to use visualization framework[,] 3.

Best Leverage industry to deliver these capabilities with a commercially supported

6 COTS, although not defined in the DIVA Market Study, appears to be an abbreviation

for “commercial off the shelf.” Palantir refers to “COTS” in the DIVA Market Study as

commercial off the shelf, without objection from defendant. Furthermore, the Trade Space

Analysis, discussed below, includes a list of acronyms and defines COTS as “Commercial

off the shelf.”

6

infrastructure[,] 4. Execute in a funding constrained environment.” The Information Paper

envisioned a “Three-Phase Approach (DIVA Competition, Domain-specific Capabilities

Updates, Integration Environment).” For the first phase, the DIVA Competition, the

Information Paper stated:

Industry to deliver the infrastructure for document / entity information to

ingest, process, and organize all of the textual data available to DCGS-A to

displace the Entity (TED) and Document (MSG) - infrastructure that

interoperates with the Geospatial and other Intelligence data-specific data

sources using standards such as Open Geospatial Consortium (OGC),

Motion Imagery Standards Profile (MISP), etc. This infrastructure could be

a commercial stand-alone solution (Palantir, IBM) or it could be a collection

of capabilities (RDMS + Hadoop +…) as long as the infrastructure has the

‘ilities’, an open architecture, and the ability to organize the data and mature

touch-points to the data.

(emphasis added).

Although conducted later in time, in July 2015, after the Army issued all three of

the Requests for Information, described below, and around the time the Army issued the

Market Research Report, the Army Materiel Systems Analysis Activity produced a Trade

Space Analysis, which evaluated capabilities that could be leveraged for the DCGS-A

Increment 2 procurement. Defendant explained that: “The TSA [Trade Space Analysis],

dated July 2015, identified and evaluated technical functionality, cost, ease of

use/usability, schedule risk, technical risk, and trade space for specific DCGS-A technical

and operational capabilities that are beyond DCGS-A Increment 1.” The Army Materiel

Systems Analysis Activity explained:

The U.S. Army Materiel Systems Analysis Activity (AMSAA) was directed

by Headquarters, Department of the Army Deputy Chief of Staff (HQDA

DCS) G-3/5/7 to conduct a Trade Space Analysis (TSA) of the DCGS-A

Information System Capability Development Document (IS CDD) to support

future requirements decisions. The TSA identified and evaluated technical

functionality, cost, ease of use/usability, schedule risk, technical risk, and

trade space for specific DCGS-A technical and operational capabilities that

are beyond DCGS-A Increment 1. The TSA results will inform the economic

analysis and Request for Proposal (RFP), supporting a potential Milestone

B acquisition decision for DCGS-A Increment 2. DCGS-A Increment 2 will

provide additional capabilities to enhance the Intelligence processing and

Fusion capabilities across intelligence domains to assist the operational

commander’s access to information, task organic sensors, and synchronize

non-organic sensor assets with their organic assets. The TSA focused on

targeted DCGS-A IS CDD capabilities that are beyond those provided by

DCGS-A Increment 1 for: Mission Command Support for the Processing,

Exploitation, and Dissemination (PED) of Intelligence, Surveillance, and

Reconnaissance (ISR); Standard Sharable Geospatial Framework (SSGF)-

7

Army Geospatial Enterprise (AGE); Data Enterprise Architecture (DEA);

and Intelligence Support to Cyber Operations (CO).

The Trade Space Analysis further explained:

Representative systems were assessed to reflect capabilities that are

readily available for the following software option alternatives: Commercial

off the shelf (COTS), Government off the shelf (GOTS), and Hybrid and are

defined as follows:

• COTS - a singular software solution or compilation of commercially

available software packages that provide an integrated solution, whereby

the vendor owns the rights to the baseline software code.

• GOTS - a singular or compilation of software solutions, whereby the

baseline software code was developed by and owned by the Government.

• Hybrid - a compilation of commercially available software packages

augmented with integrated tools/widgets written by a third-party using

requirements/specifications generated by the Government (i.e.,

combination of COTS and GOTS).

The Trade Space Analysis determined that: “Overall, the Hybrid alternative was

rated Green and scored the highest of the three alternatives. Hybrid software option

alternatives are currently functioning in the DoD IC and will only require minor

development to fill capability gaps. Upper bound COTS software solutions provide similar

‘turn-key’ technical functionality as Hybrid software solutions.”7 Specifically, regarding the

Data Enterprise Architecture results, the Trade Space Analysis stated: “The COTS and

Hybrid alternatives satisfy most of the technical functionality metrics, however, the Hybrid

software solutions are currently functional in the DoD IC and provide the best ‘turn-key’

functionality. Upper bound COTS solutions provide a turn-key technical functionality

similar to that of the Hybrid solutions.” For another capability, the Standard Sharable

Geospatial Framework (SSGF)-Army Geospatial Enterprise compatibility, the Trade

Space Analysis determined:

7 The “Technical Risk Categorical Rating Criteria” in the Trade Space Analysis was:

- Green: “Low Risk of alternative experiencing significant negative

impacts to program cost, schedule, or performance”

- Yellow: “Moderate Risk of alternative experiencing significant

negative impacts to program cost, schedule, or performance”

- Red: “High Risk of alternative experiencing significant negative

impacts to program cost, schedule, or performance”

8

Although there are some GOTS solutions that can address a few targeted

technical functionality metrics, there are no viable comprehensive GOTS

solutions that were identified by the Army/DOD geospatial community. The

COTS alternative was assessed to have greater usability, lower cost, and

lower schedule risk as compared to the Hybrid alternative. The COTS

options won’t address all Army Geospatial requirements with software “out

of the box”. However, these capability gaps are anticipated to be closed with

ongoing commercial upgrades and widgets that can be developed in the

COTS Baseline software. There were several risk driver [sic] for both the

COTS and Hybrid alternatives that were assessed to be of moderate to high

risk.

On August 13, 2014, the Army issued the first Request for Information, which was

“conducted to assess the level of relevant competition and capabilities in the market place

and elicit industry feedback to assist the Program Office in developing the Acquisition

Plan,” for the potential DCGS-A Increment 2 procurement and “request[ed] respondents’

corporate overview information and basic qualifications in managing software

development projects that are similar in scope and process to the DCGS-A program.”8

(emphasis added). The August 13, 2014 Request for Information indicated that the

“[p]roposed contract types under consideration for this effort are cost-plus-incentive-fee

(CPIF) or cost-plus-fixed-fee (CPFF), with an estimated value of $80-$100M for

development efforts over three to four years.”9 (emphasis added). Palantir responded to

the August 13, 2014 Request for Information and stated:

The acquisition cycle should fully leverage existing commercial solutions.

Prioritizing the rapid procurement of commercial capabilities minimizes the

anticipated scope of development needed to deliver Increment 2

capabilities. Narrowing the development scope requires expanding the use

of commercially available COTS capabilities—it does not require narrowing

the overall scope of the DCGS-A program. The Government does not need

to build Increment 2 functionality; the Government can buy the core

functionality from the commercial market and integrate any number of

additional applications.

(emphasis in original; footnote omitted). Palantir explained “we recommend the

Government pursue a different acquisition strategy than the strategy behind the

Increment 1 challenges.” In its response to the August 13, 2014 Request for Information,

Palantir argued that:

8 Palantir states that the August 13, 2014 Request for Information “failed to inquire about

the availability of commercial or nondevelopmental items that could meet the

requirements of DCGS-A2.”

9 Palantir believes this statement demonstrates that “[t]he Army conceded in the first RFI

[the August 13, 2014 Request for Information] that it was not even contemplating the

possibility of a fixed-price contract for the procurement of commercial items.”

9

The most cost-effective and lowest-risk procurement approach is the

acquisition of an open architecture data fusion platform through open

competition for an existing software solution at a Firm-Fixed Price (FFP).

FFP vehicles shift performance risk to the contractor, reduce the risk of cost

overruns to the Government, and shorten delivery schedules.

The parties have stipulated that “Palantir USG recommended among other things a Firm-

Fixed Price (FFP) model in conjunction with ‘an outcomes-based Performance Work

Statement based on a proven product and incorporating support services,’” and, further,

“Palantir USG stated that ‘the FFP model can be used in conjunction with a Cost-Plus

model for optional system enhancements. CPIF and CPFF contracts should total less

than 20 percent of the total contract value.’” Palantir indicated:

Examples of successful FFP contracts include our work at the U.S. Marines

Corps, where enhancements are included as part of our regular software

releases and small businesses fulfill highly custom development requests

by building the top of the foundation layer. Likewise, U.S. Immigration and

Customs Enforcement continues to expand Palantir capabilities through a

FFP contract that includes regular software updates and custom

enhancements requiring less than a set number of development hours.

More recently, following open competition, we were awarded a BPA for the

IC ITE expansion at DIA [Defense Intelligence Agency] available to all IC

agencies and affording a COTS solution at a FFP.

After receiving the responses to the first Request for Information, the Army

produced a December 2014 RFI Response Analysis which indicated that the “[v]ast

majority of respondents support hiring a contractor as the LSI [Lead Systems Integrator]

due to efficiencies in industry decision making and resource-marshaling processes.” The

2014 RFI Response Analysis summarized Palantir’s submission by noting that:

The Palantir response listed several contracts they have been awarded, but

did not include scope or description of work. However, Palantir has

developed an intelligence fusion system that has been used by various

entities within the Department of Defense. Palantir was found capable to

provide Data management and Workflow Management upgrades, and

partially capable of providing Data Fusion and Cyber capabilities to

Increment 2.

The conclusion of the 2014 RFI Response Analysis stated: “Based on the responses to

the first RFI, and analysis of the resulting information conducted by the DCGS-A

Increment 2 Contract IPT [Solicitation Integrated Product Team], the overall conclusion

of this Market Research Report is that a more capability focused RFI needs to be issued

to industry.”

10

Prior to the issuance of the 2014 RFI Response Analysis, on October 20, 2014,

Ms. Shyu, Assistant Secretary of the Army (Acquisition, Logistics and Technology), issued

a memorandum to the Under Secretary of Defense (Acquisition, Logistics and

Technology) regarding a “Recommendation for a Change to the Distributed Common

Ground System-Army (DCGS-A) Increment 1 Acquisition Strategy.” In the memorandum

she requested approval to “[e]nd the Increment 1 program at Release 2, remove Release

3 from the program plan, and allocate the remaining Research, Development, Test and

Evaluation (RDT&E) funds to . . . Initiate Increment 2 preparatory activities.” Ms. Shyu

explained that:

I believe allocating the remaining Increment 1 RDT&E funding to support

potential required fixes from the Increment 1 Release 2 Limited User Test

results and moving forward with Increment 2 efforts as soon as possible will

provide a higher return on investment on the limited RDT&E funds currently

available. In addition, Increment 1 Release 2 will deliver approximately 90

percent of the planned Increment 1 capability.

On December 5, 2014, the Army issued a second Request for Information, which

“[w]as issued to determine ability of individual companies to act as the prime contractor

for the DCGS-A development effort.” As in the August 13, 2014 Request for Information,

“this RFI requests respondents’ specific answers regarding the basic qualifications in

managing software development projects that are similar in scope and process to the

DCGS-A program.” (emphasis added). For the December 5, 2014 Request for

Information, the Army sought “information regarding your corporate capabilities and

experience related to the delivery of capabilities.” Question 3.0(d) of the December 5,

2014 Request for Information asked: “Within the last three (3) years, from the table below,

please indicate which domains that your company has experience developing and

integrating with these types of software applications/capabilities.” (emphasis added). A

copy of the table referenced in Question 3.0(d) is included below:

Software Government Agency or % of Work Period of Prime Contract If you have no

Solutions or POC for this Gov’t Performed Performance or Number experience

Services work (email/ Customer Sub / Value have you

Delivered: phone No.) partnered with

anyone with

experience

(Company

Cloud Name)?

Computing

Big Data

Analytics

Data

Architecture &

Management

Data Fusion &

Pattern Analysis

11

Applications for

IC ITE Joint

Storefront

Targeting

Signals

Intelligence/NS

A-Net

Operations

Defensive Cyber

Operations

Offensive Cyber

Operations

Counter

Intelligence &

Human

Intelligence

DCGS

Integration

Backbone (DIB)

implementation

Weather

Effects/Analysis

GEOINT (Full

Motion

Video/Static

Imagery

Intelligence)

Geospatial

Intelligence

(Terrain &

Mapping)

Collection

Management

(Sensor

Management)

On-the-Move

Operations

Workflow

Management

Role/Attribute

Base Access

Control

Protection level

3 (PL 3) security

hardening

Ease of Use

Initiatives

High/Ultra

Reliability

Program

12

Army

Interoperability

Certification

Joint

Interoperability

Certification

Question 3.0(f) asked: “Does your company have an adequate DCAA accounting

system? If not, can your company obtain an adequate DCAA accounting system prior to

proposal submission?” Question 3.0(h) asked, “[w]hat is your company’s current rate of

personnel retention over the last five (5) years?”

Palantir again responded10 to try to explain the value of a commercial, not a

developmental, approach:

We continue to believe that the success of Increment 2 requires a proven

commercial solution to ensure the delivery of a working capability on time

and within budget. We are concerned that the present RFI, DCGS-

A_INC2_RFI2, is focused on collecting information on each respondent’s

capability to conduct a services-based, large-scale, and custom software

engineering effort. Several questions are designed to assess vendor

experience with major software development projects, rather than to assess

existing software capabilities applicable to Increment 1 capability gaps.

Palantir recommended “that the Government pursue a different acquisition strategy than

the long-term development used in Increment 1. We believe the acquisition of an open

architecture, COTS-based platform at a Firm-Fixed Price (FFP) offers the most cost-

effective and lowest-risk procurement approach for Increment 2 capabilities.” Palantir

emphasized:

Our commercially developed data integration and analytic platform is

designed for use in a variety of use cases and domains across our

commercial and government clients. We have provided our solution in

support of many of the domains listed under “Software Solutions or Services

Delivered” for our deployments with Army, DoD and the IC. However, the

10 As discussed below, defendant argues that, although “Palantir USG responded to RFI

No.2,” Palantir did not “complete the Army’s chart and identify its specific capabilities

across the various DCGS-A.” Defendant states that Palantir “declined to answer question

3.0(d) in RFI No.2,” and “question 3.0(f) in RFI No.2,” and “question 3.0(h) in Request for

Information No.2.” Palantir responds that the Army did not in fact request that bidders

“complete the Army’s chart and identify its specific capabilities across the various DCGS-

A,” “[r]ather, it asked prospective bidders for which ‘Agency or Gov’t Customer’—including

procurement ‘contract number’—they had certain experience within ‘the last three (3)

years.’ Palantir had already provided the Army with information about its prior

Government contracts. There was no reason to do so again.” (emphasis in original;

internal citations omitted).

