The defence department has signed a million-dollar contract with controversial data-mining company Palantir Technologies, The Logic has learned. 

It’s the first time the federal government has disclosed working with the Palo Alto, Calif.-based firm. The contract comes as Ottawa is increasing its use of data and artificial intelligence (AI), emphasizing that it wants to do so ethically and transparently.

Palantir has had an office in Ottawa for six years, but the federal government has repeatedly denied using the company’s products. Civil rights and immigration activists have criticized the company over the use of its products by U.S. law enforcement and security agencies in policing and deportations that the activists describe as discriminatory.

On March 28, Palantir was awarded a one-year contract worth $997,434 for software to be used by the Canadian Special Operations Forces Command (CANSOFCOM). The group includes units that respond to hostage situations and chemical, biological, radiological and nuclear incidents, as well as Joint Task Force 2, which conducts raids and counter-terrorism missions. In 2002, it worked with its U.S. counterparts in Afghanistan to capture and kill al-Qaeda leaders. 

The command bought a licence and access to Palantir’s Gotham platform in order to assess it, said Sue Beler, communications adviser at the Department of National Defence. The software allows organizations to integrate large data sets, find connections and patterns within the information and track individuals or identify trends. 

The government would not say what specific features of Gotham the command is testing, or for what it ultimately intends to use the technology. “At this time, due to the nature of the work, CANSOFCOM cannot provide any further details about how this capability is being assessed,” Beler said. Special forces personnel are operating the software, with Palantir “providing on-site assistance as required,” she said.

Palantir was founded in 2004 by a group including Alex Karp, an investment manager who is now CEO of the company, and Peter Thiel, a PayPal co-founder and former adviser to U.S. President Donald Trump. The company reportedly brought in US$880 million in revenue in 2018. About two-thirds of that came from corporate clients, who use its analytics tools to identify consumer trends and detect internal fraud, among other tasks; the rest came from government agencies, who use the technology to identify and monitor potentially criminal and terrorist activities and individuals. 

In March, the U.S. Army chose Palantir to build a US$800-million intelligence system for soldiers deployed in remote and difficult environments.

Palantir has been criticized by civil rights activists for its work with government agencies. The Los Angeles Police Department (LAPD) uses Gotham to identify and stop people who it predicts are likely to commit crimes. The Stop LAPD Spying Coalition, an activist group, said the agency’s predictive policing disproportionately targets racial minorities. 

In May, Mijente, a Latinx advocacy organization, released government documents showing Palantir’s software was used as part of investigations that led to charges against the families of unaccompanied children who crossed into the U.S. Palantir did not comment in those cases.

The contract is the first Palantir procurement that the federal government has disclosed. The company opened an Ottawa office in 2013. But in 2017, the defence department and Public Safety Canada both told the CBC they had never bought or used its technology, despite the news outlet identifying two former employees from Public Safety who listed using Palantir’s software as part of their duties on LinkedIn.

Beler confirmed that neither the defence department nor the Canadian Forces had awarded the company a contract before the March one. “Palantir software is not used at Public Safety, nor is it a part of our approved software list,” said Karine Martel, a communications adviser in the department. The RCMP and Communications Security Establishment, an intelligence agency, both declined to answer questions about whether they use the firm’s products. 

Palantir did not respond to multiple requests for comment.

In recent months, the federal government has announced plans to increase its use of technology in decision-making and service delivery. In January, it released a source list of 74 companies—including Palantir—pre-approved to bid on AI projects. In April, it published a new government-wide data strategy. 

Senior government officials have repeatedly said they want to use information and algorithms ethically. One of the data strategy’s goals to be completed by September is the creation of new standards for ethical data use. And, in February, the Treasury Board announced new rules for automated decision-making in government designed to ensure that “negative outcomes are reduced” and AI use is “responsible, and complies with procedural fairness.” The directive does not apply to national security-related systems.

To qualify for Ottawa’s procurement source list, companies had to meet three mandatory criteria. They included describing “how they address ethical considerations when delivering AI,” as well as providing examples of previous successfully delivered projects and detailing their workforce’s qualifications and experience.    

Public Services and Procurement Canada—which put together the source list and facilitated the defence department contract—declined to disclose how Palantir had responded to the AI ethics requirement. Stéfanie Hamel, communications adviser, said the government had considered such factors as the company’s work with U.S. security agencies in pre-qualifying it to bid on contracts.

The defence department also did not directly answer questions about the kinds of information for which it would use Gotham, but did provide a response about its storage. “All data and information will be hosted on [a] secure CANSOFCOM network,” said Beler, adding that the use of the software complies with Canadian and international laws, and federal government and Canadian Forces policies and directives.

The procurement was non-competitive, meaning other technology companies did not have the opportunity to bid on it. “At this time, there are few companies worldwide that have developed this type of software technology,” according to Beler. Gotham did not replace an existing technology, she said. 

The government also buys technology from Palantir’s U.S. defence contractor competitors. Raytheon got its last software contract with the defence department, worth $220,471, in 2015; the company was also awarded $14.6 million for radar equipment in March. Lockheed Martin—another defence contractor that sells intelligence technology—got $72,320 for “software support services” in February.

Palantir currently has five employees in Ottawa, according to LinkedIn, including two forward deployed engineers, who work with customers to customize the company’s platform to their needs by integrating data and developing applications. The firm is currently hiring for five jobs in the capital.