Artificial Intelligence in Government Contracting

Discover how Artificial Intelligence is transforming the world of Government Contracting with PCI!

This page explores the intersection of AI and federal procurement, from FAR/DFARS compliance to ethical implementation and real-world applications. If you’re seeking ethical use cases or simply want a deeper understanding of AI in your field, start here. Dive into the fundamentals with our training sessions, blogs, and FAQs.

AI in GovCon Trainings

Free Upcoming Training: GovCon 101: AI in GovCon

Join us for the first Artificial Intelligence in Government Contracting training in our GovCon 101 Series! In this discussion, Tyler Evans of Steptoe will cover the rapidly evolving issues relating to AI in public procurement and how we should best handle these changes.

Key topics will include:

  • New AI procurement standards,
  • Data Ownership and Use, and
  • Expectations for future regulation.

Instructor: Tyler Evans, Steptoe

Click here to access our full GovCon 101 (2025) series!

Join us September 8th from 1:00-2:15pm ET!

Free Upcoming Training: Contractors Be Aware: False Claims Act Expansions, DoD AI Hustle, Budgeting and a Big Beautiful Bill

As we all know, each recent administration has brought about significant changes in policy through the issuance of Executive Orders, and this year is certainly no exception. Many in the GovCon community are finding it challenging to keep up with these rapid changes.

In light of this, we are excited to announce a new bi-weekly series titled “EOs and Policy Changes – GovCon in the New Administration: Insights and Considerations.” This series is designed to help you stay on top of the latest policy statements and Executive Orders that have far-reaching impacts on contractors and grant recipients.

Join us June 16th, 2:00-2:30pm ET!

Free Training: Generative AI: You Know Better Than to Trust a Strange Robot! (May 2025)

Generative AI is an amazing tool.  It can write poems, summarize and translate articles, create art, and much more.  Generative AI has the potential to change the way you practice law, and to make you much more productive.  Is it time to get on the AI bandwagon?

In this course, we will discuss:

  1. What is generative AI?
  2. What is generative AI good for?
  3. What are some of generative AI’s weaknesses?
  4. What are some of the legal issues your clients might encounter in their use of generative AI?
  5. How can you leverage generative AI in your practice?

Instructor: James Goepel, Fathom Cyber & CMMC Institute

 

Cracking the Code: AI, Keywords, and Federal Registrations Incorporating the DOGE Factor

In a recent study performed by TargetGov, over 90% of companies registered in SAM.gov to do business in the federal marketplace do not know how to effectively market to federal decision-makers before the RFP is released. The Trump Administration’s recent focus on efficiency and downsizing of the federal workforce will dramatically reshape the landscape of government contracting. As thousands of federal employees depart their current positions, including key acquisition professionals, artificial intelligence (A.I.) is poised to fill critical gaps in the procurement process. This sea change presents both challenges and opportunities for contractors looking to enter and grow their revenues in the federal marketplace.

Now is a critical time for companies to update their approach, process and tools to market to federal decision-makers. If you are using similar tactics to those used in the commercial marketplace, you will fail as a federal contractor. Decision-makers are using artificial intelligence and data scraping tools to find the contractors who can provide the products and services they need to achieve their agencies’ core missions. We want to make sure you make it on that short list, and it starts with answering a few questions:

  1. Have you reviewed your companies’ federal registrations for A.I. readiness and DOGE compliance?
  2. Do you understand what A.I. readiness is and how to be found by the A.I. tools the government is already using right now?
  3. When is the last time you updated your capability statement?
  4. Do you have multiple versions of effective capability statements for every target agency, prime contractor and teaming partner?
  5. Are you successful in scheduling one-on-one capability briefings and building relationships with the right people?
  6. What marketing strategies and tactics are you using to reach federal decision-makers and are they effective.

Join us for this session where we will cover the “blocking and tackling” necessary to be successful in this new iteration of the federal marketplace during the Trump Administration.

Artificial Intelligence Means Real Money: What Government Contractors Need to Know About the AI Revolution

In this brief kickoff, Alex Major and Franklin Turner, co-leaders of McCarter & English’s nationally recognized Government Contracts practice, explain the present state of artificial intelligence in federal contracting.  Whether being used, sold to, or regulated by the government, this is a new frontier wrought with challenges, opportunities, and uncertainty.  Understanding the present state of play is essential for any company contemplating using AI or selling AI or machine learning products to the government

AI in National Security & Defense Procurement

This discussion will cover rapidly evolving issues relating to AI in National Security and Defense procurement.  Key topics will include new AI procurement standards, data ownership and use, and expectations for future regulation.

AI in GovCon FAQ

What is AI/ Generative AI?

Artificial Intelligence (AI) is a broad term describing machine-based systems that perform tasks such as prediction, decision-making, and pattern recognition. It encompasses various technologies, including Machine Learning (ML), Natural Language Processing (NLP), and robotics.

Generative AI, a newer subset, refers specifically to AI systems that create new content—text, images, code, audio, or video—based on learned patterns from large datasets. These are typically powered by Large Language Models (LLMs), such as GPT or Claude.

Deeper Dive:

IBM Research provides a clear overview of Generative AI as deep-learning models that create text, images, and media from training data.

McKinsey Explainers further define Generative AI as algorithms (like ChatGPT) designed to create new multimodal content.

NNLM (National Network of Libraries of Medicine) highlights GenAI’s novelty by generating original media, distinct from search engines.

How does AI and Generative AI affect GovCon?