13

request for information on software series contracts performed across USG

is not relevant to an acquisition strategy targeting a COTS-based solution.

If the Government has questions on how our platform functionally fulfills the

specific domains, we would be happy to provide demonstrations or arrange

a discussion.

After the responses to the second Request for Information were received, on

January 20, 2015, the Army held an “Industry Day,” characterized by the Army as a “forum

to share emerging requirements with Industry,” which “helped to ensure the Government’s

requirements are defined adequately to promote high quality proposals and adequate

competition.” Between January 20, 2015 and May 12, 2015, the “Government conducted

a one on one engagements [sic] with 78 different organizations,”11 which the Army stated

was an opportunity to “[p]rovide a forum to answer Industry’s questions and elicit their

feedback regarding to [sic] the elements of the Increment 2 Acquisition Strategy and

Acquisition Plan such as small business involvement and Data Management

considerations.”

On May 6, 2015, the Army issued a third Request for Information, which “[w]as

released to determine if [the] rule of two exists, as defined in FAR [Federal Acquisition

Register] 19.502, and if a small business set-aside is appropriate for Increment 2

development.” Palantir indicated that it was not a small business and, as with the previous

Requests for Information, responded:

The initial decision to embark on a significant software development effort,

rather than acquiring a COTS solution, resulted in many of the DCGS-A

Increment 1 challenges. We are concerned that several of the RFI questions

indicate that the Government is considering contract terms and vehicles that

would perpetuate risky long-term, services-based contracts that focus on

large software development activities.

Palantir also indicated in its response:12

11The joint stipulations of fact reflect that the Army conducted “[o]ver 80 one-on-one

sessions with the Program Manager and industry.” Neither the joint stipulations of fact nor

any document in the Administrative Record establish whether or not any of the more than

80 meetings included Palantir.

12In responding to the question in the May 6, 2015 Request for Information, “[e]xplain

how your company would be able to operate without payment for up to 90 days if awarded

a Prime Contract for Increment Two Development,” Palantir indicated:

As a privately owned company, Palantir Technologies, the parent company

of Palantir USG, Inc., does not typically release financial information. We

will provide audited statements as reasonably necessary for the purposes

of determining our ability to perform our obligations under the agreement

subject to the appropriate confidentiality provisions being put in place.

14

Data integration requirements are not unique to the Army. The Army can

acquire an enterprise-wide data platform now, without development risk or

cost, and focus custom development efforts on unique needs across the

Force. The successful delivery of Increment 2 depends on the answer to a

central question: will the Army acquire a data platform from the commercial

market or will it attempt to build one itself?[13]

As noted above, Palantir explained that “[i]n cooperation with the government, Palantir

fields and manages 25 Palantir deployments at every major Marine Corps command,

representing over 15,000 accounts at peak usage across the Marine Intelligence

community.”

After a second Industry Day, held on June 25, 2015, which the Army characterized

as “an opportunity to discuss the draft Increment 2 requirements with industry,” in July

2015, the Army issued a Market Research Report, which determined that “the DCGS-A

Increment 2 development effort cannot be procured as a commercial product.”14 The

Market Research Report stated that “[s]ignificant portions of the anticipated Increment 2

scope of work such as Data Fusion, Intelligence Support to Cyber, and DIB [Integrated

Backbone] upgrade are not available as a commercial product. As such, the DCGS-A

Increment 2 development effort cannot be procured as a commercial product.”15

Addressing Palantir specifically, the Market Research Report16 stated in the “RFI

Respondent Capability Assessment” that “[t]he Palantir response did not provide any

examples of past experience relevant to the development of Increment 2, and was

therefore found non-responsive.” (emphasis removed). The parties have stipulated that:

A November 6, 2015 paper to the Chief of Staff of the Army stated that

“Extensive market research efforts were conducted to ensure requirements

13In the complaint, protestors allege that “[f]or over 15 years, the Army has spent

approximately $6 billion trying to develop its own software solutions for DCGS through

developmental service contracts with myriad defense contractors.”

14 A chart included in the Market Research Report briefly summarized the role of each of

the Requests for Information. The Market Research Report indicated: “RFI 1 To

determine level of competition and industry feedback of Acquisition Strategy[,] RFI 2 To

determine capability of individual businesses to perform as prime contractor[,] RFI 3

Inform Increment 2 on the role of small business[.]” (emphasis in original).

15The Market Research Report also indicated that in September 2015, the Army would

have an “Industry Engagement,” which would be to “serve as a venue to discuss the Draft

Increment 2 Request for Proposal (RFP) with industry following its release.”

16 Of the 43 respondents to the December 5, 2014 Request for Information, the only

responder to the December 5, 2014 Request for Information the Market Research Report

labeled as “non-responsive” was Palantir.

15

were achievable” and then listed “4-month independent DIVA study lead

[sic] by MITRE, SEI, DNI, and DAU,” “3 Requests for Information,” “2

industry days with over 500 attendees and 224 companies,” and “Over 80

one-on-one sessions with the Program Manager and industry.”

Even after responding to the three Requests for Information, Palantir continued to

try to express to the Army its views and frustration with the direction of the developmental

procurement choice by the Army and with the Army’s apparent disinterest in consideration

of commercially available alternatives. In response to the draft Performance Work

Statement, Palantir indicated:

Palantir USG, Inc. . . . has reviewed the Performance Work Statement

(PWS) for DCGS-A Increment 2 Task Order 0001. As written, Task Order

0001 prevents companies with commercially available technology from

direct participation in the program and will result in failure. Task Order 0001

will lock the Army into an irrelevant and unusable “flagship” intelligence

architecture for the next decade. Increment 1 failed because the Army

attempted to build a foundational data platform from scratch while refusing

to adopt proven commercial technology for core system components. After

spending fifteen years and billions of dollars, the Army has not delivered a

working intelligence platform to soldiers. Army ASA(ALT) acknowledged

this reality and directed DCGS-A’s leadership to halt Increment 1 and adopt

a new strategy for Increment 2. Despite this direction, and in direct violation

of Congressional intent, the Army has deliberately chosen to repeat the

same strategy that resulted in the failure of Increment 1 and is once again

ignoring commercially available technology that works for soldiers today.

Increment 2 is an opportunity to correct this failure, but only if the Army

changes its fundamental acquisition strategy. This is a consequential

moment for the DCGS-A program. There is little time remaining to change

the strategy, and current program leadership appears unwilling to take

necessary action.

(internal reference omitted).

On October 21, 2015, Ms. Shyu, as the Army Acquisition Executive, signed a

Determination & Findings for “Award of a Single Source Indefinite-Delivery Indefinite-

Quantity (IDIQ) Single Award Contract Exceeding $103M for Distributed Common Ground

System (DCGS)-Army Increment 2, Engineering Manufacturing and Development IAW

DFARS 216.504(c)(1)(ii)(D)(i).” The Determination & Findings noted that “DCGS-A

Increment 2 is heavily focused on design and development of a new data management

architecture by a contractor as the systems integrator,” and “[d]evelopment of the data

integration layer is pivotal and complicated by multiple interfaces and interoperability

requirements with external intelligence systems.” The Determination & Findings

concluded that:

16

Based on the above analysis, issuing a single award IDIQ contract will

mitigate many of the risks identified herein and is in the best interest of the

Government. Due to the complex developmental efforts this work entails,

further competition at the task order level would interrupt development,

ultimately increase price, and cause schedule slippages.

Ms. Shyu determined:

that a single-source task or delivery order contract estimated to exceed

$103 million for Distributed Common Ground System [DCGS]-Army

Increment 2, Engineering Manufacturing and Development contract is

authorized because the task or delivery orders expected under the contract

are so integrally related that only a single source can reasonably perform

the work.

Finally, on July 1, 2016, notably one day after the above captioned protest was

filed in this court, and significantly after the issuance of the solicitation and the conclusion

of the GAO protest, Christopher Fisher, the contracting officer for the solicitation at issue

and Bryon Young, the Principal Assistant Responsible for Contracting, issued a

“DETERMINATION OF NON-COMMERCIAL ITEM.” (capitalization in original; emphasis

removed). The Determination of Non-Commercial Item stated that market research was

conducted and the three “RFIs were to canvas the market and determine the availability

of commercial/non-developmental items/services available for satisfying the DCGS-A’s

Increment 2 requirements.” The Determination of Non-Commercial Item stated:

Based upon market research conducted by the Program Manager (PM)

DCGS-A, I find that some commercial software applications exist that could

potentially satisfy portions of the DCGS-A Increment 2 requirement. The

market research showed that significant portions of the scope of work, such

as, the military unique capabilities classified up to the Top Secret level

needed to meet the requirements associated with Signals Intelligence

(SIGINT), Human Intelligence (HUMINT), Military Weather, Interoperability,

Data Fusion, Intelligence Support to Cyber, and DCGS Integrated

Backbone (DIB) upgrade are not available as commercial items.

The Determination of Non-Commercial Item concluded:

I find, based upon the requirements of this procurement and the market

research performed, that this requirement is not appropriate as a

commercial item procurement because no single commercial item of a type

customarily used by the general public or one that can meet the

Government’s requirement through minor modification is available; nor is

there a combination of commercial items that can satisfy the DCGS-A

Increment 2 requirement.

17

The Solicitation, GAO Protest, and Filing in this Court

On December 16, 2015, the Army issued a recommendation for issuance of the

solicitation, in which Ms. Shyu, as the Assistant Secretary of Defense (Acquisition), stated

that DCGS-A Increment 1 was “fully operational,” but its “data architecture is over 10

years old and is based upon technology that is nearing obsolescence, with no growth

margin.” Ms. Shyu continued: “Increment 2 will provide a new Data Management

Architecture, a new Workflow Management capability, improved fusion and pattern

analysis, cyber security upgrades, upgrades to the DCGS Integrated Backbone and

usability enhancements.” After Ms. Shyu’s recommendation for issuance of the

solicitation, on December 23, 2015, the Army issued the solicitation at issue in this protest,

Request for Proposals No. W56KGY-16-R-0001, for engineering, manufacturing, and

development services. The solicitation required a single contractor to be the system data

architect, developer, and integrator for DCGS-A Increment 2. The solicitation had four

evaluation factors: (1) Technical; (2) Cost/Price, (3) Past Performance, and (4) Small

Business Participation Plan. The solicitation contemplated the award, on a best value

basis, of a single indefinite-delivery, indefinite-quantity contract, with the simultaneous

issuance of a cost-reimbursement type task order and the period of performance

contemplated a six year term from contract award.

The closing date for the solicitation was February 16, 2016. That same day,

February 16, 2016, Palantir filed a timely protest at the GAO. The GAO subsequently

issued its decision on May 18, 2016, denying the protest. See generally Palantir USG,

Inc., 2016 WL 3035029. In a short decision, the GAO indicated that “[w]hile the market

research revealed that commercial items were available to meet some of the DCGS–A2

requirements, the agency concluded that there was no commercial solution that could

meet all the requirements of DCGS–A2,” and “[b]ecause the agency concluded that

significant portions of the anticipated DCSG–A2 [sic] scope of work were not available as

a commercial product, the agency determined that the DCGS–A2 development effort

could not be procured as a commercial product under FAR part 12 procedures.”

According to the GAO, “[t]he protester has failed to show that the agency's determination

in this regard was unreasonable.” Id. at *3 (footnote omitted). The GAO also determined

“the record shows that the agency reasonably decided on its approach of having a single

contractor, who would be responsible for selecting all the components of DCGS–A2, and

who would bear the responsibility for making certain that those components are

integrated, in contrast to the phased approach favored by Palantir.” Id. at *4. The GAO

concluded:

[T]he agency’s approach is reasonably related to its need for a fully

integrated and interoperable system made up of a number of specific

capabilities, some of which are commercially available and some of which

are not. While the agency considered several potential approaches to this

procurement, including the phased approach favored by the protester, the

agency ultimately concluded that it would have a greater likelihood of

success (in that it could avoid certain technical risks, concerns and

significant schedule risk and cost uncertainty) by opting to have a single

18

contractor serve as the system integrator in charge of developing and

selecting the components and making sure that they can be successfully

integrated. As such, we have no reason to question the approach chosen

by the agency or to conclude that the solicitation is unduly restrictive of

competition.

Id. at *5 (internal citation omitted).

On June 30, 2016, Palantir USG, Inc. and Palantir Technologies Inc. filed the

current pre-award bid protest in this court. The complaint has seven counts. Count one

alleges that the Army violated 10 U.S.C. § 2377 (2012) and 48 C.F.R. § 10.002 (2016)

and 48 C.F.R. § 11.002 (2016) by refusing to solicit the data management platform as a

commercial item. Similarly, count two alleges that the Army violated 10 U.S.C. § 2377

and 48 C.F.R. §§ 10.002 and 11.002 by refusing to solicit a commercial item for the

entirety of DCGS-A Increment 2. Count three alleges that the Army violated 10 U.S.C.

§ 2377(c) by failing to determine whether its needs could be met by commercial items.

Count four contends that the Army violated 48 C.F.R. § 16.301-2(a) (2016) by soliciting a

cost-plus contract instead of a fixed price contract, and states:

Given the Army’s experience of 15 years with DCGS-A1, and given the

existence of commercial items for which pricing information is available, the

Army cannot credibly claim that it is unable ‘to define its requirements

sufficiently to allow for a fixed-price contract’ or that it is not possible for

“costs to be estimated sufficient with accuracy to use any type of fixed-price

contract.”

Count five alleges that the Army violated 10 U.S.C. § 2304a(f) (2012) and DFARS Part

217.204 (2016) by soliciting a task order contract with a base period of six years. Count

six alleges that the Army violated 48 C.F.R. § 16.504 (2016) by soliciting an impermissibly

expensive task order exceeding $112.0 million. Finally, count seven alleges that “the

Army engaged in arbitrary, capricious, and unlawful conduct by refusing to allow Palantir

to bid, by resisting innovation, by insisting on the failed approach of DCGS-A1, and by

engaging in bad faith conduct[.]” (emphasis and capitalization removed).

The complaint alleges that:

[T]he Army’s conduct is fundamentally irrational, arbitrary, and capricious

because it insists upon constructing a Solicitation for DCGS-A2 that repeats

all the failures of DCGS-A1. It insists on a cost-plus development effort even

though that effort was a complete failure for DCGS-A2 [sic]. It insists on

larding up its list of requirements with meaningless or redundant work

streams that are nothing more than an incentive for the defense contractors

involved to make money, and will have little to no operational utility. It insists

on requiring DCGS-A2 to have interoperability with antiquated systems

created over a decade ago, and that are now obsolete. It is possible for

Palantir to do all these things, but it is irrational and costly for the Army to

19

insist upon them. Requiring the contractors to perform such useless tasks

is arbitrary and capricious.

