<p><strong>Palantir Technologies</strong> <span class="ticker-mention inline-flex items-center font-bold">(PLTR <span class="ml-1 text-red-900">0.79%</span>)</span> has been one of the undisputed beneficiaries of the sweeping adoption of artificial intelligence, thanks to its cutting-edge data mining capabilities. Most of the focus has been on the company's commercial business and Artificial Intelligence Platform (AIP), which has been the biggest driver of Palantir's recent growth spurt. However, its government contracts are back in the spotlight this week, as the company struck its next major deal.</p>
<p>Reports emerged late Thursday that Palantir landed a $1 billion software purchase agreement with the Department of Homeland Security (DHS).</p>
<div><img alt="Palantir logo on the wall above the shadow of a person walking by." width="880" height="586" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTczMzQvcGFsYW50aXItbG9nby1vbi10aGUtd2FsbC1hYm92ZS10aGUtc2hhZG93LW9mLWEtcGVyc29uLXdhbGtpbmctYnkuanBnJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84NTczMzQvcGFsYW50aXItbG9nby1vbi10aGUtd2FsbC1hYm92ZS10aGUtc2hhZG93LW9mLWEtcGVyc29uLXdhbGtpbmctYnkuanBnJnc9Mzg0MA"/>
<p>Image source: Getty Images.</p>
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<h2>Carte blanche?</h2>
<p>The groundbreaking five-year blanket purchase agreement (BPA), which was published last week, &#34;is to provide Palantir commercial software licenses, maintenance, and implementation services departmentwide,&#34; according to a report by Wired. </p>
<p>The deal streamlines the DHS process for procuring software from Palantir, allowing agencies, including Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE), to bypass the normal competitive bidding process for purchases of up to $1 billion, according to the report. The BPA includes pre-approved pricing for specific products and services. For context, Palantir generated $1.4 billion in revenue during the fourth quarter, so this deal moves the needle.</p><div><div id="foolcom_sidebar_top_container"></div></div>
<h2>Dissent in the ranks</h2>
<p>This deal isn't without a measure of controversy. Late last month, after the killing of nurse Alex Pretti in Minneapolis, reports emerged that Palantir employees expressed concerns about the ethics of the company's continuing relationship with DHS, and more specifically, ICE. </p><div></div>
<section><div><div><div><small><div>Expand</div></small></div><div><img alt="Palantir Technologies Stock Quote" width="64" height="64" src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1BMVFIucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1BMVFIucG5nJnc9MTI4"/></div><div><h2>NASDAQ: PLTR</h2><div>Palantir Technologies</div></div></div><div><div><div>Today's Change</div><div>(-0.79%) $-1.06</div><div>Current Price</div><div>$133.83</div></div><div></div></div></div><div><div></div><div><h3>Key Data Points</h3><div><div>Market Cap</div><div>$322B</div><div>Day's Range</div><div>$131.18 - $135.16</div><div>52wk Range</div><div>$66.12 - $207.52</div><div>Volume</div><div>1.6M</div><div>Avg Vol</div><div>45M</div><div>Gross Margin</div><div>82.37%</div></div></div></div></section>
<p>Palantir has been providing software and services to DHS since 2011, so this isn't a recent development. However, this latest deal represents a significant extension of its relationship with the agency.</p><div><div id="in_line_article_pitch_container"></div></div>
<p>In an email to Palantir workers, Akash Jain, Palantir's chief technology officer, addressed the arrangement, saying that this five-year deal could open the door to expanding relationships with additional U.S. government agencies, including the U.S. Secret Service (USSS), the Federal Emergency Management Administration (FEMA), the Transportation Security Administration (TSA), and the Cybersecurity and Infrastructure Security Agency (CISA).</p>
<h2>What it means for investors</h2>
<p>We don't know <em>exactly</em> when this agreement was signed, so it may already be baked into Palantir's recent financial results. The company's remaining performance obligation (RPO) soared from $2.6 billion in Q3 to $4.2 billion in Q4, an increase of $1.6 billion in just three months. That suggests the recent deal with DHS <em>may</em> already be reflected in Palantir's financial statements, but we'll have to wait until the company's Q1 report to know for sure.</p>
<p>On the other hand, it <em>does</em> illustrate how a single U.S. government contract can add hundreds of millions, or even billions of dollars, to Palantir's backlog, which forms the foundation for the company's future growth. It also helps dispel the notion of a slowdown in AI adoption.</p><div id="article_pitch_container"></div><div id="promobox_container"></div>

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<p>Palantir Technologies has secured a $1 billion software purchase agreement with the Department of Homeland Security (DHS) under a five-year blanket purchase agreement. This deal allows DHS agencies to procure Palantir's software without the usual competitive bidding process. While the agreement could enhance Palantir's relationships with other government agencies, it has sparked ethical concerns among employees regarding its ties with DHS and ICE. The deal is expected to significantly impact Palantir's financial outlook, potentially reflected in its upcoming Q1 report.</p>

- Palantir Technologies has secured a $1 billion software purchase agreement with the Department of Homeland Security (DHS), streamlining its software procurement process across various agencies.  
- This five-year blanket purchase agreement facilitates bypassing the competitive bidding process for software purchases, which may significantly impact Palantir's financial outlook, as evidenced by a rise in its remaining performance obligation.  
- Concerns have emerged regarding the ethical implications of Palantir's relationship with DHS, particularly in light of its services to Immigration and Customs Enforcement (ICE).

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Palantir Landed Its Next $1 Billion Deal