Palantir Technologies UK Limited has secured a £17.7 million interim contract from the National Energy System Operator (NESO) for software licensing and technical support related to grid connections and skip rate management. The contract, awarded on August 26, 2026, was a direct award with no open tender advertised, raising questions about procurement transparency. This interim agreement is intended to ensure the continuity of essential services while NESO evaluates its long-term capability requirements for optimizing national energy system operations.
This latest contract adds to Palantir's significant presence within the UK government. The company has secured over £900 million in state contracts across at least ten departments, with a large portion awarded directly without open competition. This pattern of direct awards has drawn scrutiny, including a £240.6 million contract with the Ministry of Defence signed in January 2026, which was also a direct award justified under the Procurement Act 2023.
The contract follows a broader pattern of Palantir embedding itself in UK public services. For instance, the company's relationship with the NHS began during the pandemic with emergency contracts totaling £60 million, eventually leading to a £330 million contract for the Federated Data Platform (FDP) in November 2023. This FDP contract, which runs for seven years, has faced criticism from MPs for its subscription-based service model that reportedly leaves no software or intellectual property with the NHS upon termination, effectively creating a "permanent lock-in." MPs from various committees have urged the government to exercise a break clause in the NHS contract in spring 2027 and consider in-house alternatives.
Despite the controversy surrounding its procurement methods and contract terms, Palantir's work with the NHS and other government bodies has been defended by some officials. For example, a junior health minister stated that an independent evaluation found the FDP to be progressing well and projected benefits of £777 million. However, critics point to the lack of transparency in many of these awards and the long-term dependency created by Palantir's subscription service model. This £17.7 million NESO contract further highlights the UK government's reliance on Palantir for critical national infrastructure, often through direct awards.
