The Army has a new adversary in its battle to build a ground intelligence network the way it wants.

Palantir Corp., whose data processor has won praises for reliability and ease of use from troops in the field, has given written notice to the Army that it plans to file a protest lawsuit.

The Silicon Valley tech firm accuses the Army of illegally excluding its off-the-shelf software from an ongoing project to build the next version of the Distributed Common Ground System, known as Increment 2.

With millions of dollars at stake, Palantir asserts that the solicitation is written in a way to accept only newly developed systems from Army contractors.

“The solicitations refuses to solicit or accept bids from any offerers who have already built a data management platform as a commercial product and could begin immediately fielding it to soldiers in harm’s way,” Palantir says. “Instead the solicitation seeks to begin another costly and risk-prone major software development project while soldiers wait. This approach is unlawful, irrational, arbitrary and capricious.”

Palantir also argues that the Army is violating a call-to-arms from Defense Secretary Ashton Carter, who repeatedly has reached out to Silicon Valley to form partnerships with the armed forces to produce the best information technology possible.

Soldiers in war zones have complained in confidential memos that the Distributed Common Ground System, used for data storage and distribution, is unworkable, prone to crashes and too slow to process searches of the enemy.

Congress has passed legislation urging the Army to change course and start incorporating software that already is developed and proven.

During the long Afghanistan War against a hard-to-find enemy, a number of units requested Army permission to buy Palantir, only to meet resistance and delays. Those able to buy Palantir praised its speed and simplicity in answering basic questions about ongoing battles.

The common ground system gained some traction this year when the Pentagon’s top tester said it had been made operationally effective, an improvement from an earlier assessment. But the report contained a number of criticisms, such as a lengthy training period for soldiers to operate it.

The Army, which has lost a number of highly touted weapons systems, does not want its prized intelligence network to fall second to a product that it had no role in developing, congressional staffers say.

Intelligence officers want a network that can store all types of data including satellite imagery, detainee interrogations, troop movements, bomb-making locations and enemy leadership. Officers want to be able to retrieve that information quickly on any number of devices.

A stream of written complaints from the war zone in Afghanistan said the Distributed Common Ground System did not reach the Army’s coveted optimum performance.

‘Army bureaucracy in the way’

Palantir is represented by the powerhouse law firm of Boies, Schiller & Flexner LLP. David Boies represented Al Gore in the Supreme Court case that decided the 2000 presidential election.

The company’s June 16 letter quotes a memo from a senior officer in the 82nd Airborne Division.

“All the bullet points [the Army] can list on a slide sitting back in the Pentagon don’t change the reality on the ground that their system doesn’t do what they say it does, and is more of a frustration to deal with than a capability to leverage,” the officer wrote. “We aren’t going to sit here and struggle with an ineffective intel system while we’re in the middle of a heavy fight taking casualties. Palantir actually works.”

Rep. Duncan Hunter, a former Marine Corps officer who served in Afghanistan and Iraq, has been leading the charge in Congress to restructure the common ground system.

The California Republican’s chief of staff, Joe Kasper, said Palantir “is truly representing the best interests of the war fighter.”

He said that what the Army is trying to do with this solicitation is create an in-house Palantir system “to achieve what already exists.”

“It’s the Army bureaucracy that’s standing in the way,” Mr. Kasper said. “It’s unfortunate that it might take a court to give soldiers what they want and what they’re asking for and compel changes to the Army’s entire software acquisition system. The Army is working overtime to re-create Palantir at the expense of the soldiers and the taxpayer. They haven’t done it yet, despite billions spent and years wasted, and they won’t be able to.”

The House and Senate versions of the 2017 defense budget/policy bill direct the Army to stop developing software that exists commercially.

“This section would require the secretary of the Army to discontinue development efforts for any component of the Distributed Common Ground System (DCGS) of the Army after Increment 1 where commercial software exists that is capable of fulfilling at least 80 percent of the system requirements,” the House bill states.

Palantir’s protest letter asserts that the common ground system “fails in combat, it fails in training centers and it fails at home station. For those reasons, commanders are abandoning it in favor of capabilities that work.”

The Army and the Justice Department, which is representing the service, declined to comment.

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