Summary

• Ministry of Defence payments to Palantir reached £282m between April 2016 and March 2026, compared with £95.9m in published contracts.
• More than 80% of recorded payments were reportedly made under contracts awarded without competition.
• A separate £240.6m enterprise agreement runs from April 2026 to March 2029 and was awarded directly under the Procurement Act 2023.

The Ministry of Defence paid Palantir Technologies £282 million over ten years, almost three times the £95.9 million value of its publicly listed contracts with the US software company, according to an investigation of official financial and procurement records.

The analysis, published by the Financial Times, covers payments between April 2016 and March 2026. It identifies approximately £186 million more in departmental payments than the value recorded in published contract listings, while also finding that more than 80% of payments were associated with contracts awarded without competitive tendering.

The figures have prompted questions about transparency and the extent to which British technology suppliers can compete for defence software contracts. However, the difference between recorded payments and publicly listed awards does not establish that money is missing, expenditure was unauthorised or procurement law was breached.

Some contracts concerning national security are legitimately withheld from publication. The Ministry of Defence maintains that its spending is recorded through official systems and that certain agreements cannot be disclosed because of security considerations. It remains unclear whether those exemptions account for the entire difference identified by the investigation.

Two types of record give different pictures

Public procurement notices describe contractual commitments, including the supplier, scope, estimated or agreed value and procedure used to award the work. Departmental expenditure records instead show payments made during specified financial periods.

These datasets are not necessarily directly comparable. A contract may run over several years, payments may reflect amendments or additional services, and the department may rely on disclosure exemptions for sensitive purchases.

The investigation identifies a substantial gap that warrants explanation, but fully reconciling it would require examining the arrangements underlying individual payments. That includes the contracts to which the payments relate, any changes made during delivery and the legal basis for withholding particular notices.

Defence technology procurement presents particular difficulties because software can support intelligence analysis, operational planning and military decision-making. Disclosing the detailed functionality or integration of certain systems could reveal information about military capabilities.

Those restrictions do not eliminate the requirement for public accountability. Parliament and the relevant oversight bodies still need sufficient information to assess whether expenditure is authorised, whether purchasing procedures are appropriate and whether contracts represent value for money.

Labour MP Dame Chi Onwurah has criticised the limited transparency and competition surrounding the expenditure. The concern extends beyond the published financial difference to the government’s ability to evaluate alternative suppliers when an incumbent occupies a central position in important operational systems.

A new enterprise agreement extends the relationship

The ten-year analysis ends in March 2026, immediately before the start of a separate three-year Palantir enterprise agreement worth £240.6 million.

Official procurement records establish that the follow-on agreement was signed in December 2025 and runs from 1 April 2026 to 31 March 2029. It covers continued licensing and support for data analytics used in strategic, tactical and live operational defence decision-making.

The published contract description also refers to interoperability with Palantir systems operated by NATO and other allied countries. This creates requirements extending beyond software licensing into technical compatibility, information exchange and continuity of established operational processes.

The Ministry of Defence awarded the agreement directly under the Procurement Act 2023. In a parliamentary answer, defence minister Luke Pollard said the procedure reflected the need to maintain critical capabilities and the technical justification for continuing to use Palantir’s existing products and services.

The contract’s value should not be added to the £282 million historical payments total as though both represented expenditure during the same period. The earlier figure records payments made before April 2026, while the new agreement establishes a contractual commitment covering the following three years.

Continuity creates commercial dependence

Palantir’s technology integrates and analyses information from different sources, providing applications through which authorised users can examine relationships, manage data and support decisions.

In defence environments, those systems may connect information held under different security classifications and support processes whose interruption could affect important operational functions.

Replacing an established platform can require transferring data, recreating integrations, validating information security controls and retraining personnel. Depending on the system, the replacement may also need formal accreditation before it can be used for operational work.

These requirements can make incumbent software difficult to displace. A new supplier may offer useful technology, but the cost and risk of transition can influence whether a purchasing authority considers competition practical.

Long-term dependence may therefore emerge from successive decisions to extend existing capabilities. Each decision can have a defensible operational basis while also increasing the effort required to introduce competition later.

Procurement strategies can address that problem through documented exit arrangements, accessible interfaces, contractual control over data and carefully managed transition plans. Their feasibility depends on the sensitivity and technical design of the system involved.

The latest direct award illustrates the balance the department must strike between maintaining operational continuity and preserving alternatives for future technology development.

Domestic suppliers face difficult entry conditions

The British government has expressed ambitions to strengthen domestic defence technology and AI capability. Encouraging smaller suppliers to develop software for military use requires opportunities to demonstrate their products against genuine operational requirements.

Established procurement relationships can complicate those opportunities when new products must integrate with platforms controlled by an incumbent. Access to interfaces, test environments and relevant technical specifications can influence whether another company can offer a viable complementary service.

Not every defence software requirement needs to be supplied through a single platform. Separate applications and specialist services may be procured competitively where the department can define suitable technical and security boundaries.

However, introducing competing products can be more difficult where contractual or engineering arrangements make the existing supplier responsible for functionality that others cannot readily reproduce.

Techopia previously examined Palantir’s separate Metropolitan Police procurement dispute. That case involved a different public authority and contractual circumstances, although both highlight the commercial importance of preserving competition in complex public technology programmes.

The Ministry of Defence’s historical expenditure and its current enterprise agreement describe a substantial continuing relationship with Palantir. The department has explained why security considerations restrict some disclosures and why continuity supported the latest direct award, while the full reconciliation between historical payments and publicly listed contract values remains outstanding.