JD Vance’s Patron’s Firm Scores Over Billion in No-Bid Contracts

Corruption

Aug 23

NEWS & RESEARCH

Since the start of Trump's second term, the Federal Aviation Administration (FAA) has run much of its data and software systems through a single company: Palantir, the analytics firm co-founded by Peter Thiel—a Republican megadonor, longtime mentor to Vice President JD Vance, and the author of a 2009 essay arguing that democracy and freedom are incompatible. In 2025, Palantir won a no-bid contract with the FAA to build AI-powered runway collision avoidance tools, and later that year received another to add AI to the FAA's grants system. And even when the FAA did open bidding in 2026, the contract language specifically called for "an ontology-driven Foundry Operating System," naming two proprietary Palantir products, meaning the contract was written so that only Palantir could win it, which it did. The Pentagon, the Department of Health and Human Services, the Department of Agriculture, ICE, and the IRS have also awarded Palantir contracts as well. While the company had spent most of its existence as a fringe government contractor, since 2024, it has taken in roughly $3.2 billion in federal contract obligations—about half through no-compete contracts—and the administration keeps giving it more: Palantir’s revenue from US government customers reached $809 million in the second quarter of 2026, up 90 percent from a year earlier.

SOURCES: The Verge| Revolving Door Project | Defense One

ANALYSIS & OPINION

2025 was the worst year for airline on-time performance in over a decade, with one in four flights delayed, diverted, or canceled—nearly 1.7 million disruptions in all. Tarmac delays of three hours or more, in which airplanes are held on the ground but passengers must stay on board, were up 64% from the previous year. Trump’s “One Big Beautiful Bill” allocated $12.5 billion to the FAA but, as the Verge puts it, the money "seems destined for Palantir's pockets"—taxpayer dollars enriching a company whose AI tools are "completely unproven" and which has "no significant prior experience with air traffic control." And the concerns extend well beyond the FAA. Palantir has "rapidly extended itself across the entire federal government like a giant, data-sucking squid," and Amnesty International has found that the firm fails to meet its responsibility to respect human rights. In fact, its software has been used by the government to spy on federal workers and locate immigrants in real time for deportation.

SOURCES: The Verge | Amnesty International | The American Prospect | ACLU

HOW TO FIX IT

Federal action:

Congress should:

Repeal the FAA's exemption from federal competition law. Competitive bidding is the federal norm precisely to ensure taxpayers get the best deal, with narrow exemptions for urgency, national security, follow-on work, or a genuine sole source. But in 1996 Congress carved the FAA out of both the Federal Acquisition Regulation and the Competition in Contracting Act (CICA) entirely, letting the agency hand no-bid deals to contractors like Palantir without meeting the standards those laws impose or having to explain its reasoning.
However, repealing the carve-out alone would not be enough. CICA has serious flaws of its own, and the Trump administration has repeatedly stretched its loopholes to justify no-bid awards even at agencies the law does cover, citing manufactured "urgency" or claiming that only one company can do the job.
Amend the CICA to tighten the criteria for invoking those loopholes—defining "urgency" strictly, requiring independent review before they can be invoked, and mandating that every justification be posted publicly on USASpending.gov within a set timeframe.
Pass legislation requiring the Government Accountability Office (GAO) to automatically audit every no-bid federal contract above a set dollar threshold, closing the gap that lets agencies invoke exemptions without independent scrutiny. Under current law the GAO can review contract awards, but generally does so only when asked.
Pass the Protecting Our Democracy Act, which would shield Inspectors General—the independent watchdogs inside federal agencies tasked with investigating waste, fraud, and abuse—from removal without documented justification submitted to Congress. This would increase oversight by protecting IGs from retaliation if they investigated no-bid contracts within their departments.
Reintroduce and pass the Accountability in Government Contracting Act. The Senate passed it unanimously in November 2007, and the House let it die. It would have required competitive bidding for task orders above $100,000, and public posting of every sole-source order within ten business days of award, plus it would have forced the government to keep several companies on call for its largest open-ended contracts, so they compete each time work comes up rather than one vendor sitting on a years-long retainer.
Ban vendor-written specifications. Solicitations should describe what software must do, not name a company's products. Writing requirements around proprietary architecture is how the FAA solicited "an ontology-driven Foundry Operating System" and received exactly one qualified bid. Agencies should be barred from naming proprietary products unless they can demonstrate that no functional alternative exists.
Require data portability and exit rights in federal software contracts. Mandate open data schemas and transferable documentation so an agency can change vendors without rebuilding from scratch. Without such a reform, every year of incumbency becomes the justification for the next no-bid renewal, and dependency compounds into permanence. The FAA used this mechanism as an excuse to justify its Palantir contracts, saying that only Palantir possessed the “unique proprietary knowledge” of the systems they had already built.