The complaint asks this court to enter

a permanent injunction requiring the Army to rescind its Solicitation and to

take any and all necessary corrective action needed to remedy its legal

violations, including at a minimum through the issuance of a revised

solicitation that complies with the Army’s legal obligations to define its

requirements in such a manner that solicits bids from offerors who will

provide commercial items or nondevelopmental items to meet the Army’s

requirements.

Initially, in response to the complaint, defendant filed a motion to dismiss Palantir

USG, Inc. and Palantir Technologies Inc.’s complaint and argued that Palantir USG, Inc.

and Palantir Technologies Inc. lacked standing to bring this protest and that even if

Palantir USG, Inc. and Palantir Technologies Inc. had standing, they had waived any

objections to the solicitation. After the parties fully briefed the motion to dismiss, the court

determined that the timely protest filed at the GAO did not cause Palantir USG, Inc.’s

claims to become subject to waiver in this court, and, that Palantir had standing to bring

its claims in this court. See Palantir Techs., Inc., et al. v. United States, 128 Fed. Cl. 21,

46 (2016). The court determined, however, that Palantir Technologies Inc. had not filed a

timely protest with the GAO, and, therefore, its claims were subject to waiver, and granted

defendant’s motion to dismiss Palantir Technologies Inc. for lack of subject matter

jurisdiction.

In addition to defendant’s motion to dismiss, the parties now have filed cross-

motions for judgment on the Administrative Record. In response to the allegations in the

complaint, the defendant generally responds that agencies have “substantial discretion”

both to determine the requirements and how best to acquire those requirements.

Defendant also argues that the Army’s market research, and the determination based on

the market research, were appropriate and that the documents in the Administrative

Record do not support Palantir’s argument that the Army erred in not soliciting the DCGS-

A Increment 2, including the data management platform, as a commercial item. Finally,

defendant argues that there is no evidence of bias and/or bad faith by the Army towards

Palantir.

Supplementation to the Administrative Record

After Palantir filed its complaint and moved for judgment on the Administrative

Record, on July 15, 2016, Palantir moved to supplement the existing Administrative

Record in order to support Palantir’s allegations regarding bias and/or bad faith, as well

as regarding the Army’s failure to comply with 10 U.S.C. § 2377. Palantir sought to

supplement the Administrative Record with discovery, including depositions,

interrogatories, and document production requests. In its motion to supplement the

Administrative Record, Palantir argued that the Administrative Record filed by defendant

was “deficient in a number of respects.” Palantir argued that the Administrative Record

20

did “not include documents that the Army must have, or at a minimum should have,

considered when it prepared the Solicitation;” “omits documents that were ‘close at hand’

and highly relevant to the Solicitation;” “omits documents demonstrating that the Army’s

DCGS Program Owners made inaccurate assertions or assumptions about the Palantir

Gotham Platform;” and “omits documents demonstrating the bias and bad faith conduct

alleged by Palantir in its Complaint.” Palantir argued that supplementation of the

Administrative Record was necessary to conduct effective judicial review of the Army’s

decision-making process. Specifically regarding Palantir’s bias and/or bad faith

allegations, Palantir asserted that the “currently assembled Administrative Record is

inadequate to assess” bias and/or bad faith. In arguing that supplementation to the

Administrative Record was justified to effectively review Palantir’s bias and/or bad faith

allegations, Palantir pointed to past alleged efforts of “certain Army personnel to delete

and suppress favorable evaluations of the Palantir Gotham Platform, resist the

deployment of commercial items to Soldiers in the field, and disseminate inaccurate

information about Palantir’s technology.”

Palantir attached 53 exhibits with which it sought to supplement the Administrative

Record. Of the 53 exhibits, Palantir identified 43 exhibits that were relevant to Palantir’s

allegations that the Army failed to comply with 10 U.S.C. § 2377. According to Palantir,

with these 43 exhibits, Palantir was “seeking to add to the record material that should

have been of central importance to the market research § 2377 required the Army to

conduct, the process § 2377 required the Army to follow, and the determinations and

inquiries § 2377 required the Army to make.”

Palantir specifically identified 12 exhibits17 as “necessary to conduct judicial review

of Palantir’s allegations of bad faith and biased conduct.”18 Palantir moved to supplement

the Administrative Record with materials that allegedly “document the DCGS-A Program

Owners’ years-long efforts to protect their failing program, by resisting an innovative

solution and blocking the deployment of the Palantir Gotham Platform to the field.”

In addition to the exhibits with which Palantir sought to supplement the

Administrative Record, Palantir also requested leave of the court to conduct what it

described as limited discovery, including seven requests for production of documents,

seven interrogatories, and four depositions. Palantir argued that discovery was needed

to resolve the central factual predicate “to the Army’s decision to issue a developmental

17 Palantir indicated that Exhibits 2-7 related to both the allegations that the Army failed

to comply with 10 U.S.C. § 2377 and to the allegations of bias and/or bad faith.

18 Although Palantir’s motion to supplement the Administrative Record originally listed

Exhibits 2-7 and 35-39 as “necessary to conduct judicial review of Palantir’s allegations

of bad faith and biased conduct,” it appears that Palantir also intended to include Exhibit

52 as essential to the court’s consideration of Palantir’s bias and/or bad faith allegations.

Exhibit 52 was not included in Palantir’s motion to supplement the Administrative Record.

Palantir added Exhibit 52 to its reply brief in support of its motion to supplement the

Administrative Record.

21

solicitation rather than to define its requirements so they could be met by a commercial

or nondevelopmental item.” Palantir also asserted that “[t]argeted discovery is needed to

get to the bottom of the bias and bad faith that infected this solicitation process” and that

Palantir had “presented allegations of bad faith and bias that rest on ‘a strong evidentiary

footing,’ and that are more than sufficient to warrant discovery.” Additionally, Palantir

argued that in order “[t]o engage in effective judicial review of Palantir’s ability to offer a

commercial item that satisfies the Army’s requirements, the Court should permit testimony

from individuals who have the expertise needed to translate the technical information in

the Solicitation, the PWS [Performance Work Statement], and related documents into

plain English.” Palantir also sought leave of the court to depose four government

individuals: Contracting Officer Christopher Fisher, Lieutenant General Mary Legere (now

retired), the “Army’s Deputy Chief of Staff for Intelligence (G-2), the Program Owners of

DCGS-A,” Major General Laura Richardson, who “signed the April 25, 2012 ATEC [United

States Army Test and Evaluation Command] report,” and Kevin Kelly, “the author of the

MITRE study.”

Although defendant agreed initially to supplement the Administrative Record with

three of the exhibits Palantir proposed to add, defendant otherwise opposed Palantir’s

motion to supplement the Administrative Record and for discovery. Defendant argued that

Palantir sought to supplement the Administrative Record with “stale” documents and

otherwise substitute its own judgment for that of the agency’s contracting personnel.

Defendant further argued that Palantir “fail[ed] to demonstrate evidence of bias, much

less meet the standard of ‘strong evidentiary footing’ needed to give this Court a basis to

permit supplementation of the administrative record.” According to defendant, Palantir

“attempt[s] to weave a bad faith argument and bias argument into [its] disagreement with

the overall Army policy decision on the type of overarching platform and other

requirements for which it wanted to solicit offers.” Defendant also asserted that Palantir’s

“mere disagreement with the overall agency policy decision does not demonstrate an

individual, must [sic] less an institutional, bias or bad faith.” Defendant also maintained

that Palantir should not be permitted to offer testimony about its technical capabilities

because “this protest is not about the capabilities of [Palantir’s] software product,” and

those capabilities “are irrelevant to this Court’s judicial review of the administrative

record.” Defendant also opposed Palantir’s request to conduct limited discovery through

interrogatories and document requests and to conduct depositions of Contracting Officer

Fisher, Lieutenant General Legere, Major General Richardson, and Kevin Kelly.

In deciding whether or not to supplement the Administrative Record with the

exhibits and to allow any of the additional discovery proposed by the protestor, the court

considered whether the exhibits and discovery were necessary for effective judicial

review. The court recognized that “the parties’ ability to supplement the administrative

record is limited” in a bid protest. Dyncorp Int’l, LLC v. United States, 125 Fed. Cl. 1, 2

(2016). In a bid protest, the court should review the Administrative Record already in

existence to determine whether the agency procurement action at issue was “arbitrary,

capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2) (2012). In Axiom Resource Management, Inc. v. United States, 564 F.3d 1374,

1380 (Fed. Cir. 2009), the United States Court of Appeals for the Federal Circuit held that

supplementation of the Administrative Record, generally, should be limited to cases in

22

which the omission of extra-record evidence would preclude effective judicial review. See

id.; see also L-3 Commc’ns Integrated Sys., L.P. v. United States, 98 Fed. Cl. 45, 49

(2011). “[T]he administrative record in a bid protest ‘should be supplemented only if the

existing record is insufficient to permit meaningful review consistent with the APA.’” Tech

Sys., Inc. v. United States, 97 Fed. Cl. 262, 265 (2011) (citing Axiom Res. Mgmt., Inc. v.

United States, 564 F.3d at 1381). “[A]lthough the Federal Circuit's holding in Axiom makes

clear that supplementation of the administrative record should occur rarely, it is not

prohibited and may be used when it is necessary for the Court to gain a complete

understanding of the issues before it.” Dyncorp Int’l, LLC v. United States, 125 Fed. Cl.

at 2. “One of the basic reasons a record may be insufficient is when it is missing ‘relevant

information that by its very nature would not be found in an agency record—such as

evidence of bad faith, information relied upon but omitted from the paper record, or the

content of conversations.’” Tech Sys., Inc. v. United States, 97 Fed. Cl. at 265 (citing

Orion Int'l Techs. v. United States, 60 Fed. Cl. 338, 343-44 (2004)).

Specifically concerning Palantir’s motion to supplement the Administrative Record

to support its bias and/or bad faith allegations, the court considered whether Palantir’s

allegations had a sufficiently strong evidentiary foundation to justify supplementation.

“Where bias is alleged, the administrative record frequently will not be complete or suffice

to prove or disprove the allegation.” See Pitney Bowes Gov’t Sols., Inc. v. United States,

93 Fed. Cl. 327, 332 (2010). “This Court and other fora resolving bid protests have

traditionally considered extra-record evidence in assessing alleged bias or bad faith”

because allegations of bias, prejudice and bad faith may “depend upon a Government

official’s past conduct toward a bidder,” which “cannot be subsumed within the record of

a challenged award decision.” Int’l Res. Recovery, Inc. v. United States, 61 Fed. Cl. 38,

41-42 (2004); see also Starry Assocs., Inc. v. United States, 125 Fed. Cl. 613, 621 (2015)

(“Effective judicial review is not possible when the administrative record ‘is missing

“relevant information that by its very nature would not be found in an agency record—

such as evidence of bad faith. . .”’.” (quoting InfoReliance Corp. v. United States, 118 Fed.

Cl. 744, 747 (2014))). However, “allegations of bad faith must be based on hard facts in

order to justify discovery and supplementation of the administrative record.” Int’l Res.

Recovery, Inc. v. United States, 61 Fed. Cl. at 43. “[A]llegations of bad faith must rest on

a strong evidentiary footing to overcome the normal presumption of regularity and good

faith conduct by agency officials.” Orion Int’l Techs., v. United States, 60 Fed Cl. at 344.

“[T]o address bias, the court will entertain extrarecord evidence . . . when there has been

a ‘strong showing of bad faith or improper behavior,’” and the strong showing must have

an evidentiary foundation and “not rest merely on counsel’s argument, suspicion, or

conjecture.” Pitney Bowes Gov’t Sols., Inc. v. United States, 93 Fed. Cl. at 332 (quoting

Ala. Aircraft Indus., Inc. v. United States, 82 Fed. Cl. 757, 766 (2008)); see also Pitney

Bowes Gov’t Sols., Inc. v. United States, 93 Fed. Cl. at 332 (“Essentially what is required

is ‘a threshold showing of either a motivation for the [g]overnment[al] employee to have

acted in bad faith or of conduct that is hard to explain absent bad faith.’” (quoting L–3

Commc’ns Integrated Sys., L.P. v. United States, 91 Fed. Cl. 347, 356 (2010))). “‘[T]o put

facts relating to bad faith in play’” and supplement the administrative record, allegations

of bias and/or bad faith must be based on “hard facts” and sufficiently well-grounded, and

not merely innuendo or suspicion. See Madison Servs., Inc. v. United States, 92 Fed. Cl.

120, 130 (2010) (quoting Beta Analytics Int’l, Inc. v. United States, 61 Fed. Cl. 223, 226

23

(2004)); see also Pitney Bowes Gov’t Sols., Inc. v. United States, 93 Fed. Cl. at 332; Tech

Sys., Inc. v. United States, 97 Fed. Cl. at 265-66. Additionally, in considering whether

extra-record evidence should be included in an administrative record, the court should

apply the Federal Rules of Evidence to the extra-record materials in order to ensure their

reliability. See L–3 Commc'ns Integrated Sys., L.P. v. United States, 91 Fed. Cl. at 358

(explaining that documents which the agency omitted from the administrative record, but

should have included in the first place, or are agency-generated, should be included for

completeness).

The court held a hearing regarding Palantir’s motion to supplement the

Administrative Record. At the hearing, together with the parties, the court reviewed each

exhibit and discovery request that Palantir proposed for supplementation to the

Administrative Record to determine whether any of the exhibits or discovery requests

were necessary for effective judicial review. Of the 53 exhibits proposed for

supplementation, the parties only were able to agree that three of the exhibits (Exhibits

1, 22, 23 in the motion to supplement the Administrative Record) should be added to the

Administrative Record in this protest. Additionally, at the hearing, Palantir withdrew,

“without prejudice,” eight of the exhibits proposed for supplementation, Exhibits 29-33,

35, 37-38.

After reviewing the Administrative Record, as well as Palantir’s proposed exhibits,

and after careful consideration, the court concluded that some, but not all, of the exhibits

were necessary for effective judicial review, and, thus, supplementation to the

Administrative Record was justified for only certain exhibits. Specifically, the court denied

Palantir’s motion to supplement the Administrative Record regarding proposed Exhibits

2, 7, 8-21, 25-28, 34, 36, 39, and 50-53 because the court found that these exhibits were

not necessary for effective judicial review.19

The court found that Exhibits 3-6, 24, and 40-49 were necessary for effective

judicial review and these exhibits were added to the Administrative Record. Exhibits 3-6

pertained to Palantir’s allegations of bias and/or bad faith. As stated above, “allegations

of bad faith must be based on hard facts in order to justify discovery and supplementation

of the administrative record.” Int’l Res. Recovery, Inc. v. United States, 61 Fed. Cl. at 43.

