Federal Artificial Intelligence Landscape, 2024

Published: August 04, 2023

FeaturedFederal Market AnalysisArtificial Intelligence/Machine LearningContracting TrendsInnovationPolicy and LegislationResearch and DevelopmentSmall BusinessSpending Trends

Deltek’s Federal Artificial Intelligence Landscape, 2024 report analyzes the legislation, strategies, leadership, research and spending patterns helping shape the federal AI marketplace.

Federal agencies of every type are exploring artificial intelligence (AI) and related technologies as a tool to advance their mission and business operations and improve citizen services. Data proliferation and the drive for evidence-based decision-making, combined with the pressures of maximizing workforce productivity and sustaining global competitiveness, are driving federal AI investments and efforts.

These factors are propelling an increasing number of AI research and development initiatives and pilot implementations, as well as spurring interest in applying these technologies to wider areas, such as acquisitions and procurement operations. At the same time, concerns for the proper, ethical and effective design and use of AI are driving federal policymakers and standards organizations to address these wide-reaching regulatory concerns in parallel with technological evolution. While policy has begun to evolve, civilian agencies have been leveraging Best-in-Class contracts such as Alliant II, SEWP V and GSA MAS for AI work, while the Department of Defense is making use of alternate mechanisms, such as Other Transaction Agreements.

As a result of these diverse forces, the current federal AI landscape is a rapidly changing technological, operational and acquisition environment that presents broad and numerous opportunities for AI-related thought leadership and technical solutions.

Key Findings

  • Evolving AI Policy. Government leaders are under pressure to create regulation governing federal use, development and acquisition of AI technologies. The coming months will see the launch of several mandated policies and legislation on AI innovation and risk management by both the White House and Congress.
  • Trustworthy AI Standards. Though voluntary, NIST’s AI Risk Management Framework is viewed by federal agencies as the golden standard in the development of trustworthy AI systems. The framework is also viewed by IT leaders as sound doctrine in AI regulatory guidance.
  • AI Spending Trends. Federal AI spending – including prime obligations, other transaction agreements and Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program awards – totaled $7.7B from FY 2020 to 2022, with an increase of 36% over the three-year period.
  • Research Drivers. AI spending remains rooted in research and development (R&D). R&D represented 60% of total AI prime obligations from FY 2020-2022.
  • Procurement Support. Agencies are procuring AI capabilities not only for mission needs, but also to support the procurement process itself.
  • Complex Challenges. Data quality, transparency, explainability, ethics, bias, security and effective oversight remain top challenges in federal AI adoption.
  • Modernization as AI Enabler. IT leaders continue to prioritize modernization needs in data, network, cloud, cyber and workforce to pave the way for effective AI/ML implementation.
  • Nimble Acquisition Approaches. Unique contracting mechanisms, such as Other Transaction Agreements, have allowed for increased federal spending on AI, yet have thus far, only served as a minor entrance for small businesses into the market. Some small businesses have found success via SBIR/STTR awards.

    • Critical Insight for Vendors

    Deltek's Federal Artificial Intelligence Landscape, 2024 report takes a strategic look at the spending trends, drivers, and inhibitors shaping federal AI acquisitions.

    The report provides:

  • Analysis of policies and leadership driving the federal AI market landscape.
  • Assessment of historical spending trends in AI adoption.
  • Insight to agency AI use cases and priorities as well as potential contracting opportunities.
  • Recommendations to help contractors evaluate the impact of trends on their businesses.

    • Deltek's Federal Artificial Intelligence Landscape, 2024 report is delivered in PowerPoint® format, including a PowerPoint® Executive Briefing, and an Excel® data workbook.

    FEDERAL ARTIFICIAL INTELLIGENCE LANDSCAPE, 2024

    TABLE OF CONTENTS

    Introduction

  • Report Purpose
  • Scope and Methodology
  • Key Findings

    • AI Acquisition Landscape

  • AI Budget Environment
  • AI Policy and Legislation
  • Technology Environment
  • AI in the Acquisition Process

    Sample Opportunities

    AI Historical Contract Spending

    Agency Analysis: AI Initiatives and Spending

  • Defense and Military Services
  • Civilian Agencies
  • Intelligence Community

    Conclusions and Recommendations

    Appendix

  • Federal AI Market Definitions
  • Contract Obligation Analysis: Keywords