EXCLUSIVE US Deputy Secretary of Defense Stephen Feinberg has drafted a memorandum directing Defense Department subordinates to purchase up to $243.9 million in services from AI-enabled data analytics biz Palantir through March 31, 2027, without a competitive bidding process, The Register has learned.

The August 4th, 2026, memo calls for what would effectively be a sole-source or no-bid consulting contract. Its subject line is "Funding Palantir." It's unclear, our source told us, whether the deal has been finalized.

Palantir has reportedly been the beneficiary of several such contracts, including a $3.9 million no-bid USDA contact that could reach up to $13.3 million and a $30 million no-bid contract with ICE. Last year, it signed a deal with the Army worth up to $10 billion over the next decade.

Addressed to senior Pentagon leaders and field activity directors, and specifically to the Undersecretary of Defense for Acquisition and Sustainment, and the Under Secretary of Defense for Comptroller, the memo further directs those individuals to work with military leaders to identify further funding options covering the period from April 1, 2027, through December 31, 2028.

The memo is on signed letterhead from the Deputy Secretary of War. The Trump administration refers to the US Department of Defense as the Department of War pending an official name change, which is being pursued but has not yet occurred.

The memo states that Palantir "is providing valuable support to improve the efficiencies with the defense industrial base" and is helping the Defense Department better understand delays in the production and maintenance of munitions and vehicles. So, the Defense Department intends to continue funding that relationship until near the expected season finale of the Trump administration.

Greg Williams, director of the Center for Defense Information at the Project On Government Oversight (POGO), told The Register that the Defense Department generally is required to use competitive contracting practices.

"Exceptions to this requirement are defined under 10 USC 3204," Williams explained. "That same statute states that the head of an agency 'may not award a contract using procedures other than competitive procedures unless… the contracting officer for the contract justifies the use of such procedures in writing and certifies the accuracy and completeness of the justification.'

"This memo might be characterized as the Deputy Secretary of Defense merely asking his subordinates for ideas, but the lack of any reference to the need to justify this exception suggests they are either unaware of the statutory requirements for competition, or don’t believe it’s important to remind their subordinates of the importance the need to justify this non-competitive contract."

Last month, Senator Elizabeth Warren (D-MA) said that she sent a letter to Feinberg urging him to address conflicts of interest related to current Defense Department contracts. 

Warren "urged Feinberg to cut all ties with his former firm, Cerberus Capital Management, recuse himself from any Cerberus-related matters for his entire time at DoD, and increase transparency of contracting decisions for the Golden Dome missile defense program at DoD."

Cerberus does not appear to have a stake in Palantir, based on its 13F SEC filing for Q4 2025. And Feinberg's financial disclosures do not include Palantir, according to ProPublica's financial disclosure tracker. But at least a hundred administration officials appear to have some investment in the company. Palantir was co-founded by Peter Thiel, a major Trump donor and advisor during his first term, and U.S. Vice President J.D. Vance is a Thiel protégé.

In June, the US Office of Government Ethics published President Donald Trump’s 2025 certified annual financial disclosure report, which lists an investment of at least $1 million in Palantir Technologies.

Earlier this month, the company posted stronger-than-expected financial results for its second quarter, sending the stock soaring 12% the following day. CEO Alex Karp has been critical of major American AI frontier labs, and has promoted the use of open-weight models such as those created by Chinese competitors.

Palantir did not immediately respond to a request for comment.

A Department of War official told The Register: "This planning directive is standard practice and reflects our broader operational-level engagements hosted by Business Operators for National Defense (BOND).

We're told the Department "routinely issues similar funding and planning memos across a wide range of our industry partners to address procurement modernization and scaling."

"This is not exclusive to any single vendor - instead, it is a deliberate approach to connect defense industry leaders with the Department of War to accelerate production timelines.” ®