Palantir drops legal case against Sadiq Khan over cancelled £50mn contract

Palantir has abandoned an effort to sue London mayor Sir Sadiq Khan over the blocking of a £50mn contract with the Metropolitan Police after his office agreed to clarify that the decision was not based on the controversial US technology company’s “values or ethics”.

A joint statement by Palantir and the Mayor’s Office for Policing and Crime also made it clear that the company would be welcome to compete for future contracts with the Met, the UK’s biggest police force by officer numbers.

The settlement comes after Mopac, the public body overseeing the Met, blocked the force in May from signing a contract lasting for up to two years for Palantir to provide its Unified Operational Analytics system to the force.

The decision averts what could have been an expensive and protracted legal dispute. Palantir had demanded extensive disclosure, including searches of Khan’s emails and texts about the contract.

The deputy mayor for policing and crime, Kaya Comer-Schwartz, said when cancelling the contract that it had been a “clear and serious” breach of procurement rules for the contract to be awarded without competition.

However, a spokesman for the mayor’s office was quoted as saying the decision also reflected the “values and ethics” of Palantir.

The company, founded by rightwing libertarian entrepreneur Peter Thiel, has worked closely with the US’s Immigration and Customs Enforcement and the Israeli military as well as a number of bodies in the UK.

The company’s biggest public-sector contract is a £330mn agreement to build a “federated data platform” for the NHS.

Critics have said that Palantir regularly offers public bodies cheap or free trials with its systems in the hope of winning lucrative follow-on work without a competition. The company has insisted such claims are false and that it follows public-sector procurement best practice by engaging in pilot programmes for newly outsourced work.

In its legal challenge, launched in June, Palantir argued on the basis of the spokesman’s statement that the decision had been taken on political grounds — something Mopac denied.

In response, Mopac claimed Palantir had pursued a strategy designed to ensure it would be awarded the contract with minimal competition.

However, both said on Wednesday they were withdrawing their claims against each other and that the original decision to block the Met contract had not been based on Palantir’s values, ethics or “any other wider reporting about the company”.

The statement added: “Mopac’s consideration was based upon its statutory role of examining spend proposals, against the appropriate legal tests and the relevant guidance on procurement, governance, affordability and ensuring value for money for Londoners and in doing so it focused on the available information at the time.”

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It said that Mopac was “happy to correct any contrary impression”.

Following cancellation of the UOA contract, Mopac agreed to allow the Met to extend by 12 months a pilot programme under which Palantir software has been used to identify potential misconduct by officers.

It has not been made public precisely when the current pilot will end or when the extension is due to start.

On Friday, the Met credited Palantir’s Foundry platform for alerting it that James Deller — head of the force’s special force of volunteer officers — had used his police-issued phone to photograph sexual images sent to him on his personal device. He has been dismissed from the force.

The Met declined to comment on the settlement.