AI in GovCon: 10 Business Development Use Cases and Common Pitfalls

• AI is becoming a core business development tool in GovCon, with up to 90 percent of contractors implementing or planning to implement the technology in 2026
• AI is helping firms improve market research, opportunity identification, proposal development, pricing, compliance, decision-making and performance analysis
• Industry experts caution that contractors must avoid overreliance on AI, ensure the accuracy of underlying data, and address cybersecurity and data privacy risks

The government contracting business is highly lucrative. In fiscal year 2025 alone, federal contract obligations reached approximately $793 billion, a $17.8 billion increase from FY24, according to the Government Accountability Office.

However, GovCon is also highly competitive and, to win contracts, firms must move fast and with great precision. To gain an edge, many contractors are increasingly relying on AI to improve their business development processes and increase their chances of securing a contract. 

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How Is AI Transforming Business Development for Government Contractors?

Deltek’s latest Clarity Government Contracting Report found that 90 percent of the over 900 GovCon firms polled have implemented or are planning to use AI in at least one business function in 2026. AI has become an integral part of GovCon, and companies that refuse to adopt the technology risk falling behind competitors. 

These are the top 10 AI use cases that, according to industry experts and analyses, illustrate how the technology is enhancing every stage of the GovCon business development and contract lifecycle.

Market Research

Market research is pivotal in shaping a company’s contract pursuit strategy. 

AI is especially helpful in market research because it can ingest large amounts of data and generate actionable insights that contract teams can use to refine the organization’s bid approach. 

According to Matt Simonson, senior product marketing manager for Unanet‘s GrowthStudio, AI can analyze an agency’s history of spending or contract awards to identify trends and flag when a potential acquisition initiative may emerge. The technology will enable organizations to prepare before a contracting opportunity is officially announced.

Lead Generation

Manually scanning government acquisition websites for requests for proposals and calls for solutions is not just time-consuming and energy-intensive; it can also be ineffective. Companies that manually hunt for solicitations may miss contract opportunities or crucial deadlines. 

AI can remove blind spots. Human analysts would take weeks to sift through SAM.gov, USAspending.gov and other procurement websites. AI can comb through the digital landscape to quickly find contract opportunities that align with the business’ strategic priorities, Miriam Briskin, manager for GovCon small business at Unanet, shared with The Business Journal in April.   

Competitor Assessment

In GovCon, small- and medium-sized businesses may have to compete with large corporations to secure major contracts. 

AI levels the playing field. Instead of having teams to track and analyze competitor activities manually, AI tools automate the process. The technology can reveal shifts in competitor movement or market share, enabling companies to make adjustments and refine their strategy, Simonson said in a blog post published in October. 

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RFP Analysis

AI can help firms, especially new market entrants, analyze hundreds of documents, understand complex government solicitation language, and quickly identify and summarize agency requirements into an easy-to-read format. 

Nick Schiffler, marketing manager at Deltek, shared in January that proposal AIs transform solicitation documents into a more manageable format. 

“These tools are built to understand the structure, language and compliance requirements of federal RFPs, helping teams respond faster and more accurately,” he added.

Proposal Preparation and Optimization

Many GovCon organizations are utilizing the technology to draft and improve proposals.

AI enables organizations to generate proposals significantly faster, reducing development time from what would traditionally require extensive effort from human writers and managers. A 2025 Deltek study found that contractors spend upwards of seven hours to develop a first draft of their proposals. AI speeds up the process, allowing teams to focus on improving and delivering high-quality proposals that win government contracts. 

Additionally, AI can help eliminate generic or vague language that fails to adequately describe how the company’s offering can meet agency requirements.

Pricing Recommendation

PwC said AI will change the way companies determine pricing. The technology will allow companies to optimize their pricing strategy by analyzing internal and external data to determine costs that maximize profits and continue to extract the best value for customers.

For GovCon, AI can analyze contract pricing history, according to GovCon Giants. That means companies vying for a government contract no longer have to rely on guesswork to offer a competitive bid. 

Compliance Assurance

GovCon is a highly regulated market, and firms working with the government must comply with often complex security requirements. AI can check whether organizational processes comply with contract rules in real time and identify potential violations before they escalate.

Procurement Sciences said natural language processing tools can assess if a proposal follows formats, instructions and evaluation criteria outlined in the solicitation, reducing its chances of non-responsive submissions.

