Preparing for the impact of AI in government contracting projects
The impact of artificial intelligence in government contracting projects is transformative as it creates new avenues to be better and stand out.
Following the much-debated Department of Government Efficiency (DOGE) plan to drastically cut government spending, businesses in the government contracting space are on edge. Further bolstering their fears is that AI is already impacting government contracting projects by streamlining decision-making and increasing operational efficiency.
Today, AI is used in various industries like defense, health care, logistics, etc. AI’s benefits extend across business functions from fraud detection, space exploration, decision support systems and project management to data analysis, supply chain management and compliance management. In fact, by 2024, the AI market is projected to have grown by a staggering $184 billion and is expected to grow to more than $800 billion in 2030. Even though AI is seen as a disruptive technology, its impact is about to change how our world works, and rather than thinking of it as a daunting innovation, businesses can benefit from embracing it.
The perceived impact of AI
AI is revolutionizing the job market, especially in the space of GovCon, because it automates repetitive tasks, simplifies complex compliance, streamlines operations and more. GovCon projects are renowned for their regulatory complexity. Many layers of accounting regulations, extensive documentation requirements and rigorous audits pose significant challenges, especially for small and midsize companies. However, the new levels of sophistication reached by AI’s natural language processing and large language model technologies can help employees simplify contracting processes, automate mundane tasks and validate compliance while enhancing decision-making. In a post-DOGE market, where businesses are under pressure to justify expenditures, AI has become not only a tool but also a strategic necessity.
However, rather than considering AI as a replacement for humans, it needs to be seen as an “acceleration tool.” AI can be seen as a tool to automate tasks like data entry, document validation and basic analysis, which allows employees to focus on more complex tasks. Not only that, but AI’s predictive models can also anticipate risks, timelines and resource needs, capabilities that align perfectly with DOGE’s goal of increasing efficiency. A study done by McKinsey and Company says that up to 30% of hours worked could be automated by 2030.
Federal agencies are always looking to stay ahead of the demands of society and have the citizens’ best interests at heart. AI can be a powerful tool for identifying pain points, creating solutions and analyzing feedback quickly while visualizing data to uncover patterns, identify opportunities and generate a humanlike response. However, it cannot relate to those pain points, replace human sentiments and assess whether the prescribed solutions will resonate at scale.
New skills and newer roles
While AI automation is bound to reduce the need for manual roles, it creates new pathways for skill development. According to the World Economic Forum’s “Future of Jobs Report 2020,” by 2025, 85 million jobs will be replaced while 97 million new jobs will be created across 26 countries. Upskilling and reskilling is the way to go if one wants to adapt to this highly competitive GovCon market. This, in particular, is more relevant now as DOGE is cutting costs and the demand grows for a workforce proficient in AI tools and the complex regulatory landscape.
The most important reskilling that workers need to consider is AI ethics and compliance in the industry. Even though AI can be an exciting topic, in an industry where data privacy and security are paramount, GovCon must adopt and implement robust measures to protect data privacy and security. To further maximize the productivity benefit of AI, employees will need to be prepared for upskilling or reskilling and businesses must view this opportunity as an investment and not some kind of expense.
Skill gaps do not allow employees to harness the power of AI fully, and the most important step begins with educating employees on the basics. Making them experts shouldn’t be the top priority, but giving them foundational knowledge and training should be necessary. After that is done, then businesses can adopt personalized upskilling plans supported by AI-enabled service platforms. Despite AI’s opportunities, the concerns regarding job displacement remain. Workers whose jobs are often repetitive have high risks of their jobs being automated and are often fearful of job loss. To give them a sense of job security, businesses need to know that many of these positions will evolve rather than disappear. Integrating workforce transition programs can help employees displaced by AI transition into new roles.
Bottom line
The impact of AI in government contracting projects is transformative. While AI does seem dystopian to many GovCon workers, and while many roles are changing with its integration, we must be open to it as a tool that creates new learning opportunities. With the introduction of DOGE, uncertainty does loom with the shift in priorities. However, this creates new avenues to be better and stand out. Investing in proper upskilling initiatives and demystifying AI mitigates fears of job displacement and unlocks AI’s full potential. The future of AI in GovCon is not about replacing people but empowering them by paving the way for a more efficient and resilient industry.
Raju Karki is CEO of Karki Consulting Group.
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