TL;DR
Recent Government Accountability Office (GAO) decisions have rejected bid protests that relied on AI-generated content containing fabricated legal citations and misattributed case law.
The message is clear: accuracy is non-negotiable in government contracting, and AI tools without proper human oversight create serious compliance risks. Contractors must implement AI responsibly with humans firmly in the loop or face proposal rejections and damaged reputations.
The GAO recently denied bid protests because attorneys used AI tools to generate legal briefs citing non-existent court decisions. One protester admitted to using AI-assisted tools without “engaging in any review of the material for accuracy”. The GAO stated such practices “undermine the integrity and effectiveness” of their process.
This isn’t just about lawyers. When AI can fabricate legal precedents, your perfectly formatted proposal could be non-compliant and immediately disqualified. Here are five critical questions every government contractor should ask about AI implementation.
What Makes “Set-and-Forget” AI So Dangerous in Government Contracting?
In the GAO’s Raven case, the protester let AI generate legal content without verification, resulting in citations to cases that don’t exist. This is the core issue for government contractors. Many are buying AI tools that promise speed, but in this world, accuracy is non-negotiable.
The risks of unverified AI:
- A “hallucinated” fact or misstated capability gets your entire bid thrown out
- Missed security clearance levels or data privacy protocols lead to disqualification
- AI-generated errors become compliance findings with no second chances
Your capture managers, proposal managers, and subject matter experts aren’t saving time. They’re spending more time validating and correcting the “fast” AI-generated draft than if they had started from a human-vetted template. This destroys repeatability.
Instead of a predictable process, you’ve introduced an unpredictable “black box” producing inconsistent quality.
Why Is Accuracy Non-Negotiable When AI Assists with RFP Analysis?
The foundation of every winning proposal is thorough RFP shredding – meticulously breaking down every requirement, every “shall” statement, every compliance criterion. When AI enters this process, the likelihood of errors increases.
Why one error kills your proposal:
- A single missed requirement cascades through your entire proposal development
- Overlooked security clearances or technical specifications create fatal compliance gaps
- Government agencies don’t give partial credit – compliance is binary
- No second chance exists to fix AI-generated errors after submission
If an AI tool overlooks a security clearance requirement or misinterprets a technical specification, you’ve built your proposal on a flawed foundation. You either meet every single requirement, or you’re out.
How Does Black Box AI Create Traceability Problems in Proposals?
The GAO noted they were “unable to locate a decision that matched the citation provided”. This reveals a fundamental problem with “black box” AI tools – you get an output but no clear, verifiable path back to its source.
The traceability crisis:
- No way to verify which RFP sections informed AI recommendations
- Proposals built on unverified assumptions, not substantiated facts
- Impossible to audit AI reasoning or defend claims during debriefs
- Uncontrolled AI increases hallucination risks exponentially
When an AI tool suggests a “winning” strategy, you need absolute transparency. Which market intelligence? Which past performance examples? Without clear links to source content, you’re gambling with your proposal.
The solution: AI grounded in evidence, creating a visible thread between results and the proof behind them. When you control the source content, your company’s past performance database, vetted proposal library, qualified market research, the AI operates within guardrails. This ensures every output can be traced back to trustworthy sources.
What Role Should Humans Play in AI-Powered Proposal Development?
The GAO instructed parties to “take particular care when preparing submissions to ensure the accuracy of information presented”. This underscores one non-negotiable truth: humans must remain in the loop.
Why human oversight is irreplaceable:
- Proposal managers understand ambiguous language AI misses
- Technical experts apply strategic insights no algorithm can replicate
- Legal counsel ensures compliance beyond pattern matching
- Experienced professionals transform AI-accelerated work into winning proposals
AI should serve as a powerful assistant, not an autonomous decision-maker. While AI can rapidly analyze RFPs and generate initial drafts, the nuanced aspects still require human expertise. Understanding an agency’s mission, positioning your company strategically, and crafting compelling narratives demands human intellect and judgment.
How Can Government Contractors Implement AI Responsibly?
The GAO isn’t telling contractors to abandon AI. They’re demanding responsible implementation – AI with accountability, transparency, and human judgment built into every step.
Three pillars of responsible AI:
- Data Quality – Ground AI in curated collections of high-quality content. When you control the source material, you dramatically reduce hallucination risks.
- Traceability – Every AI-generated recommendation should link back to verifiable sources. This isn’t just about compliance – it’s about building proposals you can defend during debriefs.
- Human Review – Color team reviews haven’t died with AI, they’re more important than ever. Your red team should scrutinize AI-generated content with greater rigor than human-drafted sections.
Implementation checkpoint framework:
| AI Stage | Human Checkpoint | Verification Method |
| RFP Analysis | Capture Manager | Cross-check “shall” statements |
| Content Generation | SME Validation | Verify technical accuracy |
| Compliance Matrix | Proposal Manager | Trace requirements to RFP |
| Final Review | Executive Team | Assess strategic positioning |
The Path Forward
The GAO has issued a clear wake-up call. AI offers tremendous potential to transform proposal development, but this transformation must be built on a foundation of accuracy, traceability, and human expertise.
The winning approach:
- Deploy transparent AI systems grounded in quality data
- Maintain rigorous human oversight at every critical stage
- Treat AI as a tool that amplifies human expertise, not replaces it
- Insist on traceability from every AI recommendation back to source content
The contractors who win won’t be those who deploy AI the fastest – they’ll be the ones who implement it most responsibly. Government contracting has always demanded precision and accountability. AI hasn’t changed these requirements. It has simply raised the stakes for getting implementation right.
Want to explore the full conversation? Check out Fergal McGovern’s complete article: Beyond the “Magic Button” – AI’s Call for Accuracy and Accountability.
