GenAI Moves to Production: What Federal Contractors Must Do Now
Generative artificial intelligence (GenAI) has transitioned from a futuristic concept to a significant force in the federal market, fundamentally changing how agencies and their industry partners fulfill their missions. A recent survey by Ernst & Young revealed that 64% of federal respondents reported using AI daily, a number likely to have increased further.
As federal agencies pursue modernization, GenAI presents real opportunities to streamline operations, automate routine work, and extract actionable insights from vast datasets. However, the adoption of such transformative technology carries inherent risks, necessitating a strategic approach from government contractors.
Why GenAI Matters Now for GovCon
Federal agencies are moving from pilot programs to full-scale production with GenAI. For instance, the Department of Veterans Affairs has progressed beyond initial trials, now implementing a secure, on-network GenAI chat interface for employees. This tool, akin to commercial platforms like ChatGPT, is designed to meet the data and privacy requirements specific to the VA and is currently utilized by over 40,000 employees.
The VA is integrating generative AI into healthcare delivery by:
- Utilizing the world’s largest linked genomic-healthcare database to enhance diagnostics and personalize treatment.
- Implementing AI-powered programs to reduce appointment wait times, improve suicide prevention, and streamline document processing in clinical encounters.
- Training medical professionals in AI-driven methodologies through initiatives led by the National Artificial Intelligence Institute.
The General Services Administration has also developed an in-house generative AI tool, known as GSAi, aimed at supporting staff productivity while adhering to strict government security and privacy standards. This tool includes a chatbot, an API, and an administration console for managing various AI models, currently reserved for internal use as GSA collects staff feedback for refinement.
The shift toward GenAI signals a wave of new business opportunities for government contractors. As federal agencies expand their AI capabilities, they will require external partners to design, build, and integrate secure AI solutions tailored to government specifications. Contractors can anticipate a demand for:
- Developing custom GenAI tools.
- Connecting these tools to sensitive data systems.
- Providing ongoing support, compliance consulting, and user training.
Practical Steps for Responsible GenAI Adoption
To adopt GenAI responsibly, contractors should begin with a thorough readiness assessment. Evaluating technical capabilities, data governance practices, and risk posture is essential to ensure teams are prepared to build, deploy, and monitor GenAI systems in compliance with federal requirements. Key areas of focus include:
- Security and compliance: Prioritizing these aspects from the outset is crucial, especially when handling sensitive data.
- Frameworks: Utilizing the Federal Information Security Management Act (FISMA) and the National Institute of Standards and Technology’s AI Risk Management Framework is vital for safe AI deployment.
- Transparency and accountability: Federal clients expect contractors to clarify how GenAI models make decisions, document data sources, and offer recourse for end-users.
Navigating the Ethical and Risk Landscape
Implementing GenAI introduces complex ethical challenges, particularly regarding data privacy, algorithmic bias, and stakeholder engagement. Proactive measures are necessary, such as:
- Using diverse datasets to mitigate bias.
- Implementing strong safeguards for sensitive information.
- Collaborating closely with agency partners to align AI solutions with mission requirements and public trust.
The risks associated with AI adoption, including misinformation and misuse, necessitate robust governance frameworks and ongoing oversight to ensure secure, legal, and transparent operations. Effective governance not only mitigates risk but also fosters innovation, enabling agencies to harness AI’s potential while safeguarding public interests.
Collaboration and Policy Engagement
The complexity of GenAI necessitates public-private collaboration. Initiatives such as the National Artificial Intelligence Initiative Office and the Defense Department’s Joint Artificial Intelligence Center provide avenues for contractors to influence policy and share best practices. Engaging in industry groups, such as the Professional Services Council, can amplify voices in regulatory discussions, ensuring new rules are practical and effective.
What’s Next for Contractors?
The GenAI wave is upon us, and federal agencies are seeking leadership from their industry partners in technology, ethics, compliance, and operational excellence. Contractors that invest in responsible GenAI adoption will be well-positioned to secure new business, enhance client relationships, and help shape the future of federal IT.
GenAI represents a powerful tool, but its value in the federal market will hinge on responsible and transparent deployment. Now is the time for government contractors to lead by example.
