• Amit Kukreja

What Does Palantir Mean By Becoming The First Software Prime?



Palantir reinforced the quote that COO, Shyam Sanker, explained at the February Morgan Stanley Technology conference: becoming the 6th prime for the US Government, the first software prime.


Well, what does this mean? We know Palantir works with the US government closely, but what does it mean to be a "prime?" How could that actually affect the business and deepen the ties they have with agencies across the US government?


Becoming Prime


The government's website states, "Prime contractors work directly with the government. They manage any subcontractors and are responsible for ensuring that the work is completed as defined in the contract."


Govconwire explains, "But, what is a DoD prime contractor and how it differs from a prime contractor? The simple answer is the former is a prime contractor dedicated in serving the Department of Defense while the latter is more open to entering contracts with other federal agencies. Large prime contractors usually dominate this industry."


So, a prime contractor with the Department of Defense is pretty much exactly what it sounds like - a prime solution to a problem the government has.


if you become a prime contractor, you are not a subcontractor. You aren't being handed contracts from other agencies that got bigger contracts from the government, you are the prime company getting those contracts directly.


As a result, you deepen your ties with the government, you get much larger contracts, and you ultimately have an infinite stream of sticky revenue because the government will always need contracting and if you are the prime choice - the government will go to you first.


Software Prime


The government has various hardware primes, including Lockheed Martin Corp, Raytheon Technologies Corp, General Dynamics Corp, etc. Yet, they do not have a clear software prime.


The government procures their software from a variety of vendors - Palantir has been one of the main ones over the past 2 decades because they have been involved in some of the most mission critical tasks for the USG.


They were also funded by the CIA's venture capital arm in order to subsidize the learning and building of their Gotham Software product. So, we know the USG has a great relationship with Palantir and has given them various contracts including an 89M Nuclear Administration Safety contract, a $116M Army Vantage contract, a $90M HHS contract, and a $43M Space Systems Command Contract.






Still, Palantir is not considered a prime contractor with the government. What if they can become one?


If Palantir is able to execute against their thesis around this mission for becoming a prime software contractor with the USG, the possibilities are endless.


  1. They will have endless opportunities to work with various government agencies

  2. They will set the precedent for European nations to want to work with them

  3. They will get larger deals and be able to build more unique government products


Becoming a software prime is very ambitious. Some would even call it impossible. If any company had the ability to provide software that could actually do what the government needed it to do in mission critical situations - it would be Palantir.


The question is if they will be able to keep delivering value in the meantime as they attempt to truly show their worth and justify a prime spot to the DOD.


Unlike Amazon, this prime delivery will not take 2 days.


Thanks for reading the article. If you'd like to get in contact, please @ me on twitter here or email me at amit@dailypalantir.com.

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