Thus, the court considered whether Palantir’s bias and/or bad faith allegations were

based on sufficient evidentiary footing to justify discovery and supplementation to the

Administrative Record. The court also concluded that Exhibit 24 was necessary to

effectively review the reasonableness of the Army’s decision to issue a solicitation only

for a developmental contract. Exhibits 40-49 were excerpts of government contracts held

by Palantir that purportedly could demonstrate the potential capabilities of Palantir’s

commercially available product, which protestor argues the agency should have

considered when it made its determination under 10 U.S.C. § 2377. Because the parties

dispute whether or not Palantir has a commercially available product with the capabilities

to satisfy the requirements in the DCGS-A Increment 2 solicitation, and Exhibits 40-49

19In denying Palantir’s motion to supplement the Administrative Record with these

exhibits the court allowed the exhibits to be used in depositions.

24

contain contracts that could illustrate Palantir’s capabilities, the court determined that

these contracts were necessary for effective judicial review. Additionally, as discussed

further below, the court determined that limited supplementation of the Administrative

Record regarding the technical requirements of the DCGS-A Increment 2 solicitation, and

Palantir’s ability to potentially meet those requirements, was justified and the court

permitted the parties each to select one expert to submit an expert report and permitted

the parties to depose each side’s designated expert. Subsequently, defendant proffered

Shaun Cronen, a “Team Lead in the Intelligence Enterprise Branch of the Intelligence and

Systems Processing (ISP) Division of the Intelligence and Information Warfare

Directorate (I2WD) within the Communications-Electronics, Research, Development and

Engineering Center (CERDEC),” as its expert witness, and Palantir proffered Bryant

Choung, Global Defense Engineering Lead for Palantir USG, Inc. and Palantir

Technologies Inc.

Before the court, regarding bias and/or bad faith, Palantir offered a summary of

what it alleged were its “main points providing a ‘strong evidentiary footing’ for Palantir’s

allegations of bad faith,” including:

 The order from the head of the Army’s G-2 unit (the chief DCGS-A

Program Owner) for the destruction of the findings in the April 25, 2012

ATEC report that were favorable to Palantir.

 The Army’s decision to cease funding for another independent

evaluation of the Palantir Gotham Platform by the MITRE Corporation. . . .

That order came after the MITRE Corporation produced an initial slide deck

showing extremely favorable findings regarding Palantir that directly

contradict the inaccurate information the DCGS-A Program Owners were

circulating to senior DOD management and to Congress.

 The fact that, after the MITRE Corporation study with its favorable

findings on Palantir was shut down, the DCGS-A Program Owners created

slide decks and talking points about Palantir that were directly contradicted

by the MITRE Corporation study.

 An email from October 7, 2014, in which Palantir’s Doug Philippone

set forth forty-four bullet points of specific instances spanning more than

two years in which Army personnel associated with the Program Owners of

DCGS-A were engaged in “blocking” requests from the field for Palantir, and

otherwise thwarted and openly expressed their hostile bias against

Palantir.

 The fact that the Army’s supposed “market research” in 2014-15

never took cognizance of the ATEC or MITRE reports, never asked

questions about the information in those reports, never asked questions

about the existence of Palantir’s commercial products, and was all based

on the predetermination that the Solicitation would be crafted as a cost-plus

25

developmental services contract, rather than a fixed-price acquisition of a

commercial or nondevelopmental item.

(emphasis removed). Palantir sought to use Exhibits 3-6 and Exhibit 52 included in

Palantir’s motion to supplement the Administrative Record, as well as Tabs 33, 35, 37,

and 39 of the existing Administrative Record, to demonstrate the above listed allegations.

Exhibits 3-5 contain the April 25, 2012 ATEC report on Palantir’s capabilities, the revised

May 25, 2012 ATEC report on Palantir’s capabilities, and an e-mail directing the April 25,

2012 ATEC report to be rescinded and destroyed. Exhibit 6 is an information brief

regarding Palantir’s capabilities created by the MITRE Corporation. Exhibit 52 is an e-

mail from Palantir’s Douglas Philippone to an Army official recounting numerous alleged

instances of “blocking” events by Army personnel to avoid using Palantir’s technology.

Palantir’s allegation that the Army was biased against it appears to rest, in part, on

the history between Palantir and the Army that occurred prior to the issuance of the

solicitation at issue in this bid protest, including during the time the market research was

conducted. Included in that history are the reports on Palantir’s capabilities by ATEC in

April and May 2012 and the MITRE Corporation that were allegedly shut down or

otherwise influenced by Army personnel who allegedly did not want to publicize favorable

findings regarding Palantir’s capabilities. Because these allegations of bias pertain to the

past conduct of certain Army personnel that occurred in the years before the DCGS-A

Increment 2 solicitation was issued, any evidence of this past conduct normally would not

have been included in the Administrative Record surrounding the 2015 DCGS-A

Increment 2 procurement at issue. As such, the court considered that the Administrative

Record regarding Palantir’s allegations of past biased conduct might be incomplete.

Nonetheless, the court found that the Administrative Record originally submitted to the

court by defendant included an Army investigative report regarding the April 25, 2012

ATEC report and the circumstances surrounding the rescission and modification of that

report in the revised May 25, 2012 ATEC report conducted by Lieutenant General William

Grisoli. Thus, the Administrative Record contained some information relevant to Palantir’s

allegations of past, biased conduct by Army personnel. The court reviewed the

investigative report in the Administrative Record, which indicated that “the Army G-2 team

is passionate and a little defensive about DCGS-A and its relationship with Palantir” and

that, at times, “some members of the G-2 staff lost some of their objectivity with respect

to how they presented information on Palantir and DCGS-A to Army senior leaders.” The

investigative report also indicated that the relevant G-2 staff included Lieutenant General

Legere and the Chief Information Officer of G-2, Lynn Schnurr. Although the investigative

report concluded that the April 25, 2012 ATEC report was not changed because of undue

influence from the G-2 staff, the court found that the need to conduct an investigative

report surrounding the circumstances of the April 25, 2012 ATEC report and the findings

concerning the G-2 staff in that report were a sufficient, factual predicate to justify limited

26

supplementation to the Administrative Record.20

Thus, after hearing from the parties, reviewing the Administrative Record, and

carefully considering the proposed evidence of possible bias and/or bad faith, the court

concluded that Palantir’s allegations of bias and/or bad faith surrounding the April 25,

2012 ATEC report and the 2013 MITRE Corporation information brief demonstrated

sufficient foundation to justify supplementation to the Administrative Record with Exhibits

3-6 for further effective review of the issues and for limited discovery of documents and

depositions. The court also concluded that further inquiry into Palantir’s allegations of

biased conduct by Lieutenant General Legere and Lynn Schnurr was necessary to

effectively review Palantir’s allegation that there was a long history of biased conduct

towards Palantir by Army personnel. The court, therefore, permitted Palantir to seek

limited document discovery related to “the modification or destruction” of the April 25,

2012 ATEC report, as well as the opportunity to take the depositions of Lieutenant

General Legere and Ms. Schnurr. With regard to Exhibits 2, 7, and 52, which Palantir

sought to add to the Administrative Record to support its bias and/or bad faith allegations,

the court determined that there was not a sufficient factual predicate to supplement these

exhibits into the Administrative Record.

Subsequently, on August 5, 2016, Palantir submitted to the court a declaration by

Palantir employee Douglas Philippone, the Global Defense Lead for Palantir USG, Inc.

and Palantir Technologies Inc., and an expert report written by Palantir employee Bryant

Choung, the Global Defense Engineering Lead for Palantir USG, Inc. and Palantir

Technologies Inc. Mr. Philippone’s declaration was intended to support Palantir’s bias

and/or bad faith allegations and Mr. Choung’s expert report was submitted to assist the

court with evaluating the technical issues raised in the complaint. On August 12, 2016,

defendant filed a motion to strike the declaration of Douglas Philippone and the expert

report of Bryant Choung. Although defendant moved to strike Mr. Philippone’s declaration

and the expert report of Mr. Choung, the court notes that, at the time defendant filed its

motion, neither of those documents had been included in the Administrative Record by

the court. Regardless, the issue for this court’s consideration as to whether the

declaration of Mr. Philippone and Mr. Choung’s expert report should be included in the

Administrative Record remained the same. This court reviewed the substance of the

parties’ submissions to determine whether the Administrative Record in this case should

be supplemented to include Mr. Philippone’s resubmitted declaration21 and/or Mr.

Choung’s expert report.

20Moreover, at the hearing on July 25, 2016, defendant acknowledged that Exhibits 3, 4,

and 5, which Palantir sought to add to the Administrative Record, were underlying

documents to the investigative report already contained in the Administrative Record.

21Prior to this August 5, 2016 submission, Palantir had attached two declarations, one by

Douglas Philippone and one by Bryant Choung as Exhibits 50 and 51 to its motion to

supplement the Administrative Record. At the hearing on July 25, 2016, the court denied

Palantir’s motion to supplement the Administrative Record with the two declarations

because they included legal conclusions, however, the court explained that Palantir could

re-file its declarations after removing the legal conclusions and the court would review

27

The court considered whether the addition of Mr. Philippone’s declaration to the

Administrative Record, and the exhibits attached thereto, was necessary for the court to

effectively review the agency procurement decisions at issue and whether they

individually contained sufficient “hard facts” to support protestor’s bias and/or bad faith

allegations and justify supplementation to the Administrative Record. As noted above,

suspicion and innuendo is not sufficient to warrant supplementation to the Administrative

Record. Notwithstanding protestor’s argument that “Mr. Philippone’s declaration includes

ample evidence of bias and/or bad faith that are the factual predicate for

supplementation,” the statements in the declaration do not allege reliably supported facts

sufficient to support protestor’s bias and/or bad faith allegations. In his declaration, Mr.

Philippone also refers to hearsay evidence, continues to assert legal conclusions, and

makes other statements and opinions that do not appear to be based on his personal

knowledge or necessary for effective judicial review. Accordingly, the court finds that

supplementation to the Administrative Record with Mr. Philippone’s declaration is not

appropriate.

With regard to Mr. Choung’s expert report, defendant argues that “[t]he Court by

entertaining expert testimony on the issues in the case goes far beyond the administrative

record, all without the predicate of first determining that the agency’s market research

clearly violated any law or regulation.” Defendant also argues that “there is a serious

question of credibility regarding both Mr. Choung’s declaration and his expert report,” and

that, “[b]ecause of the credibility issues inherent in Mr. Choung’s declaration and expert

report,” the court should refuse to consider Mr. Choung’s expert report. In arguing that

this court should not consider Mr. Choung’s expert report because of credibility issues,

defendant focuses on statements made by Mr. Choung in his expert report and deposition

about testing by the Defense Integrated Backbone (DIB) Management Office (DMO) in

May 2012. According to defendant, “Mr. Choung misrepresented the conclusions of the

DMO as a result of the May 2012 testing of Palantir DIB adapter,” and, because of that

misrepresentation, the court should not consider any part of Mr. Choung’s expert report.

Defendant argues that “the Court has the discretion to disregard Mr. Choung’s entire

declaration, expert report and deposition testimony because of discrepancies between

his declaration, expert report, and deposition testimony and the reported results of the

DMO tests in May 2012.”

In response, protestor argues that Mr. Choung’s expert report should be admitted

to the Administrative Record because “[t]his Court has already noted that it would benefit

from expert testimony to assist in evaluating the technical issues raised in this bid protest.”

Protestor asserts that “Mr. Choung’s report is designed to assist the Court by explaining

technical issues relating to DCGS and the Palantir Gotham Platform.” Additionally,

protestor argues that “[t]he Government does not dispute that Mr. Choung is qualified to

offer an expert opinion,” and protestor contends that defendant’s accusations about the

and reconsider adding the declarations to the Administrative Record. Palantir did not

submit a revised declaration of Mr. Choung, thus, the court only considered whether Mr.

Choung’s expert report is admissible to the Administrative Record.

28

credibility of Mr. Choung’s expert report are baseless and have “nothing to do with

whether Mr. Choung’s report should be admitted.” According to protestor, “a careful

review of the relevant documents and testimony establishes that the Government either

misunderstands or misrepresents both Mr. Choung’s testimony and Palantir’s DIB-related

capabilities.”

As explained above, the United States Court of Appeals for the Federal Circuit has

held that the “focus of judicial review of agency action remains the Administrative Record,

which should be supplemented only if the existing record is insufficient to permit

meaningful review consistent with the APA [Administrative Procedure Act, 5 U.S.C.

§§ 701-706].” Axiom Res. Mgmt., Inc. v. United States, 564 F.3d at 1381. When

necessary for meaningful judicial review, the court may supplement an administrative

record with an expert report in order to improve or clarify the court’s understanding of an

important issue in a bid protest. See Dyncorp Int’l, LLC v. United States, 125 Fed. Cl. at

3 (including expert report in the administrative record that aided “the Court in better

understanding the record”). As noted in FirstLine Transportation Security, Inc. v. United

States, “[s]everal post-Axiom decisions have allowed supplementation of the record when

necessary for the Court to have a complete understanding of the issues before it.”

FirstLine Transp. Sec., Inc. v. United States, 116 Fed. Cl. 324, 326 (2014). Other judges

of this court have held “that it is appropriate to supplement the record with expert

testimony when necessary to assist the Court in understanding technical or complex

information involved in a challenged procurement.” NCL Logistics Co. v. United States,

109 Fed Cl. 596, 613 (2013); see also Lab. Corp. of Am. Holdings v. United States, 116

Fed. Cl. 386, 390 (2014) (admitting expert declaration because the “expertise will greatly

assist the Court in understanding the evidence in the administrative record”); Guzar

Mirbachakot Transp. v. United States, 104 Fed. Cl. 53, 63 (2012) (holding that “[e]ffective

judicial review would be impeded where technical aspects of the procurement process

remain unexplained, preventing the parties from engaging in informed advocacy and the

Court from developing a full judicial record and accurate context for its decision”); East

West, Inc. v. United States, 100 Fed. Cl. 53, 57 (2011) (explaining that information

necessary for effective judicial review “might include tacit knowledge possessed by offeror

and agency personnel of a highly technical and complex nature. . .”). Expert testimony

may be offered to assist the court in understanding complex or technical information. See

NCL Logistics Co. v. United States, 109 Fed. Cl. at 613.

In this bid protest, although the court acknowledges some of defendant’s concerns

with regard to Mr. Choung’s credibility as an employee of protestor and as an expert

witness, the court finds that, given the highly technical nature of the Army’s requirements

and Palantir’s capabilities, expert reports are necessary for the court to effectively review

aspects of the challenged agency procurement action at issue in this bid protest.

Specifically, in order to determine whether Palantir may have a commercially available

product that would satisfy the Army’s requirements, such that Palantir was prejudiced by

the Army’s decision to issue a development-only solicitation, the court finds it appropriate

to consider the expert reports offered by both protestor and defendant. Defendant’s

arguments about Mr. Choung’s credibility, while noted by the court, did not eliminate the

probative value of Mr. Choung’s report, so as to warrant a decision to exclude Mr.