Moreover, AI-powered tools can also continuously monitor systems and activities for compliance issues and make predictive analysis, allowing contractors to take preemptive measures to reduce risks. 

Contract Management

As firms grow and pursue more contract opportunities, keeping track of every pipeline manually can become overwhelming. It also limits visibility, which may cause teams to miss deadlines, expiration dates or renewals. 

AI helps keep records accurate, automates compliance documentation, tracks obligations and deliverables, and more. TechnoMile also said that AI-powered contact lifecycle management platforms provide a centralized view of all contract data for easier monitoring.

Bid/No-Bid Decision Support

With AI, firms no longer have to rely on just institutional knowledge or gut feel to identify which contract opportunities to pursue. 

AI can score or rank a contract opportunity based on a firm’s capabilities or priorities and provide an explanation behind the recommendation, Briskin explained in her article on The Business Journal. 

“This yields faster, better-informed go/no-go decisions, where firms dedicate resources to pursuits that make the most sense for the business in terms of winnability, resource availability, profitability, geography, etc., which in turn creates a pipeline full of the kinds of projects a company values most,” she added.

Learning From Success & Failure

The work does not end when proposals are submitted and contracts have been awarded. Whether a firm wins a contract or loses to a competitor, understanding the factors behind the outcome is key to improving future performance. 

AI can aid the process by analyzing feedback, pricing, evaluation criteria and other data, Unanet says, allowing companies to prepare early to capture the next contract opportunity and achieve better outcomes. 

What Are Common AI Pitfalls GovCons Must Watch Out For?

AI offers opportunities for organizations to increase efficiency, save costs and achieve growth, but the technology comes with challenges.  

Relying Too Much on AI

Human experience and expertise trump AI when it comes to capturing contract opportunities.

Jeff Shen, executive chair of Red Team Consulting, said in a blog post in August that AI can help build a capture strategy, but he emphasized that it cannot interpret personal relationships or execute capture tasks. 

“I found it helpful in suggesting capture strategies based on past data but knowing whether those strategies resonate with an agency’s specific pain points still requires hands-on human insight,” he stated. 

Using Incomplete Data

Kevin Plexico, senior vice president for information solutions at Deltek and a seven-time Wash100 winner, explained in a May blog post that publicly available data AI tools that scrape to deliver contracting insights are incomplete. 

AI can only process data that it can find. When contracts are canceled without notice or programs quietly disappear from public records, data quality is compromised. AI-generated insights based on stale, incomplete or inaccurate information lead to false leads, causing firms to waste resources on contracts that they will never win.

Not Addressing Data Privacy & Cybersecurity Concerns

Systems that handle sensitive government data are prime targets for cybercriminals and state-sponsored hacking groups. In Deltek’s Clarity Government Contracting Report, about 37 percent of IT professionals surveyed identified data privacy and security risks as their primary concern. 

GovCons that handle controlled unclassified information or intellectual property must ensure that the AI tools they use adhere to federal security standards, such as the National Institute of Standards and Technology Special Publication 800-171.

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Should GovCons Disclose AI Use in Proposals?

There is currently no government-wide mandate requiring firms to disclose the use of AI in proposal development. However, some agencies have asked proposers to detail AI use in submissions. Some agencies have imposed restrictions on AI-generated content. 

The National Science Foundation, for instance, instructs proposers to indicate if and to what extent AI was used in proposal development in a notice posted in 2023.

The National Institutes of Health said in a policy issued in July 2025 that it will not consider research applications substantially developed using AI. The agency also limited new, renewal, resubmission or revision applications to six per individual program director or principal investigator, noting that large numbers of AI-generated research applications have put a strain on NIH’s review processes.

How Is the Government Using AI to Evaluate Proposals?

As agencies expand their use of AI in line with White House mandates, the technology is increasingly being applied to the procurement process. According to Lohfeld Consulting Group‘s Brenda Crist and Beth Wingate, AI systems may be the first to review a proposal before it reaches human evaluators.

Examples include the Army’s Determination of Responsibility Assistant, or DORA, which assesses proposal eligibility and compliance with solicitation requirements, and the General Services Administration’s Contract Acquisition Lifecycle Intelligence, or CALI, which reviews submissions for compliance and validates forms.

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