Blog Post: AI FOR GOVCON – Clarity Report 2024
ARTIFICIAL INTELLIGENCE AND GOVCON
Artificial intelligence (AI) and machine learning are actively revolutionizing the government contracting industry, significantly impacting how projects, human resources, and manufacturing sectors are executed and managed. According to the Deltek Clarity Report, a staggering 80% of respondents are actively using AI to optimize at least one of the major industry sectors, whether it’s the facilitation of talent procurement, increased automation in manufacturing, or the speed of which new projects are acquired, developed, and executed. AI tools are also assisting in the design, testing, and manufacturing of new products, facilitating the development process by making things faster and more accurate.
AI is also increasingly recognized as a valuable tool for supporting business development (BD) initiatives in the government contracting industry. Despite ranking lower on the priority list, over half (55%) of Clarity Report BD respondents acknowledge the importance of leveraging automation and AI. When asked about their plans for using AI in business development, respondents cited various applications, with the most prominent being the identification of opportunities with the highest win probability and the development of text for proposals and Requests for Information (RFIs). However, there remains a notable portion of the industry that has yet to embrace AI for business development. Specifically, 21% of respondents indicated no plans to use AI for BD in the coming year. This reluctance is more pronounced among small and mid-size businesses, with 27% and 33%, respectively, opting out of AI investments for BD.
Alan Balutis, President of APB Ltd and managing partner with the CIO Collective, highlights the gradual yet promising adoption of AI within federal agencies. He observes that agencies are beginning to utilize AI for procurement tasks. This includes using AI to extract clauses and provisions from previous RFPs to structure new ones, a practice already underway in several departments and agencies. Balutis also sees potential in expanding AI use to review and screen proposals, down-select candidates, and evaluate past performance more meaningfully. He argues that the government currently falls short in thoroughly assessing past performance when making awards, suggesting that AI could significantly improve this process.
While AI adoption in business development within the government contracting sector is still evolving, its potential applications are diverse and promising. By identifying high-probability opportunities and automating proposal development, AI can enhance the efficiency and effectiveness of BD initiatives. Despite some resistance, especially among smaller firms, the ongoing integration of AI in procurement and performance evaluation indicates a transformative shift in the industry. As AI technology continues to mature, its role in business development is likely to expand, offering new ways to optimize operations and improve outcomes in government contracting.
The Government Contracting industry is finding broad application potential for AI and machine learning, but experts are advising caution against implementing these tools without a clear strategy. It’s essential to understand how AI/machine learning can be implemented effectively to avoid critical pitfalls and maximize benefits. While AI is improving exponentially, and its potential is ever-growing, healthy skepticism is still greatly encouraged, as it is far from being a perfect science.