Choung’s expert report. The court evaluated Mr. Choung’s expert report in relation to all

29

the evidence in the Administrative Record. In this pre-award bid protest, which the agency

and protestor were eager to resolve as fast as possible, both parties were allowed to

designate one available expert witness, and then permitted to depose the opposing

party’s designated expert witness. Defendant had the opportunity to challenge Mr.

Choung’s allegedly inaccurate statements about the 2012 DMO testing results during the

deposition of Mr. Choung. The deposition transcript was available for the court’s

consideration and has been reviewed by the court. Accordingly, the Administrative

Record in this bid protest has been supplemented with the expert report of Mr. Choung,

as well as with the expert report of Mr. Shaun Cronen, the government’s designated

expert, a “Team Lead in the Intelligence Enterprise Branch of the Intelligence and

Systems Processing (ISP) Division of the Intelligence and Information Warfare

Directorate (I2WD) within the Communications-Electronics, Research, Development and

Engineering Center (CERDEC)” of the Army.

Two days before defendant filed its motion to strike Douglas Philippone’s

declaration and Bryant Choung’s expert report, defendant filed a motion for leave to file

three declarations of its own. Defendant sought to file the declarations of “Patricia L. Lee,

Lead Engineer for the DCGS Multiservice Execution Team Office”; “Michael Sherick,

contract specialist, U.S. Army Contracting Command Aberdeen Proving Ground”; and

“Jeff Stock, Chief Engineer for DCGS-A Increment 2, U.S. Army.”22 Palantir opposed

defendant’s motion unless the court afforded Palantir the opportunity to depose each of

the three declarants and defendant was required to produce any documents referred to

by one of the declarants, Mr. Sherick. The court held a status conference with the parties

to discuss defendant’s motion, and, as discussed with the parties during the status

conference, after careful review and consideration, the court issued an Order on August

24, 2016 granting defendant’s motion for leave to file the three declarations and Palantir

was permitted to take depositions of each of the three declarants. Subsequently, after

conducting the limited discovery that the court had permitted at the July 25, 2016 hearing

and the additional discovery permitted by the August 24, 2016 court Order, Palantir

moved for additional discovery on August 26, 2016 “relating to Palantir’s allegations of

bad faith and bias.” The court held another status conference on August 30, 2016 to

discuss Palantir’s subsequent motion for additional discovery. After hearing from the

parties, the court denied Palantir’s motion because Palantir’s discovery requests were too

broad and not based on sufficient evidentiary footing, but indicated it would reconsider

Palantir’s motion for additional discovery. Shortly thereafter, at a status conference on

September 6, 2016, Palantir proposed narrower discovery requests and defendant

produced nine additional documents. The parties agree that these nine documents should

be added to the Administrative Record and the nine documents are now part of the

Administrative Record. Thereafter, the parties filed supplemental briefs to include

references to the limited discovery permitted by the court, after which, the court held oral

argument on the parties’ cross-motions for judgment on the Administrative Record.

22Although defendant refers to the declaration of “Jeff Stock,” in the declaration included

with defendant’s motion for leave to file declarations, the individual’s name is “Jess

Stock.”

30

DISCUSION

Bias and/or Bad Faith

As a threshold issue, the court considers Palantir’s argument that the solicitation

at issue in this bid protest should be set aside because, allegedly, “the Army engaged in

arbitrary, capricious, and unlawful conduct . . . by engaging in bad faith conduct.”

(emphasis and capitalization removed). Palantir argues that, pursuant to 5 U.S.C. § 706,

“this Court must set aside as unlawful any solicitation” that is “‘arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.’” Throughout this bid protest,

Palantir has alleged that a long-term pattern of bias and/or bad faith against Palantir

“infected” the agency’s decision-making process that led to the DCGS-A Increment 2

solicitation, which Palantir is challenging in this bid protest. Palantir alleges in its

complaint that the DCGS-A Increment 2 solicitation is the product of years of irrational

and bad faith conduct by program owners in certain sectors of the Army,23 and alleges

that such conduct includes “bureaucratic inertia, resistance to innovation, bias against

Palantir, the destruction of evidence, and the creation of misleading and deceptive

information.” (emphasis and capitalization removed). According to Palantir, “there is

ample evidence of malicious, bad faith conduct” that “reveals a deep-seated level of bias

against Palantir,” and that “[s]uch bias is irrational, arbitration [sic], and capricious.”

Accordingly, Palantir argues, “the Solicitation should be set aside as reflecting arbitrary

and capricious agency conduct.”

Palantir contends that the DCGS-A program owners have spent years “protecting

their own failed program,” and are resistant to any innovation from the commercial

software industry that could replace the DCGS-A, such as Palantir, and the Palantir

Gotham Platform. According to Palantir, “program owners in the Army—particularly within

the Army’s G-2 office, Intelligence and Security Command, and Intelligence and

Information Warfare Directorate of the Communications-Electronics Research and

Development Center—have resisted the Palantir Gotham Platform.” Palantir’s complaint

alleges that evidence of the Army’s bad faith conduct includes the “consistent hostility

that certain DCGS ‘program owners’ within the Army have shown to Palantir’s innovative

23 In its complaint, Palantir states:

The list of DCGS program owners involved in or associated with the DCGS-

A program include, among others, the following: Office of the U.S. Army

Intelligence Directorate (G-2, oversight and “customer” of DCGS-A);

Training and Doctrine Command; Program Executive Office Intelligence,

Electronic Warfare, and Sensors (PEO IEW&S) (parent office of PM DCGS-

A); Program Management Office, DCGS-A; U.S. Army Intelligence and

Security Command (INSCOM) (responsible for all the cloud projects, etc.);

Office of the Assistant Secretary of the Army for Acquisition, Logistics, and

Technology (ASA(ALT)); and various actors within the Defense Acquisition

System, including the Joint Requirements Oversight Council (JROC), the

Joint Capabilities Integration and Development System (JCIDS), and

others.

31

technology,” the suppression of “independent reports that were critical of DCGS-A and

complimentary of the Palantir Gotham Platform,” and the creation of “misleading

presentations for Congress and senior Department of Defense officials with inaccurate

descriptions of Palantir’s capabilities.”

In opposition to Palantir’s bias and/or bad faith allegations, defendant argues that

“Palantir’s claims are not supported by the administrative record.” Defendant also asserts

that “[t]he contracting officer and agency decision is entitled to a presumption of

regularity.” According to defendant, “[i]n order to overcome the presumption of good faith

and administrative regularity, the protestor must present ‘almost irrefragable proof’” of

bias or bad faith. (quoting Galen Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330

(Fed. Cir.), reh’g denied (Fed. Cir. 2004)). Although defendant acknowledges that “[t]he

discovery permitted by the Court revealed a tension in the business relationship between

the Army and Palantir,” defendant asserts that “Palantir’s arguments do not meet the

stringent standard for proving bad faith.” Defendant argues that none of the limited

discovery that the court had permitted produced any evidence of bias and/or bad faith,

and Palantir’s mere disagreement with the overall agency policy decision does not

demonstrate an individual, much less institutional, bias and/or bad faith.

In order to prove that a government official’s actions were biased, a protestor must

overcome the well-established presumption that government officials act in good faith.

See Croman Corp. v. United States, 724 F.3d 1357, 1364 (Fed. Cir. 2013) (“The

presumption that government officials act in good faith is enshrined in our

jurisprudence.”); see also Galen Med. Assocs., Inc. v. United States, 369 F.3d at 1337. A

protestor must offer “clear and convincing evidence” that the government did not act in

good faith in order to prevail. See Croman Corp. v. United States, 724 F.3d at 1364; see

also Am-Pro Protective Agency, Inc. v. United States, 281 F.3d 1234, 1239 (Fed. Cir.

2002). The United States Court of Appeals for the Federal Circuit has addressed the

standard for overcoming the presumption of good faith as follows:

Government officials are presumed to “act ‘conscientiously in the discharge

of their duties.’” Kalvar Corp., Inc. v. United States, 543 F.2d 1298, 1301

(Ct. Cl. 1976) (quoting Librach v. United States, 147 Ct. Cl. 605, 612

(1959)). Courts have always been “loath to find to the contrary,” and to

induce a court to abandon the presumption of good faith dealing, “requires

‘well-nigh irrefragable proof.’” Id. at 1301-02 (quoting Knotts v. United

States, 128 Ct. Cl. 489, 492, 121 F. Supp. 630 (1954)). Thus, [a protestor]

must offer clear and convincing evidence that [the government] did not act

in good faith in order to prevail on this issue. Am-Pro Protective Agency,

281 F.3d at 1239-40.

Croman Corp. v. United States, 724 F.3d at 1364; see also Savantage Fin. Servs. v.

United States, 595 F.3d 1282, 1288 (Fed. Cir. 2010); Am-Pro Protective Agency, Inc. v.

United States, 281 F.3d at 1239 (“The presumption that government officials act in good

faith is nothing new to our jurisprudence. See, e.g., Knotts v. United States, 128 Ct. Cl.

489, 492, 121 F. Supp. 630 (1954) (stating ‘we start out with the presumption that the

official acted in good faith’).”); Square One Armoring Serv., Inc., v. United States, 123

32

Fed. Cl. 309, 329 (2015) (holding that a plaintiff alleging that the government has acted

in bad faith must offer well-nigh irrefragable proof in support of its claim); Austin v. United

States, 118 Fed. Cl. 776, 790 (2014) (“To overcome this presumption, the plaintiffs must

produce ‘well-nigh irrefragable proof’ of bad faith on the part of the government.”); Kogan

v. United States, 112 Fed. Cl. 253, 266 (2013) (“The presumption of good faith ‘is valid

and binding unless well-nigh irrefragable proof is offered to rebut or overcome it.’

McEachern v. Office of Pers. Mgmt., 776 F.2d 1539, 1545 (Fed. Cir. 1985).”).

The presumption that government officials act in good faith, however, is rebuttable

and not automatically accepted by the court. The Federal Circuit in Am-Pro Protective

Agency defined the “clear and convincing” standard of proof a protestor must meet to

prevail as:

A requirement of proof by clear and convincing evidence imposes a heavier

burden upon a litigant than that imposed by requiring proof by preponderant

evidence but a somewhat lighter burden than that imposed by requiring

proof beyond a reasonable doubt. “Clear and convincing” evidence has

been described as evidence which produces in the mind of the trier of fact

an abiding conviction that the truth of a factual contention is “highly

probable.”

Am-Pro Protective Agency, Inc. v. United States, 281 F.3d at 1240 (quoting Price v.

Symsek, 988 F.2d 1187, 1191 (Fed. Cir. 1993)) (internal citations omitted in original and

emphasis in original). Moreover, the Federal Circuit described the type of proof necessary

to establish that a government official acted in bad faith by “clear and convincing”

evidence, as

equated with evidence of some specific intent to injure the plaintiff. Thus,

in Gadsden v. United States, [111 Ct. Cl. 487, 489-90 (1948),] the court

compared bad faith to actions which are “motivated alone by malice.” In

Knotts, the court found bad faith in a civilian pay suit only in view of a proven

“conspiracy . . . to get rid of plaintiff.” Similarly, the court in Struck Constr.

Co. v. United States, [96 Ct. Cl. 186, 222 (1942),] found bad faith when

confronted by a course of Governmental conduct which was “designedly

oppressive.” But in Librach, [v. United States, 147 Ct. Cl. 605 (1959),] the

court found no bad faith because the officials involved were not “actuated

by animus toward the plaintiff.”

…

Nothing in Brown’s affidavit [whereby Am-Pro attempted to show bad faith],

moreover, suggests that the government “had a specific intent to injure” Am-

Pro. Caldwell [& Santmyer, Inc. v. Glickman,] 55 F.3d [1578,] 1581 [(Fed.

Cir. 1995)]. And Am-Pro has not alleged that these threats were “motivated

alone by malice,” Gadsden v. United States, 111 Ct. Cl. 487, 489, 78 F.

Supp. 126 (1948); as part of a proven “conspiracy . . . to get rid of [Am-Pro],”

Knotts, 128 Ct. Cl. at 500, 121 F. Supp. 630; as part of a course of

33

governmental conduct which was “designedly oppressive,” Struck, 96 Ct.

Cl. at 222; or as “actuated by animus toward” Am-Pro, Librach, 147 Ct. Cl.

at 614.

Am-Pro Protective Agency, Inc. v. United States, 281 F.3d at 1240, 1241 (quoting in part

Kalvar Corp. v. United States, 211 Ct. Cl. 192, 543 F.2d 1298, 1302 (1976), cert. denied,

434 U.S. 830 (1977)) (citations omitted in original); see also Galen Med. Assocs., Inc. v.

United States, 369 F.3d at 1330 (“‘[A]llegations of bad faith . . . ha[ve] been equated with

evidence of some specific intent to injure the plaintiff.’” (quoting Torncello v. United States,

231 Ct. Cl. 20, 45, 681 F.2d 756, 770 (1982))); Info. Tech. & Applications Corp. [ITAC] v.

United States, 316 F.3d 1312, 1323 n.2 (Fed. Cir.) (“ITAC has pointed to no record

evidence of bias. Instead it has merely reiterated its contentions that the Air Force erred

in evaluating the proposals. This is not evidence of bias, and it is insufficient to overcome

the presumption that the contracting officer acted in good faith.”) (citations omitted), reh’g

and reh’g en banc denied (Fed. Cir. 2003); Dekatron Corp. v. United States, 128 Fed. Cl.

115, 118 (2016) (“Bad faith has been found when a contracting officer representative acts

with specific intent to injure or the contracting officer fails to exercise independent

judgment or remedy the contracting officer representative’s animus. . . .”); Madison Servs.

Inc. v. United States, 94 Fed. Cl. 501, 507 (2010) (“Because plaintiff submits as evidence

unsubstantiated innuendo and uncorroborated inferences, evidence that categorically

cannot meet a ‘clear and convincing’ standard, the court must deny plaintiff’s requests for

relief.”) (citations omitted); id. at 511 & 511 n.8 (adding unreliable hearsay and attorney

arguments to the list of what will not meet the standard for demonstrating bad faith); L-3

Commc’ns Integrated Sys., L.P. v. United States, 91 Fed. Cl. at 354 (innuendo or

suspicion is not enough to demonstrate bad faith); N. Star Alaska Hous. Corp. v. United

States, 76 Fed. Cl. 158, 187-88 (“Courts have found bad faith when confronted by a

course of government conduct that was ‘designedly oppressive,’ Struck Constr. Co. v.

United States, 96 Ct. Cl. 186, 222, 1942 WL 4411 (1942), or that ‘initiated a conspiracy’

to ‘get rid’ of a contractor, Knotts v. United States, 128 Ct. Cl. 489, 121 F. Supp. 630, 636

(1954).”), appeal dismissed, 226 F. App’x 1004 (Fed. Cir. 2007).

