Prompt Productivity: Using AI in Government Contract Work

Not long ago, bureaucracy tangled the government contracting process in miles of red tape. But thanks to advancements in Artificial Intelligence (AI), Machine Learning (ML) and Natural Language Processing (NLP) technologies, the process is undergoing a massive revision, greatly enhancing its efficiency. This good news is especially relevant for small and medium-sized businesses aiming to navigate the road to federal procurement success.

AI, a sophisticated branch of computer science, enables systems to perform tasks typically requiring human intelligence. Let’s explore AI’s immense potential to enhance government administrative procedures and the aspects that boost a contractor’s likelihood of securing a proposal win.

How is AI Changing Contracts?

AI is automating several processes that were once time-consuming and error-prone. You'll find that AI-powered tools can now analyze vast amounts of data in seconds, identifying patterns and insights that would take humans days or weeks to uncover.

These intelligent systems are transforming contract management by:

1. Enhancing contract analysis: AI can quickly review and extract key information from thousands of contracts, helping you identify potential risks and opportunities in current RFPs or proposals you’re authoring or examining.
2. Improving contract creation: Using NLP capabilities, AI assists in drafting contract RFPs and proposals by suggesting relevant clauses and terms based on historical data and industry standards.
3. Streamlining negotiations: AI-driven platforms can compare contract versions, highlight discrepancies and suggest compromises—on both the agency and contractor sides—accelerating the negotiation process.
4. Ensuring compliance: AI can support compliance requirements with the ever-evolving laws by continuously monitoring regulatory changes and contract terms.
5. Predicting outcomes: Advanced AI models can forecast potential contract performance issues, allowing you to take proactive—and corrective— measures.

How Does the Federal Government Use AI?

Dozens of government agencies—including the Department of Homeland Security (DHS)— are appointing Chief AI Officers (CAIOs), reflecting an evolving reliance on AI in contracting and government operations.

This trend will likely spread to almost every government agency as a way to significantly streamline repetitive tasks.

Here’s how AI is enhancing the contract process on the government side:

Conducting Data Analysis Before Contract Funding

AI algorithms are powerful tools that can process vast amounts of data in seconds, sifting through years of budgetary figures and analyzing spending patterns. The result? More accurate and efficient budget forecasts, enabling more efficient contract resource allocation.

In the past, agencies determined a contract’s appropriate funding through manual analysis of past data, current budgets and projected spending. This time-intensive process was often full of mistakes, causing significant rework.

Implementing Predictive Modeling

Predictive modeling takes data analysis a step further. AI can now foresee potential contract financial pitfalls, resulting in significant cost savings. The technology can analyze different contract scenarios in real-time, ensuring agencies are prepared for various possibilities. For instance, when an RFP suddenly needs to shift from a time-and-materials to a cost-plus approach, AI can quickly adjust and create insights into alternate yet effective contract funding disbursement.

The Department of Defense (DoD) is leveraging ML, an AI subset, to develop predictive models for scheduling equipment maintenance. This modeling has led to significant deals, such as the $85 million contract with Palantir Technologies. Also, the Army Material Command (AMC) uses this technology to forecast equipment repair and end of life, dramatically reducing downtime due to missing parts or equipment breakdowns.

Processing Vendor Information

Innovations like the Army’s Determination of Responsibility Assistant bot (DORA) have reduced the time contracting specialists spend gathering information from government databases and websites to create reports. What used to take an hour to complete manually now takes just five minutes using AI.

The Internal Revenue Service (IRS) crafted the template for DORA through its own Contractor Responsibility Bot, and the U.S. Department of Health and Human Services has adopted similar AI-powered platforms to aggregate contract vehicles.

Assessing Past Performance

To assess contractors’ past performance, the Department of Homeland Security (DHS) Procurement Innovation Lab (PIL) uses AI to help agency contracting professionals apply contractors' past performance data to their current proposal submissions. This process significantly speeds up source selection, as cross-pollinating these two bodies of information is now not only fast but a significantly accurate predictor of contract success.

Expediting Solicitation Reviews

The GSA's solicitation review tool (SRT) and the IRS's Contract Clause Review Tool reduce the time required for contract solicitation reviews from hours to minutes. These tools ensure that RFPs include essential requirements, such as Rehabilitation Act Section 508 clauses for improved accessibility of electronics and technology products. The tools also identify other missing, outdated or incorrect provisions in RFP documentation. 

Making Contract Modifications Efficient

he IRS DATA Act Bot employs various technologies to swiftly modify contracts and related documents while enhancing data quality. The IRS created it to clean up Federal Procurement Data System data. Since the bot’s inception, the Service has leveraged the platform to add telecommunications security language to 1,466 IRS contracts and review and correct coding in COVID-19-related transactions at less than a quarter of a second per fix.

Accelerating Contract Success

AI analysis of contract data can significantly boost contract management, as illustrated by the HHS Accelerate program. Using blockchain and AI technologies, this program monitors contracts to ensure they unfold according to agreed-upon terms and conditions, generating recommendations to enhance contract creation, improve performance and draft better future agreements.

Crafting Contract RFPs

Collaborations like the one between the Defense Department’s Chief Digital and Artificial Intelligence Office (CDAO) and Trenchant Analytics LLC focus on developing AI-powered contract writing systems to enhance document creation speed and accuracy.

It’s a significant task, as these documents involve complex language and require a deep understanding of the government contracting process. The system employs NLP to automatically generate accurate and consistent wording, structure and formatting.

How is AI used in Government Contract Proposals?

AI’s power throughout the proposal writing, vetting and approval process is multifaceted, aiding contractors in several key areas:

Managing Risk

AI analyzes patterns and trends in past proposal volumes to mitigate errors or compliance issues in your current submissions. This creates a preventive approach to contract management that could save you weeks of time, many resources and the dark cloud of reputational damage.

