White House Sets New Guidelines for Responsible Federal AI Procurement

The Office of Management and Budget (OMB) has released updated guidance to help federal agencies effectively manage risk and performance when acquiring artificial intelligence (AI) products from commercial providers. The new memorandum, titled "Advancing the Responsible Acquisition of Artificial Intelligence in Government" (M-24-18), builds on previous guidance issued in March, which set broad requirements for the use of AI in federal agencies.

Key Differences Between March and October Guidance

While the earlier memorandum (M-24-10) focused on setting binding rules for AI use across government entities, like mandating that each federal agency appoint a Chief AI Officer responsible for overseeing the implementation of AI technologies and ensuring policy compliance. Additionally, agencies must maintain detailed, publicly accessible inventories of their AI systems, with special attention to use cases that could affect safety or civil rights.

This new guidance addresses the unique challenges agencies face when acquiring AI technology. According to an Oct. 4 fact sheet, "Agency acquisition of AI is similar in many respects to the purchase of other types of information technology, but it also presents novel challenges."

Strategic Goals for AI Procurement

To address these challenges, the guidance sets out three key strategic goals for federal agencies:

• Managing AI Risk and Performance: The guidance outlines best practices for evaluating the risk and performance of AI technologies, particularly in use cases that could impact civil rights, safety, or security. Agencies are urged to carefully assess AI tools and ensure they align with federal standards and objectives.

• Promoting a Competitive AI Market: To avoid vendor lock-in and ensure healthy competition, the guidance provides recommendations for fostering a diverse AI marketplace, ensuring multiple vendors can participate without monopolizing contracts.

• Ensuring Cross-Government Collaboration: Federal agencies are encouraged to collaborate with each other to share insights, best practices, and strategies for responsible AI acquisition. This collaboration is critical for ensuring consistent AI standards and avoiding duplication of efforts.

Best Practices for AI Risk and Vendor Performance

The guidance also includes detailed requirements for managing AI risks and optimizing vendor performance. Agencies are urged to take precautions when acquiring AI tools that could impact rights or safety and follow best practices to ensure robust contractor performance.

Support for Agencies and Vendors

The Biden-Harris Administration’s comprehensive strategy for responsible innovation is the foundation of this guidance. The fact sheet emphasizes that the memo is designed to help federal agencies and vendors "grow together as the AI market continues to evolve," enabling responsible optimization of services for the American people.

Looking Ahead: What This Means for Federal AI Procurement

This updated guidance represents a proactive step toward ensuring that federal agencies acquire AI technology responsibly and transparently. By emphasizing risk management, promoting competition, and fostering collaboration, the OMB is setting the stage for a more structured and efficient approach to AI adoption in government.

For businesses that provide AI solutions, this memo underscores the need for compliance with strict federal standards and offers a potential pathway for more vendors to enter the federal AI market. As the demand for AI technology in government grows, vendors and agencies alike must work together to ensure innovation doesn't come at the expense of transparency, safety, or competition. Moving forward, we can expect increased federal oversight and a growing emphasis on ethical AI practices in public sector procurement.