To support its theory that a long-term climate of bias against Palantir “infected” the

path towards the solicitation, Palantir points to specific instances of alleged bias that it

asserts occurred between 2009 and the present, and asks “the Court to give particular

consideration to” those instances. According to Palantir, those instances cannot “be

explained away, and can only mean that there was an entrenched bias against Palantir

among certain DCGS-A program owners and G-2 staff within the Army.” Palantir suggests

that “the supplemental record supports a finding that certain personnel within the Army

had a bias against Palantir.” Palantir asserts that these alleged instances include: the

Army’s efforts to “block” Palantir from participating in certain “important” evaluations

between 2009 and 2011; false statements by the DCGS Program Manager to Congress

about Palantir; an e-mail from Army Major Greg Moore stating that there is an “entrenched

animosity” towards Palantir; the creation and distribution of documents by G-2 staff that

contained inaccurate statements about Palantir’s capabilities; efforts by Army personnel

to rescind and alter a report with favorable findings and recommendations regarding

Palantir; and the Army’s failure to investigate Palantir’s specific allegations of senior Army

personnel “blocking” requests in the field for Palantir’s technology.

34

According to Palantir, the Army’s G-2 staff and DCGS-A program owners blocked

Palantir from participating in Joint Intelligence Laboratory (JIL) and DCGS-A Systems

Integration Laboratory (SIL) evaluations between 2009 and 2011 that, according to

Palantir, would have helped to demonstrate Palantir’s ability to satisfy the requirements

set forth in the DCGS-A Increment 2 procurement, prior to the issuance of the solicitation.

Palantir alleges that, in 2009, “Palantir attempted to undertake an evaluation at the Joint

Intelligence Laboratory.” Palantir alleges, however, that “[j]ust before Palantir’s JIL

evaluation was scheduled to take place,” an Army official e-mailed a Palantir employee,

Douglas Philippone, notifying him that the evaluation was cancelled. Similarly, according

to Palantir, in November 2010, a contract was in place for Palantir to undergo testing at

the SIL. Palantir alleges that the SIL evaluation also never occurred. Palantir alleges that

it was “repeatedly blocked” from participating in testing at the SIL, which would have

demonstrated Palantir’s capabilities to the Army. Palantir alleges that “the Army has never

given a plausible explanation for why it blocked Palantir from participating” in either a JIL

or SIL evaluation.

Defendant asserts that the Army gave reasonable explanations for why the JIL and

SIL evaluations did not occur and that the deposition testimony of Ms. Schnurr and Mr.

Cronen corroborated those explanations. Defendant also argues that “the majority of

events that Palantir claims constitute ‘blocking’ are events that are 4 to 11 years prior to

the solicitation at issue, and are outside the relevant period of time to have any impact on

the current procurement.” Additionally, according to defendant, “Palantir has failed to

demonstrate what, if any, impact these events had” with respect to the choices made

regarding the DCGS-A Increment 2 solicitation.

The e-mail sent from the Army to Palantir cancelling the JIL evaluation on February

27, 2009, more than six years before the solicitation was issued, explains that:24

Lynn [Schnurr] is out of the office dealing with personal matters right now

and has authorized me to handle this matter. As of right now, the JIL

evaluation is cancelled.

...

The rationale for this decision is that the best way to focus your efforts at

this time is with the DCGS-A Mobile lead systems integrator, Northrup

Grumman. My understanding is that you have already begun discussions

with them so there should be no disconnect there. This provides the most

direct route to potential DCGS-A integration and fits cleanly into their

established business process. I understand that Palantir has a lot to offer

and ask that you concentrate your efforts on this vector and allow the PM

process to work and enable their LSI [lead systems integrator] to build the

24Although Palantir did not move to supplement the Administrative Record with this e-

mail, counsel for Palantir used this e-mail as an exhibit during the deposition of Lynn

Schnurr, which deposition the court has deemed necessary for effective judicial review.

35

best system possible for our Soldiers.

During the deposition of Ms. Schnurr, counsel for Palantir asked Ms. Schnurr about

the cancellation of the JIL evaluation, and referenced the above e-mail as an exhibit to

the deposition. Palantir points to the deposition testimony of Lynn Schnurr as support for

its allegation that the Army blocked Palantir from undergoing the JIL evaluation. The

deposition transcript of Ms. Schnurr indicates that she had difficulty recalling the reason

that the JIL evaluation was cancelled. When Palantir’s counsel asked Ms. Schnurr the

reason for the cancellation of the 2009 JIL evaluation, Ms. Schnurr responded: “My

understanding -- and again, that’s a long time ago -- was that it was a funding issue.” After

Palantir’s counsel showed Ms. Schnurr the e-mail cancelling the JIL evaluation, however,

Ms. Schnurr stated: “Sitting here today, based on what you’ve shown me, it looks as if the

recommendation was to not move forward with a JIL evaluation but to have them work

directly with Northrup Grumman to move things forward in a direct manner to help get

Palantir capability into the program.” Ms. Schnurr also was asked:

Q. Do you have any reason to believe that a company, which is a

subcontractor, would be precluded from participating in the Joint

Intelligence Laboratory evaluations?

A. I don’t know, but I would assume it would be okay.

Q. You’d assume it would be okay?

A. Uh-huh. But I don’t know.

...

Q. Why is working with Northrop Grumman mutually exclusive from getting

an evaluation under the JIL?

A. I wouldn’t think it is mutually exclusive.

Q. Then why did you cancel the JIL evaluation?

A. I did not cancel it personally.

Palantir asserts that, by testifying that Palantir could have been evaluated at the JIL and

simultaneously have worked with Northrup Grumman, “Ms. Schnurr effectively admitted

that the rationale given” for cancelling the JIL evaluation “did not make any sense.”

Palantir, however, mischaracterizes Ms. Schnurr’s testimony. While Ms. Schnurr did, in

fact, testify that Palantir might have been able to simultaneously work with Northrup

Grumman and undergo evaluation at the JIL, she did not, either directly or indirectly,

concede that the reason for the cancellation put forth in the e-mail to Palantir “did not

make any sense.”

Palantir argues that “the Army has never given a plausible explanation for why it

‘blocked’ Palantir from participating in this evaluation” and points to Mr. Schnurr’s

36

deposition testimony to argue that the cancellation of the JIL evaluation was motivated by

bias and/or bad faith. Palantir further asserts that Ms. Schnurr’s testimony reflects

“shifting and contradictory explanations that reveal a lack of candor and credibility as to

the reasons why this evaluation was cancelled.” Without further evidence, however,

Palantir’s position remains based only on allegations and suspicions of bias. The

apparent inconsistencies with Ms. Schnurr’s testimony could be attributed to her failed

memory after the passage of approximately seven years from the events in question to

the date of the deposition. Moreover, Ms. Schnurr testified that she “did not cancel the

JIL evaluation personally.” Without more evidence of intent, the e-mail sent to Palantir

cancelling the JIL evaluation on February 27, 2009 does not offer sufficient evidence of

bias and/or bad faith on the part of the agency as it relates to the developmental

solicitation for DCGS-A Increment 2.

Palantir’s counsel also asked Ms. Schnurr about the SIL evaluation cancellation

during her deposition. Ms. Schnurr was asked: “Did Palantir ever undergo an evaluation

in the SIL?” To which she responded: “I think they did, but I don’t recall all the details of

it. It’s been so long, but I know they did.” Palantir’s counsel asked additional questions

about the SIL evaluation, but it is apparent from her deposition testimony that Ms. Schnurr

was not involved with the SIL. Ms. Schnurr stated: “I don’t recall because I didn’t work the

SIL, didn’t have any responsibility for the SIL;” “Again, that SIL work was totally separate

in my office. We had nothing to do with that;” “Again, I did not work the SIL;” and, later, “I

don’t know the details of what happened in the SIL.” Given her testimony that she was

not involved with the SIL and did not remember anything about the SIL evaluation, her

testimony as to why the SIL evaluation did or did not occur does not provide support for

protestor’s allegations. In addition, the JIL and SIL evaluations were cancelled between

2009 and 2011, years before the solicitation at issue in this bid protest was released.

Given the lapse in time, it is unclear, without further evidence, whether those cancellations

between 2009 and 2011 were directly related to the decision to issue the DCGS-A

Increment 2 procurement as a developmental one. Therefore, Palantir’s allegations of

“blocking” of the JIL and SIL evaluations do not provide sufficient evidence to demonstrate

bias or bad faith. As stated above, a protestor must show “clear and convincing evidence”

to prevail on a claim of bias and/or bad faith and Palantir has failed to do so with regards

to the JIL or SIL evaluations. See Croman Corp. v. United States, 724 F.3d at 1364.

Related to Palantir’s allegations that the Army “blocked” the JIL and SIL

evaluations, Palantir alleges that “[a]fter Palantir was blocked from conducting the SIL

evaluation, the DCGS-A Program Manager, Colonel Wells” made inaccurate statements

to Congress about the SIL evaluation. Specifically, Palantir alleges that Army Colonel

Charles Wells told Congress, not only that the SIL evaluation had occurred, but also, “that

Palantir was unwilling to fully integrate its product with DCGS-A,” and that the evaluation

revealed that Palantir’s features limited intelligence collaboration and sharing. According

to Palantir, Colonel Wells communicated this inaccurate information to Congress via

Information Papers on September 30, 2011 and October 18, 2011. Defendant argues,

however, that the statements in the Information Papers submitted to Congress do not

demonstrate bias and/or bad faith. Similar to Palantir’s allegations that the JIL and SIL

evaluations were “blocked” by the Army, Palantir’s allegation that inaccurate statements

made to Congress are evidence of the Army’s bias and/or bad faith is not supported by

37

the Administrative Record. Palantir’s assertion that the Army communicated to Congress

information that may have been inaccurate does not, without further evidence, establish

that the representations made to Congress were motivated by bias and/or bad faith on

the part of the critical decision makers regarding the DCGS-A Increment 2 solicitation. It

is not clear in the Administrative Record what was the source of the alleged incorrect

information or whether the information was utilized by the decision makers who produced

the developmental procurement at issue in this protest.

In addition to the allegedly “blocked” JIL and SIL evaluations, Palantir also alleges

that the “former Chief Information Officer for G-2,” Lynn Schnurr, and the “former Deputy

Chief of Staff of the Army for G-2 (Intelligence),” Lieutenant General Mary Legere, were

biased against Palantir and acted on that bias. To support Palantir’s allegations, Palantir

points to several instances that allegedly occurred after 2011. For example, Palantir

points to an e-mail sent on November 6, 2015, that pertained to a slide presentation on

the DCGS-A Program and Palantir’s capabilities. The author of the e-mail, Colonel Jack

Dills, stated: “Apparently LTG Legere had some issues with the brief and afterward

expressed her issues to MG [Major General] Ostrowski.” According to Palantir, in an e-

mail sent on March 10, 2012 to Douglas Philippone of Palantir, Army Major Greg Moore

admitted that G-2’s Chief Information Officer, Lynn Schnurr, had an “entrenched

animosity” toward Palantir “which has been spread and inculcated into the DA staff.”

(emphasis removed). Additionally, Palantir alleges that, at some unidentified point prior

to December 15, 2011, Ms. Schnurr gave negative feedback about Palantir that led a

defense contractor to decide against working with Palantir. To support this allegation,

Palantir relies on another e-mail from Army Major Greg Moore, dated December 15, 2011,

in which he stated that “[n]egative feedback from the DA G2 CIO [Lynn Schnurr] at the

time caused Lockheed Martin [the contractor] to wave off” and enter into discussions with

companies other than Palantir. Palantir also alleges that Lynn Schnurr and Lieutenant

General Mary Legere circulated various documents that contained “inaccurate” and

“misleading” information about Palantir, including, but not limited to, a July 2012

memorandum that discussed Palantir’s capabilities and an undated venn diagram that

was allegedly distributed among Army officials and purported to compare Palantir’s

capabilities with that of DCGS-A. (internal citations omitted). The venn diagram depiction

appeared as follows:

38

DCGA-A Lite

DCGS-A

PALANTIR

SIGINT

HUMINT

MASINT

Ease of

CELLEX GMTI

Link Use

IMINT DOMEX

Analysis

Geospatial

Joint Interoperability

MSN CMD System Visualization

Interoperability

Open Source

Data Sharing

Mapping

Easily

Trained

Disconnected/

Low Bandwidth

Defendant argues that Palantir’s claim that the Army G-2 circulated inaccurate information

about Palantir’s capabilities lacks merit because the information was believed to be

accurate at the time it was distributed. Defendant further argues that Palantir has

misstated or mischaracterized the deposition testimony of Lieutenant General Legere in

its attempt to support its allegations of bias and bad faith. Defendant asserts that Ms.

Schnurr’s deposition testimony “demonstrates the Army [sic] intent to work with Palantir

and integrate the Palantir Platform into the DCGS.”

As indicated above, Palantir was given the opportunity to depose Lieutenant

General Legere and Ms. Schnurr. During the depositions, counsel for Palantir asked

Lieutenant General Legere and Ms. Schnurr about the allegedly inaccurate information

39

that was circulated about Palantir within the Army. Specifically, Lieutenant General

Legere was asked about a July 2012 Information Paper to Congress and slide

presentation that included the venn diagram depicting Palantir’s capabilities. Palantir’s

counsel asked Lieutenant General Legere about the accuracy of these documents and

several of the statements contained therein. In response to questions about the accuracy

of certain statements in the 2012 Information Paper, Lieutenant General Legere explained

that the statements reflected the understanding of Palantir’s capabilities in 2012.

Similarly, when questioned regarding the information about Palantir depicted in the venn

diagram, Lieutenant General Legere responded that the venn diagram reflected “our

understanding based on how we were using it [Palantir],” which was “[b]ased on the way

the soldiers were using it and the way they were describing it.” Ms. Schnurr was asked

about the accuracy of the venn diagram by Palantir’s counsel during her deposition, she

stated that “it appears to be” accurate “[b]ased on what I was told by engineers.” Similarly,

during Ms. Schnurr’s deposition, Palantir’s counsel asked her about the accuracy of

statements in the July 2012 Information Paper she had signed, and she explained that

the statements were based on “knowledge that engineers in the field had assessed”

regarding Palantir’s capabilities. Ms. Schnurr testified that as of July 2012, the July 2012

Information Paper was a fair and accurate representation of Palantir’s capabilities, and

“[a]s of February of 2012,” the venn diagram was a fair and accurate representation of

Palantir’s capabilities.

