Comment by miki123211

Because it's hard for the government[1] to build computer systems.

Government salaries are pretty low compared to dev salaries. If the government wants to hire devs and pay them as much as private industry does, they'd have to pay them much more than what their superriors (and their superriors' superriors) make, which would destroy workplace morale. They could raise everyone's salaries, but that's deeply unpopular, as a large part of the population view all high-level government functionaries as crooks by definition.

The way you get around that is by using contractors. Contractors let you hide the cost of software development. Instead of paying $150k to a software developer (which is probably more than the director makes), you pay $10m to a company, not unusual when you also hire companies to build you planes and bridges. How that company allocates that 10m and how much they pay their engineers is no longer your concern, and no longer an embarrassment to your hierarchy and salaries.

However, writing contracts for software is hard, for the same reason waterfall is hard. You just don't really know what the requirements are before the project starts, and in a traditional RFP process, you can't accurately model what requirements are the costliest and should perhaps be reconsidered. This means contracted government projects usually turn into an exercise in checkbox-checking and terrible, unusable UIs which technically fulfill the acceptance criteria, and therefore have to be accepted.

Palantir has somehow managed to actually collaborate with the government, sending forward-deployed engineers to figure out what their actual needs are, and then writing software which fulfills exactly those needs, bringing techniques which modern tech companies have learned along the way. I don't actually know how they managed to circumvent the RFP process well enough to do this.

[1] "The government" here can apply to any government you like, not necessarily the US government.