Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Deferred
Require DLUHC to assess commercial options for Palantir contract expiry and justify any extension.
Conclusion
DLUHC has not yet assessed what it will do when its current contract with Palantir to provide the scheme’s main data system ends in September 2024. In order to set the scheme up quickly, in March 2022, DLUHC accepted an offer from Palantir, a company on the public sector framework agreement for digital services, to provide six months of free support to create its main data system to manage and monitor scheme data. Following the free six-month trial period, DLUHC signed a 12-month contract with Palantir worth £4.5 million, excluding VAT, without any competitive process. In September 2023, it extended the contract with Palantir for a further 12-months, valued at £5.5 million, excluding VAT. The Government’s Chief Commercial Officer wrote to Palantir noting his concern about the practice of offering services to public sector customers for a zero or nominal cost to gain a commercial foothold, contrary to the principles of public procurement which usually require open competition. DLUHC is conscious of some of the criticism of the way that this contract was set up at the very beginning, and is working on a timetable to extend or re-tender the contract. However, we are nonetheless concerned that DLUHC may find it challenging to run a fully competitive procurement process before the current contract ends in September 2024. Recommendation 6: DLUHC should, as part of its Treasury Minute response, set out its assessment of its commercial options once the current Palantir contract 8 Homes for Ukraine expires. If this includes extending the contract with Palantir, DLUHC should explain how this is justified under current procurement regulations. In particular, how such a decision would be consistent with the Government Chief Commercial Officer’s concerns about departments accepting IT companies’ offers to provide free trial periods to gain a commercial foothold. Homes for Ukraine 9 1 Homes for Ukraine Visas
Government Response Summary
DLUHC is reviewing its commercial options for the Palantir contract, including a potential renewal, but cannot provide further details due to commercial sensitivity. It justified previous decisions by stating the Homes for Ukraine scheme fell under 'exceptional circumstances'.
Government Response
Deferred
HM Government
Deferred
The government agrees with the Committee’s recommendation. means that the contract can, subject to agreement of both parties, be extended until September 2025. DLUHC is undertaking work to review the options available to the department ahead of the expiry of the current Palantir contract in September 2024, including the potential to renew the contract for a final year. As this is commercially sensitive information, the department is unable to provide any further information at this time. The Government Chief Commercial Officer’s (GCCO) concerns alluded to by the Committee did not specifically relate to Homes for Ukraine which fell within the ‘exceptional circumstances’ cited by GCCO, including the need for urgency and a robust data platform to be established at pace.