Winning US Government Contracts: Two Mini-Case Studies
April 28, 2026
Another dinobaby post. No AI unless it is an image. This dinobaby is not Grandma Moses, just Grandpa Arnold.
Just for fun, let’s assume that the information in “US Security Agency Is Using Anthropic’s Mythos Despite Blacklist, Axios Reports.” In February 2026, Anthropic (a big AI tech) outfit did not want its technology to be used to kill people. The US government declared Anthropic a “risk,” and that label acted like stepping on the brakes of an outlaw race car. The cited news story is a second hand report, but it strikes me as close enough for horseshoes.
Thanks, Venice.ai. Good enough. No logos on the buildings. That’s a thoughtful touch.
A high-tech outfit is kicked out of the US government procurement line up. What does that company do? First, the firm publicizes that its has ethics. I know that is a strange concept for a Silicon Valley bait outfit, but bear with me. The government decision made Anthropic more visible. If anecdotal reports can be believed, more people signed up because of the firm’s “ethics” play than dumped the outfit. Then Anthropic emitted information about how its Claude programming tool was doing a bang up job. And the coup de grâce. Anthropic had a marvelous, advanced, essential capability: Its system could find hundreds, thousands, and maybe millions of software vulnerabilities. The other BAIT outfits sat on their hands. As if by magic like that filling the pages of the Lord of the Rings, Anthropic is allegedly back in the US government. Representatives of the firm had a meeting in the big White House. And the Reuters’ story cemented the trustworthiness of the report. Remember. Thomson Reuters is the trust outfit. So you know I can trust the cited story.
Clever chess moves. Done in plain sight. Bingo. Anthropic is not just back; it is back in a security agency.
Now contrast this with this scenario for another Silicon Valley company. This firm is old by high technology’s accelerationist standards. Founded in 2003 (in case your math is rusty that’s about a quarter century ago), Palantir landed some projects with a secretive US government agency. The company did some fancy dancing in order to get access to the i2 Ltd. Analyst Notebook’s proprietary file format. (FYI I did a few small and meaningless jobs for i2 Ltd. before it was acquired by Silverlake and then IBM and now Harris.) The fancy dance moves ended up in court. Money changed hands. The proceedings were sealed. But the footwork is important. Then the company ran into some procurement procedural issues and sent forward deployed engineers to areas where military operations were underway. That was supposed to demonstrate how well Palantir’s system worked, but it produced some friction. And then, from out of the blue several years ago, Palantir ran ads in the Wall Street Journal positioning itself as an AI company or in my lingo a BAIT outfit. Finally, Palantir became a cause célèbre in Washington, DC, and promptly became the go-to company for super advanced, super capable, super smart software.
Which company pulled off its return to the US government with more finesse? Was it Anthropic, a firm that essentially issued news releases? Was it Palantir with its NFL approach to getting a touchdown? I will leave it to you to answer this question.
From my point of view, several observations are warranted:
- Becoming a go-to provider of technology is a key to sustainable revenue. If a vendor plays one’s cards correctly, a US government procurement can extend over a number of years. Don’t forget those scope changes and engineering change orders. We are talking big money that will be sucked from the veins of Booz, Allen- and IBM-type companies. The big losers in this BAIT example are the existing providers of services because they now have to become suppliers to the BAIT outfits. Second fiddle is not traditional providers favorite job in the Federal symphony billing orchestra.
- Both of the BAIT outfits demonstrated that decisions related to specific procedural behaviors are malleable. In fact, some vendors can pretty much do anything and still become the golden child watching dump trucks deliver cash to kid’s playpen.
- The technology does not have to work. The technology simply has to be perceived as the greatest thing since sliced bread. The technology must cement an agency’s commitment to innovation. The outputs definitely will be capable of delivering better, safer, faster, and cheaper government outputs. Metrics? Hey, who is counting. When’s the last time you got your hands on the audited numbers from a Federal agency engaged in making America safe, secure, and law abiding? I have worked on government projects since the 1970s and I have not come across such a document and probably never will because I don’t care as an official dinobaby.
My point is that at this point in time, both Anthropic and Palantir have pulled off a remarkable destabilization of the Beltway Bandits; that is, the consulting firms, the hardware and software providers, and the support professionals who have controlled the Beltway for decades. Now the game has changed, and I think one should tip one’s hat to the clever tactics used by the companies that now appear poised to bill billions upon billions for years to come.
Tasty BAIT indeed.
Stephen E Arnold, April 28, 2026
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