In today’s dynamic business culture, artificial intelligence is the agent for transformation and with it, every tech giant (Google, Meta, Amazon and Microsoft), The White House, the Federal Trade Commission and Congress are getting involved. AI is receiving attention from both the business community for productivity increases and the government for regulatory reasons.

This leaves a newly overlooked aspect of AI’s potential – the ability to impact cross-section positively: the business side of government operations. With one out of every ten dollars of federal government spending going to third-party vendors, the government contractors (GovCon) industry is at the forefront of harnessing AI’s capabilities to gain a competitive edge. AI enhances efficiency, productivity and effectiveness, propelling companies to secure more business.

First adopters

More than 60% of business owners believe AI will increase productivity, and government contractors and consultancy agencies are on the front line of this tech transformation. Even the State Department has spoken out about the need to incorporate generative AI and conduct market research on using emerging technology to write contracts. State’s perspective is that AI would not only reduce costs, manual labor and the chance of errors but also improve decision-making and deliver better contract outcomes.

Aeyon LLC, a business management consultancy with deep expertise in the Defense Department and related civilian agencies, was among the selected awardees to deliver AI services for DoD’s Joint Artificial Intelligence Center (JAIC) to bolster various business operations through 2027. Other integration examples include multi-billion dollar public services company, Serco, which is implementing AI for knowledge management and collaboration purposes. While embracing AI for these purposes, GovCon companies must look to underscore the vital role of transparency to strengthen trust across the board.

AI market confusion: What about transparency and trust?

Amidst market uncertainties and inquiries regarding the impact of AI in diverse sectors, trailblazing early adopters in the GovCon realm have emerged as shining examples of advancement. This is particularly noteworthy given the public sector’s responsibility to manage highly sensitive and confidential information, coupled with the substantial financial resources involved. However, according to KPMG’s 2023 Trust in Artificial Intelligence global study, 61% of respondents are wary about trusting AI. This spans across industries, but adopters in the GovCon space are leading the charge and setting guidelines with these tools while handling sensitive information.

In this industry – no matter the tech solution – ensuring transparency and trust is paramount, because it fosters accountability, reduces safety concerns, enables open communication and maintains regulatory compliance. In a competitive landscape, choosing which AI solutions prioritize transparency and trust can provide security as well as a significant business advantage.

What’s next?

As technology adoption continues to proliferate, there is a growing expectation for businesses to respond swiftly to procurement opportunities – this will make its way into the government contracting space, too. Embracing AI now provides a competitive advantage, as it allows organizations to respond to more bids within the allotted timeframe. As AI becomes more prevalent, the response timeframe may be shortened, requiring federal contractors to adapt and respond within tighter deadlines.

Just as computers revolutionized the way documents are created and processed compared to typewriters, AI will bring about similar advancements in procurement processes. AI will also serve as a democratizing tool, leveling the playing field for businesses of all sizes. By automating routine and repetitive tasks, AI frees up procurement professionals to focus on strategic and value-adding activities. This enables smaller businesses to compete more effectively against larger, established firms.

The emerging trend of consultancies in the government procurement space adopting AI comes at a time when implementing these technologies is a key factor to remain competitive. As early adopters, government contractors are leaning into the increase in speed, accuracy and efficiency that AI technologies offer to now deliver proposals in a more timely manner.

To foster AI adoption, government contractors should start to leverage available resources and references to enhance their understanding and implementation of AI technologies. Proactive steps by government contractors towards AI adoption can drive innovation, improve efficiency, and enhance their competitiveness in the market.

Elizabeth Lukas is CEO of Americas at AutogenAI.

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