In March 2024, the Office of Management and Budget (OMB) issued a memorandum titled "M-24-10 Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence," which establishes comprehensive guidelines for the use of artificial intelligence (AI) across federal agencies. This memorandum not only emphasizes the potential and challenges of AI in government operations, but it also lays out a systematic roadmap for its responsible integration, providing a unique opportunity for federal contractors to realign their strategic approaches to match the new criteria.

The memorandum emphasizes the administration's commitment to harnessing AI's revolutionary capacity while protecting civil liberties, privacy, and public confidence. The directive calls for the recruitment of Chief AI Officers (CAIOs) in each agency to manage AI governance. These officers are responsible for ensuring that AI innovations and risks are managed consistently within existing agency structures and procedures. They are also in charge of creating AI use case inventory and reporting systems, which are critical components for ensuring transparency and accountability in AI implementations.

This memorandum serves as a call to action for federal contractors, particularly those that provide AI technology and services, to improve their offerings in accordance with the federal government's emphasis on security, ethical AI use, and strong governance. Contractors must first properly comprehend the new AI rules, including the CAIOs' unique roles and the AI governance frameworks outlined in the memorandum. This core understanding will allow them to design their technologies and services to suit these nuanced needs, establishing themselves as compliant and appealing partners to government agencies.

To coincide with the memorandum's emphasis on supporting AI innovation while mitigating associated risks, contractors should improve their AI skills. This entails investing in secure AI development processes that protect data privacy and provide comprehensive testing and monitoring mechanisms. Demonstrating competency in these areas will be critical, as agencies are now expected to extensively record AI impacts and performance. Including evidence of such capabilities in proposals and communications will most likely provide contractors a competitive advantage.

Furthermore, implementing and supporting ethical AI techniques is more critical than ever. The federal rules emphasize the importance of transparency, justice, and accountability in artificial intelligence systems. Contractors should create thorough documentation that supports the ethical deployment of AI, such as impact assessments and detailed performance reports, as these are required for government AI projects under the new governance frameworks. Contractors who advocate AI ethics can not only meet federal demands but also stand out in a market that increasingly rewards responsible innovation.

Another notable feature of the agreement is its emphasis on public participation and openness in AI deployments. Federal contractors should actively participate in the public discussions and feedback opportunities offered by federal agencies. Contractors that participate in these forums can gain insights into legislative changes and evolving objectives, as well as demonstrate their commitment to collaborative and transparent AI development.

Federal contractors can also broaden their capabilities by providing training programs and support services targeted to the demands of federal agencies. As agencies are expected to undertake continual risk management and monitoring of AI systems, contractors who can supply these services will be critical in assisting agencies to achieve demanding new risk management procedures. Furthermore, given the emphasis on ethical issues and performance monitoring in the new AI governance frameworks, training for AI system operators in these areas is anticipated to be in high demand.

Collaboration should also be an important approach for federal contractors. Contractors can better address federal agencies' holistic AI innovation and governance demands by developing partnerships with tech businesses, academic institutions, and other stakeholders.

Fed Contract Pros, with its mission-driven focus on navigating the complexities of federal government contracting, is well-positioned to help federal contractors adapt to and excel under the new guidelines established by the "M-24-10 Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence" memorandum. Here is how Fed Contract Pros can provide important assistance:

Given the memorandum's emphasis on AI governance and risk management, Fed Contract Pros can provide unique training modules focused on these topics. These training sessions can help government contractors comprehend the roles of Chief AI Officers (CAIOs), AI governance structures, and specialized AI risk management procedures. Fed Contract Pros ensures that their clients are not only compliant with federal rules, but can also demonstrate their experience in AI governance to new government clients. Contact us today.

As federal agencies are encouraged to collaborate with a diverse variety of stakeholders in the development and deployment of AI systems, Fed Contract Pros can serve as a facilitator for these relationships. Fed Contract Pros can assist contractors in developing collaborations with technology companies, academic institutions, and other relevant stakeholders. These collaborations can help contractors improve their expertise and provide more complete AI solutions to government clients. Consider our 1-on-1 coaching services.

Fed Contract Pros, with its extensive knowledge of federal contracting laws, can assist contractors in developing appealing bids and grant applications that highlight their compliance with government AI governance and risk management guidelines. This assistance can be crucial as agencies assess potential vendors based not just on their technical capabilities, but also on their compliance with governance and ethical norms. Read our proposal writing article and take our proposal mastery course.

To summarize, the OMB's new directive on AI governance in federal agencies poses both obstacles and opportunity for government contractors. Contractors can position themselves favorably in the marketplace by understanding and aligning with new needs, improving AI skills, implementing ethical standards, connecting with the public, and encouraging collaborations. As federal agencies continue to integrate AI into their operations, being at the forefront of safe AI practices will characterize the federal contracting leaders of the future.