Palantir is battling the Pentagon's Defense Intelligence Agency for the ability to bid for a contract to modernize its data analytics system, according to a filing obtained by Axios.

Why it matters: Palantir's already massive foothold at the Pentagon could eventually expand to an agency tasked with providing foreign military intelligence to prevent and win wars.

What's inside: Palantir argues in its protest that the DIA is wasting taxpayer money, and flouting the law, by refusing to consider a commercial solution for its data analytics modernization efforts.

The agency launched MARS (Machine-assisted Analytic Rapid-repository System) eight years ago and has been developing it ever since to replace a Cold War-era system.

Palantir claims the DIA is pouring money into trying to build the system from scratch, with unreliable results, rather than opting for a commercial solution.

Palantir declined to comment.…