Consider the case of Company X, a mid-tier government contractor. They implemented an AI-driven analysis of their past proposal volumes to tackle recurring compliance issues related to Section 508 Standards. Within a year of implementing this AI-driven approach, Company X saw a remarkable 90% reduction in Section 508 compliance errors in their new proposal submissions. 

Drafting Contracts

Generative AI can generate contract drafts in literally seconds, based on the input of an RFP and your similar, past proposals For complex technical proposals, generative AI can help explain intricate concepts in clear, concise language, making your narratives more accessible to non-technical evaluators.

Let’s look at a hypothetical example of the efficiency benefits gained: 

GreenTech Enterprises, a cutting-edge sustainable technology firm, grappled with a timing challenge. As they rapidly expanded, they were often required to draft multiple contracts weekly, if not daily. These custom contracts involved specific agency clients and unique specifications and terms. The manual drafting process was becoming a bottleneck, consuming valuable hours that could have addressed product development and strategic planning.

Recognizing the need for transformation, GreenTech turned to AI-driven contract generation. After integrating a state-of-the-art AI contract tool into their system, the firm could input specific requirements, clauses and parameters, which the AI then used to quickly generate a tailored contract draft.

When establishing a teaming relationship with SolarSolutions Inc., GreenTech fed the AI system the desired terms, partnership specifics and previous contract templates. In mere minutes, a comprehensive and error-free draft emerged, capturing the essence of GreenTech's stipulations and the unique needs of the partnership with SolarSolutions Inc. This newfound efficiency drastically reduced the company's negotiation lead time with prospective agency clients, enabled a faster time-to-market and fostered a reputation for GreenTech as an agile industry player.

Monitoring Contract Performance

AI’s role in delivering watchouts during the contract process? Providing real-time feedback to resolve potential issues promptly. Here’s a possible example: In the offices of a leading government contracting firm, a project manager named Alex prepares to submit a crucial deliverable. As he uploads the documents, an integrated AI system instantly reviews them against the contract's terms and conditions.

An alert appears: A minor discrepancy in a report appendix doesn't align with the stipulated format. Thanks to this immediate feedback, Alex can swiftly correct the issue, ensuring that the deliverable meets the exact requirements and preventing costly delays and potential penalties. Such is the power of AI in modern contract performance monitoring—acting as a vigilant sentinel.

Flagging High-Risk Clauses

AI is becoming instrumental in eliminating high-risk clauses in solicitations, helping you create contracts with safe and consistent wording.

Consider Sarah, a seasoned contract specialist at a top-tier government contracting firm. As she reviews a newly received solicitation, her company's AI-driven tool scans the document in parallel. While Sarah's experienced eyes are invaluable, AI flags a seemingly innocuous clause that, upon deeper scrutiny, could expose the firm to significant financial liability. 

This high-risk clause slipped through similar reviews in the past, but the precision and consistency of the AI tool instantly recognized it. Sarah promptly rephrased the clause, ensuring her company's interests remained safeguarded.

Can AI Actually Write Proposals?

AI can assist in many aspects of proposal writing, but it's not yet at the stage where it can completely replace human expertise.

As mentioned, AI excels at tasks such as data analysis, pattern recognition and standardized content generation. It can help you draft certain proposal sections, such as technical specifications or past performance summaries, by pulling relevant information from your company's databases. AI can also assist in ensuring compliance with RFP requirements by automatically checking for necessary elements and formatting.

But crafting a winning proposal often requires a nuanced understanding of your client's needs, creative problem-solving and the ability to convey your company's unique value proposition. Human insight is still crucial in these areas.

That said, AI can significantly enhance the proposal writing process by:

1. Generating initial drafts or outlines based on RFP requirements and your company's past successful proposals.
2. Suggesting relevant content from your company's knowledge base.
3. Ensuring consistency in terminology and style across the proposal.
4. Flagging potential issues or areas that need human review.
5. Checking for compliance gaps against RFP requirements, and suggesting verbiage to close them.

As AI technology advances, its role in proposal writing will likely expand, but it will remain a collaborative tool rather than a replacement for human expertise.

What are AI Tools for Government Proposals?

New AI solutions emerge nearly every month to address various aspects of the proposal process. One notable example is the integration of AI capabilities into existing pricing platforms.

Deltek's ProPricer, a widely used government contract pricing software, has recently incorporated an AI-powered digital assistant called AskDela This innovative feature allows users to ask questions to quickly find answers about ProPricer functionality. Dela guides you through various tasks, from setting up new proposals to navigating complex pricing scenarios.

Another significant development is Deltek's BOE Pro, a cloud-based add-on designed to enhance the user experience of the ProPrice platform. By harnessing the power of ML-based predictive text entry, BOE Pro fortifies the process of crafting proposal Basis of Estimate (BOE) narratives. This is particularly useful when facing sudden shifts in contract scope, a common occurrence in government work.

It’s Still Early Days for AI

While AI has made significant strides in government contract proposals, it's smart to recognize that we're still in the early stages of this technological revolution. AI's current limitations, particularly its tendency to present inaccuracies with high confidence, serve as a cautionary tale for those eager to fully embrace these tools.

There's a growing need for specialized skills in refining prompts for generative AI and carefully training it for use in highly regulated environments such as procurement. This isn't a simple one-sentence solution; it requires expertise to implement effectively.

Too, the importance of fact-checking each piece of substantive information presented during the contract process can’t be overstated. AI, while powerful, is not infallible, and human oversight remains crucial to ensure accuracy and compliance.

But it's precisely AI's trainability and capacity for "learning" from its mistakes that make its rapid improvement likely. The very challenges we face today in implementing AI in government contracting are driving refinements in the technology, as it teaches itself with every new project.