How Government Contractors Can Use AI to Improve Business Outcomes

While we’re just beginning to enter the era of artificial intelligence (AI), the technology has been around for quite some time. In the 1950s, the field of artificial intelligence began to emerge, with mathematician Alan Turing developing the Turing Test, which measures a machine's intelligence.

However, it wasn’t until ChatGPT became generally available in November 2022 that AI truly entered the mainstream. Suddenly, a highly accessible, easy-to-use generative AI tool that could create text in response to human prompts was ubiquitous, and an AI frenzy soon followed.

In response to the rise of AI, President Joe Biden signed an Executive Order in October 2023 establishing "new standards for AI safety and security" designed to ensure organizations develop the technology responsibly while protecting privacy and promoting innovation.

As AI becomes increasingly widespread and advanced — and increasingly incorporated into government business — contractors need to keep pace with the innovative new technology. Failure to stay abreast of AI trends, use cases and best practices could put contractors at a disadvantage as their competitors adapt and prepare for the future.

What is Artificial Intelligence?

Artificial intelligence is a branch of computer science that uses algorithms trained on data sets to create machine learning models that allow computer systems to perform tasks previously only humans could do — like learning, problem-solving, making decisions, recognizing speech or creating content.

By analyzing large volumes of data rapidly, AI tools can identify patterns and make predictions or decisions based on the analysis. They can also respond to human prompts and create images, videos, text and even music.

Traditional AI vs. Generative AI: What’s the Difference?

Traditional artificial intelligence is great for well-defined problems, performing repetitive tasks, and otherwise dealing with structured data. This type of AI relies on pre-programmed rules and algorithms to perform specific tasks. If you’ve ever used Alexa or Siri to help you find something, you’ve interacted with traditional AI.

Generative AI, on the other hand, is designed to work with unstructured data, learning new patterns and generating new content. For example, you can use generative AI tools to identify anomalies in data, assist with the content creation process, or help with new product designs during the prototyping phase. Essentially, generative AI seeks to mimic human creativity; tools like ChatGPT, DALL-E and Microsoft Copilot all fall under this category.

3 Benefits of AI for Government Contractors

To give you a better idea of how government contractors can use AI to improve business outcomes, let’s examine three use cases.

1. Automating repetitive workflows

Government contractors can leverage AI to automate processes, enhance productivity and improve operational efficiency throughout the procurement lifecycle. AI-powered tools can streamline tasks such as data analysis, document management and contract review, reducing manual efforts and time spent on administrative tasks.

AI can also analyze large datasets rapidly to identify trends, forecast demand and optimize resource allocation, enabling contractors to make data-driven decisions and improve strategic planning.

In addition, contractors can use AI-enabled chatbots and virtual assistants to enhance communication and collaboration among team members and other stakeholders, providing real-time support and guidance. As a result, workers can find the information they need when they need it, enabling them to work more effectively.

2. Improving decision-making

Contractors can harness the power of AI to enhance decision-making across all aspects of their operations. By analyzing vast amounts of data from diverse sources, AI can provide valuable insights and predictive analytics to inform strategic choices.

For example, machine learning models can forecast project risks, estimate resource requirements and optimize budget allocation. This, in turn, enables contractors to make more informed decisions and mitigate potential challenges proactively. Additionally, AI-enabled decision support systems can simulate different scenarios, evaluate potential outcomes and recommend optimal courses of action based on predefined objectives and constraints.

By leveraging AI for decision-making, government contractors can improve efficiency and drive better business outcomes across a number of mission-critical areas of operations, including procurement, project management and strategic planning initiatives.

3. Mitigating risks

Government contractors can also use AI to proactively identify, assess and mitigate risks across the organization. Algorithms can analyze historical data and real-time information to identify patterns, trends and anomalies that may indicate potential risks. For example, AI-powered risk detection systems can monitor financial transactions, project timelines, and regulatory compliance to identify issues like fraud, delays or non-compliance.

Beyond this, AI-powered predictive analytics models can forecast future risks based on historical data and market trends, enabling contractors to implement preemptive measures to mitigate potential threats. By integrating AI into risk management processes, government contractors can improve risk detection, enhance decision-making and protect against potential losses — ensuring the success of their engagement while protecting the bottom line.

AI in Government Contracting: Key Considerations

From increasing productivity to reducing risk, there's no shortage of benefits AI can deliver for government contractors. Before introducing AI to your organization, it's important to think about some key factors to ensure successful implementation.

Security and privacy

When deploying AI, government contractors need to prioritize robust security measures to safeguard sensitive data, uphold privacy regulations and maintain compliance. Ensuring encryption, advanced access controls and data anonymization techniques are crucial for protecting information and preventing unauthorized access.

Bias and discrimination

Contractors need to actively address biases inherent in AI algorithms to prevent discriminatory outcomes. Implementing transparent and auditable AI models, conducting bias assessments, and diversifying training data sources are essential for promoting fairness and equity in decision-making processes. Mitigating biases, monitoring outcomes and establishing accountability mechanisms can help protect against discriminatory practices and promote inclusive decision-making.

Cybersecurity risks

To safeguard sensitive data and company IP, contactors should assess and mitigate cybersecurity risks associated with AI deployment, including vulnerabilities to attacks and data breaches. By following cybersecurity best practices and implementing robust authentication protocols, end-to-end encryption and intrusion detection systems, contractors can safeguard AI systems from cyber threats, ensuring the confidentiality of the data they manage.

Workforce requirements

In addition to fortifying networks and infrastructure, contractors also need to make sure that their employees are able to use AI productively and securely. As such, they need to invest in training to ensure that their team can manage and operate AI systems effectively. Investing in workplace development programs, thoroughly documenting processes and promoting cross-team collaboration can help bridge skill gaps, empowering employees to leverage AI systems to their full potential.

Subcontractor oversight

Contractors who work with subcontractors to execute projects need to also ensure those subcontracting organizations are using AI responsibly. To do that, contractors must maintain oversight of their systems to ensure compliance with contractual requirements and regulatory standards. Establishing clear communication channels, conducting regular audits and enforcing accountability measures can help mitigate risks and ensure subcontractors adhere to established guidelines and best practices.

AI Today and In the Future

Government agencies — including the Departments of Defense, Health and Human Services, Homeland Security, Education, and Veterans Affairs — are already using artificial intelligence and machine learning to power their operations. The technology is capable of supporting several key endeavors, including spend analysis, contract management and fraud detection.

At the same time, more and more government contractors are beginning to explore AI to see how they can use it to improve the way they work. For example, some are using AI in federal bidding to help identify opportunities, analyze documents for compliance and develop proposals.

Recognizing the transformative nature of AI is crucial, but it comes with its challenges. For government contractors leveraging AI, it's essential to be mindful of the inherent considerations and concerns associated with the technology. To use AI responsibly, safely, and in compliance with federal legislation, contractors must undertake due diligence as this field evolves.