The Met had proposed a £25.3m contract with Palantir UK for 2026-27 to support criminal investigations and reforms aimed at improving the force’s culture and standards.
It included an optional one-year extension worth a further £24.8m.
But MOPAC said it was not satisfied the Met had adequately ensured or demonstrated value for money.
It also cited concerns around the firm’s values and ethics, although legally this cannot influence a deal refusal.
In the report, Sir Mark said the procurement process followed by the Met was “legally and commercially compliant” and that Palantir was “selected from a Crown Commercial Service framework agreement”.
He added that MOPAC had been “well engaged” in the Met’s approach and had provided “detailed scrutiny” which the force had supported them with.
A Palantir spokesperson said its software had already helped several English police forces, “including identifying 1,000 women in Bedfordshire whose partners had a history of domestic violence in a single year”.
They said they had also “helped Scotland Yard tackle serious corruption and criminality within its force” in a pilot that used AI for detection.
“We are proud of that work and stand ready to further support law enforcement in London and across the UK,” they added.
The firm, founded by the US billionaire Peter Thiel, has faced criticism over its work with US Immigration and Customs Enforcement (ICE) and the Israeli military, prompting calls for public bodies to consider the ethics when awarding contracts.
On Monday, the Times reported that Palantir intends to sue the mayor, external over the blocking of its deal with the Met.
