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OMB Issues Memorandum Directing Federal Agencies to Adopt AI: Implications for Government Contractors
The Office of Management and Budget (OMB) recently issued a memorandum directing federal agencies to adopt artificial intelligence (AI) and advance its use to inform and carry out agency actions. The new policy addresses three main areas deemed necessary for responsibly deploying AI in agency decision-making: strengthening AI governance, advancing AI innovation, and managing risks from the use of AI.
Under the new policy, agencies are directed to designate a Chief AI Officer responsible for coordinating agency use of AI, developing a workforce with the necessary skillsets for implementing AI, and identifying and prioritizing appropriate uses of AI to advance their agency’s mission and equitable outcomes. The Chief AI Officer is also tasked with ensuring that AI code and data used to develop and test AI are inventoried and shared in data repositories.
OMB views AI as a tool with the potential to improve efficiency across the federal government and increase access to government services, address the climate crisis, protect democracy, improve public health, and grow economic competitiveness. Agencies are directed to remove barriers to the responsible use of AI and develop the IT infrastructure necessary to build, test, and maintain AI applications.
Recognizing the risks associated with AI, OMB prescribed minimum risk management practices that agencies must follow before using AI, including completing an AI impact assessment and obtaining an independent evaluation of the AI to ensure the benefits outweigh the risks.
With agencies encouraged to streamline operations using AI, government contractors can expect to see AI increasingly used in the procurement process. Agencies such as the General Services Administration (GSA) and the Department of Homeland Security (DHS) have already begun implementing AI tools in acquisitions and contract management to improve efficiency and reduce costs.
Contractors may also benefit from using AI to validate compliance with regulatory requirements, determine eligible contracts to bid on, and assist in preparing proposals. The use of AI in government contracting could simplify the process, reduce costs, and encourage more companies, especially small businesses, to bid on contracts, increasing competition and innovation in the marketplace.