Although Lieutenant General Legere admitted during her deposition that

“everybody was sort of talking past each other,” and that, referring to Palantir and the

Army, “[b]oth sides misrepresent the capabilities of both,” her deposition testimony does

not amount to clear and convincing evidence of bias and/or bad faith.25 Instead, as even

defendant has agreed, the deposition testimony suggests lack of communication and

tension between the Army and Palantir. Lieutenant General Legere explained during her

25 During her deposition, Lieutenant General Legere was asked if she was

familiar with the fact that the solicitation that was ultimately issued in

December 2015 for the procurement of Increment 2 for DCGS sought bids

from offerors who would enter into a developmental contract on some kind

of cost-plus basis and did not seek bids from people who wanted to sell a

commercial item[.]

Lieutenant General Legere answered “no.” Although the court has serious doubts about

Lieutenant General Legere’s purported lack of knowledge regarding DCGS-A Increment

2, considering her leadership role within G-2 and her involvement with the DCGS-A

program, during her deposition, Lieutenant General Legere denied having ever said each

of the statements in the e-mail that were attributed to her, and which Palantir alleges

demonstrated the Army’s bias against Palantir. Although Lieutenant General Legere’s

credibility may be diminished in the view of the court, some of her testimony was

uncontroverted. Regarding the issues of bias and/or bad faith, her testimony, and the

testimony about her purported views, was not sufficient to carry protestor’s high burden

of proof on the issue.

40

deposition that the Army’s presentation of Palantir’s capabilities evolved and improved

over time as the Army continued to communicate with Palantir. According to Lieutenant

General Legere:

I think in our conversations in relationship with the company over time,

because really there were some serious objections to the way we were

describing this, and I absolutely understand from a stakeholder in the

company perspective why we got a little bit more -- we got much more

precise. And in turn Palantir got more precise about what DCGS is and how

what we do relates. So I think we made some progress. But in 2012, this is

kind of how we talked past each other.

Additionally, although Palantir points to the November 6, 2015 e-mail asserting that “LTG

Legere had some issues with the brief” on the DCGS-A program overview, the e-mail is

not clear as to what Lieutenant General Legere’s “issues” were with the brief. The fact

that Lieutenant General Legere may have expressed issues or concerns, in and of itself,

is insufficient to support a finding of bias and/or bad faith.

As referred to above, Palantir also relies on various e-mails written by Army Major

Greg Moore to support its allegation that Ms. Schnurr held a bias against Palantir,

specifically, Major Moore’s e-mail statements that Ms. Schnurr held an “entrenched

animosity” towards Palantir and that at some time prior to December 2011 Ms. Schnurr

gave negative feedback about Palantir to another contractor, Lockheed Martin. Major

Moore’s e-mail statements, including that Ms. Schnurr had an “entrenched animosity”

towards Palantir, is expressed as Major Moore’s impression of Ms. Schnurr’s attitude at

the time the e-mail was sent in 2012, and by itself cannot support a finding of bias or bad

faith, even animosity without further confirmation. It also is not evident from the

Administrative Record if this statement was based on any personal knowledge on the part

of Major Moore, or if he was merely repeating information obtained second-hand. The

court has not been provided any context directly from Major Moore about his statement.

Based on the limited information provided to the court regarding Major Moore’s e-mail,

the court may not depend on the accuracy or reliability of Major Moore’s statement about

Ms. Schnurr’s alleged feelings in 2012. See L–3 Commc’ns Integrated Sys., L.P. v. United

States, 91 Fed. Cl. at 358 (explaining that the court should apply the Federal Rules of

Evidence to the extra-record materials in order to ensure their reliability). Moreover, the

court permitted Palantir to depose Ms. Schnurr and the information derived from that

deposition regarding her alleged bias is more reliable and probative than what Major

Moore expressed in the 2012 e-mail. In fact, Palantir’s counsel asked Ms. Schnurr about

Major Moore’s e-mail:

Q. Is it true that you have an entrenched animosity towards Palantir?

A. No.

Q. Do you have an explanation as to why someone would say that you did?

A. That’s Major Moore.

41

Q. Do you have any explanation as to why he would say something like

that?

A. No. This is -- this is Major Moore saying this. This is not Lieutenant

Colonel Gloor saying this.

...

Q. Do you disagree with this statement that the DA [Department of the

Army] staff -- that an entrenched animosity toward Palantir has spread and

inculcated into the DA staff? Do you agree with that statement?

A. I disagree with that.

Q. Why?

A. I just – staff -- working in the Army staff, it’s a very, very busy place, a lot

of short suspenses, high optempo. And it’s just not something that people

do, is sit around and talk like that.

As the deposition transcript reflects, Ms. Schnurr rejected the notion that she had an

“entrenched animosity” towards Palantir or that a culture of animosity had spread among

“the DA staff” towards Palantir. Without more evidence to support Major Moore’s

allegation of an “entrenched animosity,” the court cannot find evidence of bias and/or bad

faith on this basis.

Moreover, Major Moore’s e-mail statement that, at some time prior to December

15, 2011, Ms. Schnurr gave negative feedback about Palantir to Lockheed Martin,

another contractor, is not sufficient proof of bias and/or bad faith. Even if the court

assumes that Major Moore’s statement is accurate, negative feedback is not itself

indicative of bias and/or bad faith. Additionally, the court is not satisfied that this e-mail is

reliable, and Palantir was given the opportunity to question Ms. Schnurr about this alleged

negative feedback during her deposition. At her deposition, Palantir’s counsel asked Ms.

Schnurr if she gave Lockheed Martin negative feedback about Palantir. Ms. Schnurr

responded: “I do not remember that” and “I don’t think so.” Even given the tentative nature

of her answer, this is simply not enough to support a finding of bias and/or bad faith on

the part of the Army regarding the DCGS-A Increment 2 procurement.

Additionally, to further support its allegations of bias and/or bad faith, specifically

against Lieutenant General Legere and Ms. Schnurr, Palantir points to the revision of a

report on Palantir’s capabilities created and published by the Army Test and Evaluation

Command (ATEC) on April 25, 2012. ATEC is “responsible for planning and conducting

developmental, independent operational test and independent evaluations and

assessments of assigned Army material, information, and acquisition systems.” “ATEC

plans, integrates, and conducts experiments, developmental testing, independent

operational testing, and independent evaluations and assessments to provide essential

information to acquisition decision makers and commanders.” (internal quotations

omitted). From March 9, 2012 to March 21, 2012, ATEC conducted “face-to-face surveys

42

and collected data on Palantir from 57 operators and 43 intermediate supervisors. . . .”

After this data was collected, ATEC started drafting the Palantir Forward Operational

Assessment Report. “The ATEC Forward Operational Assessment Report on Palantir

was approved and signed by BG [Brigadier General] Laura Richardson, the OTC

[Operational Test Command] Commanding General, on 25 April 2012.” (emphasis in

original). The approved report was “emailed directly to key individuals within USFOR-A

for their information,” distributed on the “USFOR-A SIPR Sharepoint portal,” and sent to

two Palantir field service representatives. According to Palantir, the April 25, 2012 ATEC

report on Palantir contained highly favorable recommendations and findings about

Palantir’s capabilities and was critical of DCGS-A.

Palantir alleges, however, that “[s]hortly after the ATEC Report was published, staff

within G-2 demanded that it be rescinded, destroyed, and replaced.” Specifically, Palantir

alleges that Lieutenant General Legere “directed the deletions of information favorable to

Palantir and other changes that were made to the April 25, 2012 ATEC report.” Palantir

alleges that, because the Army’s G-2 staff insisted upon the rescission and alteration of

the favorable findings and recommendations about Palantir in the April 25, 2012 ATEC

report, the report was replaced “with a modified report that removed the most favorable

language recommending Palantir and reporting on its success.” The Administrative

Record reflects that a revised ATEC report was issued on May 25, 2012.26

Defendant, however, argues that “Palantir has not alleged or demonstrated that

the program and contracting officials for the DCGS-A Increment 2 procurement had

anything to do with either the original or the corrected ATEC 2012 report.” Moreover,

defendant relies on an investigation conducted in 2012 regarding the ATEC report, which

affirmatively found that the changes to the ATEC Report were not the result

of any improper motives, but instead, the report was edited to ensure it was

prepared in accordance with the purpose of the report and to ensure that

the warfighters received the best possible product to accomplish their

mission.

Defendant asserts that “irrespective of the spin Palantir now attempts to put on the fact

that the ATEC report was edited,” allegations that the report was changed as a result of

improper influence or interference have already been laid to rest. The Administrative

Record reflects that, between July 2012 and October 2012, the Army conducted an

investigation into the circumstances surrounding the rescission and alteration of the April

25, 2012 ATEC report. Lieutenant General William Grisoli conducted the independent

investigation and produced a report with his findings and conclusions, which is contained

in the Administrative Record. According to the investigative report, Lieutenant General

Grisoli was directed

26 As with the original April 25, 2012 ATEC report, the revised May 25, 2012 ATEC report

is included in the Administrative Record.

43

to conduct an investigation into the facts and circumstances surrounding

the Army’s 2012 conduct of an informal battlefield assessment of

Palantir. . . [and] to examine the facts and circumstances surrounding

creation of one or more Forward Operational Assessment (FAO) reports by

the Army Test and Evaluation Command (ATEC) related to the Palantir

system, and any alleged efforts by one or more members of the Army G-2

to disrupt ATEC’s objective assessment of Palantir.

As part of his investigation, Lieutenant General Grisoli identified a list of 21 “key

individuals related to the events” under investigation, which included, among others, “LTG

Mary Legere, Army Deputy Chief of Staff, G-2” and “Ms. Lynn Schnurr, Army Intelligence

Chief Information Officer and Director, Intelligence Community Information Management,

Office of the DCS, G-2.”

As a result of his investigation, Lieutenant General Grisoli confirmed that ATEC

approved, and published, an initial report on Palantir on April 25, 2012 and that the ATEC

Commanding General, Major General Gino Dellarocco, subsequently directed that the

report be rescinded. Lieutenant General Grisoli concluded “that the 25 April 2012 Palantir

FOAR [Forward Operational Assessment Report] was retracted, revised and reissued as

a result of [a] determination that the recommendations contained in the initial report were

improper and were beyond the scope of what ATEC should recommend in a FOAR.”

Lieutenant General Grisoli found that:

[T]he changes made to the 25 April 2012 FOAR were not attributable to

anyone attempting to improperly advance the Army’s DCGS-A program of

record but, rather, to the ATEC leadership’s intent to ensure that the FOAR

properly reflected the strengths and weaknesses of Palantir and that the

recommendations in the report were in line with the report’s purpose.

Lieutenant General Grisoli concluded that, based on his investigation, “no member of

ATEC experienced undue or improper pressure to change the earlier FOAR, and that no

one within the Army G-2 requested that ATEC change the earlier FOAR.” Lieutenant

General Grisoli found “no communication between any member of the Army G-2 and

ATEC that was actually in furtherance of retracting and reissuing the Palantir FOA report.”

Lieutenant General Grisoli explained, “none of the emails I reviewed, or in any of the

phone conversations described by the participants, did any member of the Army G-2

specifically demand, suggest or even encourage ATEC to retract or destroy the April

Palantir FOAR.” Instead, according to Lieutenant General Grisoli, “[t]he decision to

retract, revise, and reissue the April FOAR was clearly made by ATEC leadership.”

Specifically, “[t]he decision to revise the 25 April 2012 FOAR was made by MG Dellarocco

on 2 May 2012 after a discussion with LTG Legere, the DCS, G-2.”

Additionally, Lieutenant General Grisoli explained that “there is no indication that

there was any undue or improper pressure from the Army G-2 to ‘destroy’ the April

Palantir FOAR.” Lieutenant General Grisoli found that the “‘destruction’ of the April

44

Palantir FOAR” was “intended only to avoid any confusion that likely would result from

having two published FOARs simultaneously available.”

Moreover, Lieutenant General Grisoli concluded that “there was no intent on the

part of any member of the Army G-2 to deceive any Army decision maker regarding the

effectiveness of the Palantir commercial system.” Lieutenant General Grisoli explained in

his report:

[I]t is my opinion that the Army G-2 team is passionate and a little defensive

about DCGS-A and its relationship with Palantir and that this attitude

resulted in their desire to ensure that any Army discussion of Palantir be

precise concerning capabilities, training and future acquisitions. At times,

some members of the G-2 staff lost some of their objectivity with respect to

how they presented information on Palantir and DCGS-A to Army senior

leaders. . . . However, it is clear that the Army G-2 team, along with other

staff leaders, wanted the Army’s senior leaders to understand the

capabilities of each system and ensure that our warfighters received the

best possible product to accomplish their mission.

Lieutenant General Grisoli ultimately concluded that “the coordination between the ATEC

leadership and the Army G-2, was professional and that there was no undue or improper

influence exerted by any member of the Army G-2 towards any member of ATEC.”

By alleging that the ATEC report was changed because of interference by

Lieutenant General Legere and/or Ms. Schnurr, both of whom Palantir alleges were

motivated by their bias against Palantir, Palantir would apparently have this court set

aside Lieutenant General Grisoli’s investigation and re-investigate the circumstances

surrounding the changes to the April 25, 2012 ATEC report. This court, however, is tasked

with reviewing the Administrative Record, with limited supplementation, if appropriate and

necessary for effective judicial review, and making findings based on that Administrative

Record. It would not be appropriate for this court to ignore Lieutenant General Grisoli’s

findings, which occurred much closer in time to the events under review, and the

depositions of Lieutenant General Legere and Ms. Schnurr despite their imperfect

memories. Thus, the court considers Palantir’s allegations in light of the entire

Administrative Record.

Lieutenant General Grisoli’s investigative report documents a thorough inquiry into

the circumstances surrounding the rescission and modification of the April 25, 2012 ATEC

report. Indeed, Lieutenant General Grisoli was specifically directed to investigate whether

there was any undue influence, pressure, or intent to deceive on the part of Army G-2

personnel to change the ATEC report that was originally distributed. Lieutenant General

Grisoli’s investigative report indicates that he spoke with multiple individuals, including

Lieutenant General Legere and Ms. Schnurr, about their roles in the rescission and/or

modification of the ATEC report. Based on the information he received, Lieutenant

General Grisoli set forth comprehensive remarks in his report that directly address the

allegations that Palantir asserts in this court. Although Palantir raised issues about the

completeness of Lieutenant General Grisoli’s rationale behind his findings in its

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submissions to the court, Palantir did not question Lieutenant General Grisoli’s ability to

conduct an independent investigation.