AI is reshaping how contractors interact with data, build tools, and deliver services. Key impacts include:

  • Data Rights & Compliance: Datasets used to train AI are not considered software, and thus government rights may extend further than expected under FAR/DFARS rules

  • Deliverables and IP Risk: If AI or datasets are developed or updated during contract performance, the government may obtain government purpose rights or unlimited rights even if the code is not delivered directly.

  • AI Safety and Risk Assessments: Federal contractors are expected to evaluate risks tied to “safety-impacting” or “rights-impacting” AI tools, e.g., tools that influence health, infrastructure, civil liberties, or benefit determinations.

Deeper Dive:

Deltek details how AI automates procurement tasks—vendor selection, contract drafting, compliance checks—enhancing efficiency and accuracy.

NCMA underscores improved data accuracy and reduced error through RPA, AI, and ML in contracting.

SpaceNews flags critical data-security hurdles: public AI tools are generally barred in secure government cloud environments 

University of Dayton Law Journal emphasizes AI’s role in risk mitigation and procurement decision-making 

How will AI effect the job market?

AI is already transforming the job market in two major ways:

  1. Entry-level and repetitive work is at risk of automation.
    Tasks like data entry, basic analysis, or simple document processing are often the first to be handled by AI. If it can be templated or predicted, it can probably be automated.

  2. Job roles will evolve, not vanish.
    Rather than replace everyone, AI is shifting the focus of many roles. The most valuable workers will be those who know how to use AI to eliminate busy-work and focus on tasks that require creativity, judgment, and human connection.

So, what is the path forward? Don’t avoid AI…adopt it! Learn the tools, understand their best use cases, and position yourself to do what AI can’t. The future belongs to those who can delegate the grunt work and double down on the irreplaceable.

Deeper Dive:

PwC’s 2025 Global AI Jobs Barometer reveals that AI-skilled workers earned a 56 % wage premium in 2024, AI-exposed roles grew 38 % (2019–2024), and productivity in AI-heavy industries rose >3x.

World Economic Forum reports that technology and AI will create 11 million jobs while displacing 9 million, and that AI will change nearly 40 % of core skills by 2030.

Investopedia suggests AI-led displacement will be task, not role-based, and provides guidance to assess individual risk .

Business Insider & Financial Times discuss role evolution over replacement.

What legislation has been passed?

Some landmark U.S. legislation and executive action includes:

  • OMB M-24-10 Memo (2024)
    Requires agencies to identify AI systems with major safety or rights impact, conduct risk assessments, and incorporate transparency in use

  • Executive Order 14110 (2023)
    Mandates AI safety evaluations, foreign IaaS monitoring, procurement transparency, and AI use disclosures across federal agencies.

  • AI Training for the Acquisition Workforce Act (Public Law 117–207) (2022)
    Requires annual AI training for acquisition personnel across federal agencies (excluding DoD).

Deeper Dive:

NCSL AI Legislation Tracker: 28 states (plus territories) enacted over 75 AI-related statutes during the 2025 legislative session.

House budget bill H.R. 1 would impose a 10‑year federal moratorium on state AI laws passed May 2025.

Congress.gov currently houses numerous AI-related bills (e.g., Healthy Technology Act aiming to allow AI prescription)

Does PCI offer free AI in GovCon Training?

Yes we do!, We have a free session of our esteemed GovCon 101 series on September 8th.
Click here to register!

What Generative AI tools should I become familiar with?
Tool Use Case
ChatGPT / Claude Legal drafts, summaries, research
Copilot / GitHub Copilot Contract automation, code review
Google Notebook LM Contained Research, you upload your materials, and that becomes the knowledge base. Notebook will not pull extra information from the internet.
Anthropic Claude Highly ethical LLM for legal drafting
Red Teaming Tools AI vulnerability testing (per EO 14110)

There are many more tools for AI Agent integration, but the above chart covers the basics.
Whenever you utilize AI, especially in your GovCon work, it’s key to understand the platforms you are using to ensure that you are protecting your sensitive data. 

Should I just let AI do my job then?

Short answer: No!

Longer answer: Generative AI is a powerful tool, but do not view it as a replacement.

  • Accuracy Concerns: Due to the nature of how LLMs work and the intricacies of litigation,  LLMs can “hallucinate” facts or legal references.

  • Compliance Risks: Using public AI tools with CUI (Controlled Unclassified Information) or PII can violate your contract or expose your company to penalties.

  • Ethics and IP Law: You (not the AI) are accountable for plagiarism, false claims, and bad advice.

  • Reputation: AI doesn’t go to court, answer subpoenas, or deal with clients, you do.

The list of cases involving use of AI in law is growing as this powerful tool becomes more widely available and understood. Ensure that you are using AI to draft general templates, brainstorming and summarizing specific regulations that you have already reviewed. 

Always review, verify, and take final responsibility for how you deploy your tools.
Remember to trust, but verify.

Sources, Resources, and AI News

Below you will find the sources used in this FAQ. You will also find some recent news regarding AI in GovCon.

Congress:

Tracking Legislation:

Tracking Litigation:

AI in the Workforce:

PCI Training Materials:

Definitions:

Relative News:

AI in GovCon Readiness Toolkit

🧰1. Self-Assessment Checklist

    • Does your organization use or plan to use AI for contracting tasks?

    • Have you reviewed the AI clauses in your federal contracts (e.g., data rights, source code delivery)?

    • Are your employees trained in AI ethics, hallucination risks, and appropriate use?

📚 2. Quick Resource Links

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