Department of Energy AI Act Proposes Potential $12B to Establish R&D Centers

Recently, U.S. Senators Joe Manchin and Lisa Murkowski introduced the bi-partisan Department of Energy AI Act proposing a potential $12B effort to lead the nation’s development and utilization of Artificial Intelligence (AI).

“As AI technology takes the world by storm, the United States needs to meet the moment quickly and effectively before our adversaries do,” said Chairman Manchin. “This bipartisan legislation will leverage the agency’s existing world-class laboratory test facilities, scientific workforce, and advanced computing resources to strengthen our country’s AI capabilities to remain the superpower of the world in energy, national security, and economic competitiveness.”

The legislation requires:

• Developing and deploying the Frontiers in Artificial Intelligence for Science, Security, and Technology (FASST)
• Establishing and operating a minimum of eight multi-disciplinary research and development (R&D) centers funded annually at $2.4B each over five years with renewal options for five additional years
• Establishing an AI Risk Evaluation and Mitigation Program to evaluate and mitigate safety and security risks associated with artificial intelligence systems
• Developing risk taxonomy of AI-related safety and security risks associated with systems relevant to Department missions
• Providing shared AI resources to promote collaboration among the government, academia and industry
• Providing STEM Education and Workforce development including hiring and training a minimum of 500 new researchers.

As the world’s leading generator of scientific data, the Department will select the center locations based on competitive, merit reviews among the 17 National Laboratories. Once established, each center will leverage high-performance computing capabilities, expertise and experience from more than 40,000 scientists, academia and industry to employ existing and emerging technology and applications to ensure AI’s role in meeting Department and national missions. This includes extracting, analyzing and comparing data from past and current projects, developing tools to improve future applications and large language models and conducting automatic assessment reviews. The experience and expertise of current laboratory Management and Operations (M&O) prime contractors will also play pivotal roles in the laboratories’ competitiveness and success with the centers.

While the government has not yet announced the funding source for the centers, R&D programs such as this often comes through Executive Orders, legislative actions or other federally funded programs like the Bipartisan Infrastructure Law and Inflation Reduction Act. Monies for the centers may be allocated through direct appropriations to the selected laboratories or included in outyear budgets. Since the M&O contracts currently provide laboratory IT products and services, contract modifications to include center support are also possible. 

Work may also be contracted through Funding Opportunity Announcements (FOA), Other Transaction Agreements (OTA), Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) programs, Cooperative Research and Development Agreements (CRDA) or Interagency Agreements (IA).

Contractor Outlook

Regardless of the procurement method, related activities will eventually become part of the M&O contracts and subcontracts and/or likely embedded within other programs. As the FASST program evolves, contractors can expect continued opportunities in related fields such as robotics, Robotics as a Service, advanced modeling and simulation, data ingestion, processing and distribution technologies, security compliance, hardware, software and enterprise licenses, security services, and in training and administrative services. 

Additionally, 14 of the 17 M&O contracts below expire within the next five years, barring extensions, award terms or exercised options. AI technology products and services will be a major part of the follow-on contracts. With established histories in managing the laboratories, incumbent contractors have a competitive edge in pursuing these new contracts. But, firms with existing and emerging technologies can position themselves now for a potential teaming spot on those M&O contract teams. Understanding the Department’s long-term strategies, anticipating future requirements and investing in highly trained, experienced staff will strengthen their chances for inclusion on those recompete teams. Additionally, taking advantage of the FOAs, SBIRS/STTR and other grant-related opportunities, mentor-protege programs and collaboration efforts will also position firms for future work.

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