To support its bias and/or bad faith allegations, Palantir further points to the

statements in Lieutenant General Grisoli’s report that certain G-2 personnel could be “a

little defensive about DCGS-A and its relationship with Palantir” and that “[a]t times, some

members of the G-2 staff lost some of their objectivity with respect to how they presented

information on Palantir and DCGS-A to Army senior leaders.” In referring to these

statements, however, Palantir omits Lieutenant General Grisoli’s conclusion that the

cause of this defensiveness and lack of objectivity was that “the Army G-2 team, along

with other staff leaders, wanted the Army’s senior leaders to understand the capabilities

of each system and ensure that our warfighters received the best possible product to

accomplish their mission.” Lieutenant General Grisoli ultimately concluded that the G-2

staff were not motivated by bias or bad faith, but, indeed, by a strong desire to provide

warfighters with the best products. Moreover, when asked during her deposition if she

was “defensive about Palantir,” Lieutenant General Legere responded “no, I’m not

defensive. . . . I’m not defensive at all. You have an opinion that I don’t share.” Ms. Schnurr

stated at her deposition that she disagreed with Lieutenant General Grisoli’s assertion

that members of the G-2 staff sometimes lost their objectivity with respect to how they

presented information on Palantir.

In arguing that the Army insisted upon the rescission and alteration of favorable

findings and recommendations about Palantir included in the original April 25, 2012 ATEC

report, Palantir points to three specific statements that were removed from the April 25,

2012 ATEC report.27 Palantir argues that this language “removed from the April 25, 2012

27 Palantir’s supplemental brief highlights the following language that was allegedly

favorable towards Palantir and removed from the April 25, 2012 ATEC report:

1. “Easy search tools within Palantir allows Soldiers to simultaneously search

CIDNE, M3, MX (British Human Intelligence (HUMINT) system), BAT, etc.”

2. “(1) (U/FOUO) Due to connectivity issues and bandwidth restrictions in

Afghanistan, some users experienced the inability to connect to servers that

are located on different Forward Operating Bases (FOB) from where the

user operates. Recommendation: Install more Palantir servers in

Afghanistan at multiple locations to mitigate issues.”

3. “As compared to other analysis tools, ‘Palantir is far superior to the DCGS

suite. DCGS is overcomplicated, requires lengthy classroom instruction and

is an easily perishable skill set if not being used constantly.’

Recommendation: Incorporate a short training class on Palantir at the 35F

(Intelligence Analyst) Military Occupational Specialty (MOS) Advanced

Individual Training (AIT) and Company Intelligence Teams (COIST)

training. Users are able to learn the system and use the analysis tools with

46

ATEC report directly contradicts what the Army is arguing in this case.” Palantir asserts

that Lieutenant General Grisoli’s “investigation into the rescission and alteration of the

April 2012 ATEC report provides no explanation for the removal of this language.”

(emphasis in original). Palantir appears to be arguing that, in 2012, the Army intentionally,

and in bad faith, removed language in the April 25, 2012 ATEC report about Palantir’s

capabilities because the Army was biased against Palantir and sought to prevent Palantir

from receiving a future award. To the extent Palantir is asserting this argument, the court

finds it to be insufficiently supported and heavily reliant on speculation and suspicion.

In considering Palantir’s bias and/or bad faith allegations, the court considered all

of the evidence in the Administrative Record pertaining to the 2012 ATEC reports. As a

result of supplementation, the Administrative Record contained Lieutenant General

Legere’s sworn statement given on August 7, 2012 as part of Lieutenant General Grisoli’s

investigation. The sworn statement was attached as Exhibit 3 to Lieutenant General

Legere’s deposition transcript. Lieutenant General Legere explained that the

25 April draft ATEC report contained one recommendation that concerned

me. . . . [T]he particular recommendation that concerned me suggested our

Intelligence Center add 40 hours of Palantir training at Fort Huachuca as

part of our DCGS core curriculum. I believed this recommendation was not

appropriate or helpful to our Intelligence Center. . . .

Lieutenant General Legere stated that she provided her recommendation because she

assumed as the Senior Intelligence Officer (SIO) for the Army I had an

obligation to read the report and bring any concerns with recommendations

to ATEC so they could review, weigh the merits, see if any/all should be

included in what I assume will stand as a document of record.

Lieutenant General Legere also explained that, prior to April 2012, she had “no previous

exposure to the way ATEC coordinate[d] its reports.” In her sworn statement, Lieutenant

General Legere stated:

At no point did I intend to do anything to hinder or influence ATEC’s critical

mission to the Army as its independent test and evaluation organization. My

suggestion was a minor one in the context of the report and I was

comfortable that it could either be accepted as a constructive suggestion or

ignored as immaterial.

Although Palantir is correct that the information contained in the first and second ATEC

reports is different, the changes in the reports and the circumstances surrounding the

changes, although perhaps unusual, are not clear and convincing evidence of bias and/or

bad faith against Palantir.

minimal training. Offer an advanced class for NCO’s with intelligence MOSs

who may be deploying to an area with Palantir use.”

47

As evidence of bias and/or bad faith against Palantir, Palantir further alleges that

in October 2014 it notified the Army of specific alleged “‘blocking’ actions against Palantir”

by “G2 or DCGS program owners,” and that “the Army has not said whether it has

investigated any of those allegations.” Palantir’s allegation refers to an e-mail sent by

Palantir’s Douglas Philippone to an Army official in October 2014 in which he allegedly

listed “45 separate instances in which G2 or DCGS program owners engaged in specific

‘blocking’ actions against Palantir, dating back to September 2012.” Throughout this bid

protest, Palantir has attempted to admit this e-mail into the Administrative Record as

support for its bias and/or bad faith allegations. Specifically, Palantir attached the e-mail

to its July 15, 2016 motion to supplement the Administrative Record as Exhibit 52, and

also attached it to its motion for additional discovery. Defendant argues that this e-mail is

not appropriate for supplementation to the Administrative Record. Although the court did

not permit Palantir to supplement the Administrative Record with this e-mail, at the

hearing on July 25, 2016, Palantir referred to the e-mail as an exhibit when it deposed

Lieutenant General Legere.

The e-mail contains a list of alleged instances of “blocking,” however, the

information in the e-mail was communicated to the e-mail writer, Mr. Philippone, by

various individuals, and, as a result, the e-mail contains multiple levels of inadmissible

hearsay. Protestor argues that the e-mail and the statements contained therein are not

inadmissible hearsay because they are “being submitted to establish the simple fact that

Mr. Philippone sent these allegations” to the Army in October 2014, and not for the truth

of the matters asserted in the e-mail. Whether or not the e-mail was sent is not at issue.

If Palantir is not seeking to admit the allegations for the truth of the matters asserted,

including that the Army engaged in numerous efforts of “blocking” against Palantir, the

fact that the e-mail was sent does not establish that any or all of the alleged “blocking”

efforts ever occurred. Similarly, whether the Army investigated the allegations is not clear

and convincing proof of bias and/or bad faith.

In his deposition, Mr. Philippone even stated that he could not recall the

specific sources of the information contained in the e-mail:

Q. Now, these [sic] information that you’re conveying in the email dated

October 7th, 2014 to Gabe [Camarillo], did this information come to you

through other persons?

A. Yes.

Q. And who gave you this information?

A. I don’t recall specifically. But we received these reports all the time, and

so I just kept track of them. And since Gabe had requested it in very specific

form, where he literally told me, send this to me, I -- at his request, I put all

of these things -- all of the reports that I had heard in one email to send to

him.

Q. And from whom did you hear these reports?

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A. So I mean, from a variety of sources. From -- from either soldiers, FSRs

[Field Service Representatives], Palantir employees. Some of them came

from Congress.

When defendant’s counsel went through each allegation in the e-mail, and asked who

reported each allegation to Mr. Philippone, he responded to nearly each question: “I don’t

remember” and could not specifically identify the source of all of the allegations. Because

Palantir’s counsel referred to the e-mail during the deposition of Lieutenant General

Legere, and that deposition testimony is included in the Administrative Record, the court

reviewed the e-mail again and, once again, concludes that the e-mail is made up of a

series of uncorroborated allegations many of which are based on hearsay, is not

appropriate for supplementation to the Administrative Record and cannot support a

finding of clear and convincing evidence of bias and/or bad faith.

As discussed above, to succeed on its allegations of bias and/or bad faith, Palantir

must prove its claims of bias and/or bad faith by clear and convincing evidence. See Am-

Pro Protective Agency, Inc. v. United States, 281 F.3d at 1240. Even after permitting

limited supplementation to the Administrative Record with some of Palantir’s multiple

requests for discovery and several depositions, although it appears that the relationship

between Palantir and the Army was strained at times, as even defendant conceded there

was “a tension in the business relationship between the Army and Palantir,” and the Army

representatives struggled during the depositions to remember or explain potentially

unfavorable e-mails or statements about Palantir, Palantir has not produced clear and

convincing evidence of bias and/or bad faith against Palantir. This procurement has been

the subject of extensive discussion at the Department of Defense, particularly within the

Army, before Congress, and in the press. The court is mindful that the only relevant

information to be reviewed by the court is the record before the court, as supplemented

in accordance with the court’s rulings described above. The court, therefore, turns to

consider Palantir’s allegations regarding the Army’s failure to comply with 10 U.S.C.

§ 2377.

10 U.S.C. § 2377

The parties also have filed cross-motions for judgment on the Administrative

Record on the issue of the Army’s compliance with 10 U.S.C. § 2377. Rule 52.1(c) of the

Rules of the United States Court of Federal Claims (2016) (RCFC) governs motions for

judgment on the administrative record. The court’s inquiry is directed to “‘whether, given

all the disputed and undisputed facts, a party has met its burden of proof based on the

evidence in the record.’” Mgmt. & Training Corp. v. United States, 115 Fed. Cl. 26, 40

(2014) (quoting A & D Fire Prot., Inc. v. United States, 72 Fed. Cl. 126, 131 (2006) (citing

Bannum, Inc. v. United States, 404 F.3d 1346, 1356–57 (Fed. Cir. 2005))); see also Eco

Tour Adventures, Inc. v. United States, 114 Fed. Cl. 6, 21 (2013); DMS All-Star Joint

Venture v. United States, 90 Fed. Cl. 653, 661 (2010).

The Administrative Dispute Resolution Act of 1996 (ADRA), Pub. L. No. 104-320,

§§ 12(a), 12(b), 110 Stat. 3870, 3874 (1996) (codified at 28 U.S.C. § 1491(b)(1)–(4)

(2012)), amended the Tucker Act to establish a statutory basis for bid protests in the

49

United States Court of Federal Claims. See Impresa Construzioni Geom. Domenico

Garufi v. United States, 238 F.3d 1324, 1330–32 (Fed. Cir. 2001). The statute provides

that protests of agency procurement decisions are to be reviewed under Administrative

Procedure Act (APA) standards, making applicable the standards outlined in Scanwell

Labs., Inc. v. Shaffer, 424 F.2d 859 (D.C. Cir. 1970), and the line of cases following that

decision. See, e.g., Per Aarsleff A/S v. United States, 829 F.3d 1303, 1309 (Fed. Cir.

2016) (quoting NVT Techs., Inc. v. United States, 370 F.3d 1153, 1159 (Fed. Cir. 2004))

(“Protests of agency procurement decisions are reviewed under the standards set forth

in the Administrative Procedure Act (‘APA’), see 28 U.S.C. § 1491(b)(4) (citing 5 U.S.C.

§ 706), “by which an agency's decision is to be set aside only if it is arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law[.]””); Impresa Construzioni

Geom. Domenico Garufi v. United States, 238 F.3d at 1332)); Res. Conservation Grp.,

LLC v. United States, 597 F.3d 1238, 1242 (Fed. Cir. 2010) (“Following passage of the

APA in 1946, the District of Columbia Circuit in Scanwell Labs., Inc. v. Shaffer, 424 F.2d

859 (D.C. Cir. 1970), held that challenges to awards of government contracts were

reviewable in federal district courts pursuant to the judicial review provisions of the APA.”);

Galen Med. Assocs., Inc. v. United States, 369 F.3d at 1329 (citing Scanwell Labs., Inc.

v. Shaffer, 424 F.2d at 864, 868, for its “reasoning that suits challenging the award

process are in the public interest and disappointed bidders are the parties with an

incentive to enforce the law”); Banknote Corp. of Am., Inc. v. United States, 365 F.3d

1345, 1351 (Fed. Cir. 2004) (“Under the APA standard as applied in the Scanwell line of

cases, and now in ADRA cases, ‘a bid award may be set aside if either (1) the

procurement official’s decision lacked a rational basis; or (2) the procurement procedure

involved a violation of regulation or procedure.’” (quoting Impresa Construzioni Geom.

Domenico Garufi v. United States, 238 F.3d at 1332)); Info. Tech. & Applications Corp. v.

United States, 316 F.3d at 1319. The United States Court of Appeals for the Federal

Circuit has stated that the Court of Federal Claims’ jurisdiction over “any alleged violation

of statute or regulation in connection with a procurement or a proposed procurement,” 28

U.S.C. § 1491(b)(1) (2012), “provides a broad grant of jurisdiction because ‘[p]rocurement

includes all stages of the process of acquiring property or services, beginning with the

process for determining a need for property or services and ending with contract

completion and closeout.’” Sys. Application & Techs., Inc. v. United States, 691 F.3d

1374, 1381 (Fed. Cir. 2012) (emphasis in original) (quoting Res. Conservation Grp., LLC

v. United States, 597 F.3d at 1244 (quoting 41 U.S.C. § 403(2))); see also Rockies Exp.

Pipeline LLC v. Salazar, 730 F.3d 1330, 1336 (Fed. Cir. 2013), reh’g denied (Fed. Cir.

2014); Distrib. Solutions, Inc. v. United States, 539 F.3d 1340, 1346 (Fed. Cir.) (“[T]he

phrase, ‘in connection with a procurement or proposed procurement,’ by definition

involves a connection with any stage of the federal contracting acquisition process,

including ‘the process for determining a need for property or services.’”), reh’g denied

(Fed. Cir. 2008); RAMCOR Servs. Grp., Inc. v. United States, 185 F.3d 1286, 1289 (Fed.

Cir. 1999) (“The operative phrase ‘in connection with’ is very sweeping in scope.”).

When discussing the appropriate standard of review for bid protest cases, the

United States Court of Appeals for the Federal Circuit addressed subsections (2)(A) and

(2)(D) of 5 U.S.C. § 706, see Impresa Construzioni Geom. Domenico Garufi v. United

States, 238 F.3d at 1332 n.5, but focused its attention primarily on subsection (2)(A). See

Croman Corp. v. United States, 724 F.3d at 1363 (“‘[T]he proper standard to be applied

50

[to the merits of] bid protest cases is provided by 5 U.S.C. § 706(2)(A) [(2006)]: a

reviewing court shall set aside the agency action if it is “arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law.”’” (quoting Banknote Corp. of Am. v.

United States, 365 F.3d at 1350–51 (citing Advanced Data Concepts, Inc. v. United

States, 216 F.3d 1054, 1057–58 (Fed. Cir.), reh’g denied (Fed. Cir. 2000)), aff’d, 365 F.3d

1345 (Fed. Cir. 2004)))), reh’g and reh’g en banc denied (Fed. Cir. 2013) (altera

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