Morrison Foerster’s Government Contracts Insights provides our in-depth analysis of developments and trends impacting government contracting. Through Insights, our attorneys offer a real-time assessment of the statutory, regulatory, legal, and business-related developments and trends that are shaping the industry. We also examine a full array of non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Morrison Foerster’s nationally recognized Government Contracts and Public Procurement practice represents the world’s leading companies in the aerospace and defense, intelligence, cybersecurity, information technology, financial and professional services, education, healthcare, infrastructure, and logistics support sectors. We are enlisted to address our clients’ most complex and important legal issues. Our work includes contract and subcontract negotiation and other transactional matters, business and regulatory compliance counseling, internal investigations, bid protests, and a wide array of enforcement and litigation matters. Our clients range from Fortune 50 companies to small and medium-sized companies just entering the public sector. We advise both U.S. and non-U.S. companies involved in municipal, state, federal, and non-U.S. procurement matters.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Tina is Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmaceutical companies, with a focus on general contract counseling and compliance, particularly concerning intellectual property, and cybersecurity matters and federal grant funding.Tina counsels contractors on compliance with federal, state and local acquisition and ethics regulations and with the evolving myriad of requirements pertaining to data security and cybersecurity. She has been involved with numerous internal investigations and compliance reviews, and with mandatory and voluntary disclosures to agencies, and litigation of False Claims Act matters.Tina routinely advises clients concerning:<ul><li>Prime-subcontractor relationships</li><li>Sources of supply and country of origin requirements</li><li>Price reductions and price reporting issues</li><li>Organizational conflicts of interest</li><li>Safeguarding of intellectual property and other proprietary interests</li><li>Licensing and data rights issues</li><li>Handling of classified materials and controlled unclassified information</li><li>Agency suspension and debarment proceedings</li></ul>She also assists clients with due diligence and other activities related to the acquisition of government contracting concerns, and with the drafting and negotiation of teaming agreements, subcontracts, licensing agreements, and cooperative research and development agreements. She also assists clients applying for federal grants (including SBIR and STTR agreements), and those who seek to obtain other transactional authority agreements, as well as those competing for state and local government work.Tina’s litigation experience includes government contracts claims litigation in federal courts and before boards of contract appeals, bid protests before the Government Accountability Office and the Court of Federal Claims, and complex disputes in federal courts, including civil fraud and False Claims Act litigation and reverse Freedom of Information Act litigation.Prior to joining Morrison Foerster, Tina worked at another large national firm and as a trial attorney in the Office of the General Counsel of the Navy, Navy Litigation Office.<h4>Representative Experience</h4><ul><li>Negotiation of largest CHIPS Act federal funding agreement between multinational semiconductor corporation and U.S. Department of Commerce.</li><li>Negotiated prime contract and major subcontracts related to the Department of Energy’s next generation supercomputer program, including extensive IP rights negotiations and negotiation of associated patent rights waivers.</li><li>Negotiated series of other transaction authority agreements with DARPA and associated subcontracts with more than a dozen research universities on behalf of a firm biotech client, including complex IP rights allocations and material transfer agreements.</li><li>Assist clients with FedRAMP authorization process and with development of license agreements for software products sold to federal, state and local government agencies.</li><li>Cyber incident response counseling to some of the largest companies and organizations impacted by security incidents.</li><li>Advises clients on Bayh-Dole reporting of inventions and IP strategies for contracts and grants.</li><li>Conducts due diligence for major government contract mergers and acquisitions.</li></ul>

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Tina is co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. She counsels a wide variety of government contractors on compliance with federal acquisition and ethics regulations. She drafts and negotiates contracts on their behalf and has been involved with numerous internal investigations and compliance reviews, and with bid protest, contract claims, and False Claims Act litigation. She also advises on M&A transactions involving government contractors.

Tina D. Reynolds

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office.Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters. He has represented both protesters and awardees in scores of protests before the Government Accountability Office, the Court of Federal Claims, and procuring agencies, in acquisitions ranging from small business procurements to multibillion-dollar contracts of global significance. His representative protest matters span the aerospace sector, the Intelligence Community, base operations and logistics, healthcare, nuclear and environmental work, and information technology and software acquisitions. His protests have included both classified and unclassified programs. In addition to prevailing in published decisions, Jim has also secured favorable corrective action on behalf of clients in a wide variety of protests that were resolved without a published decision.Jim’s work also focuses on disputes over cost allowability and compliance with the Cost Accounting Standards, and he has appeared before the Armed Services and Civilian Boards of Contract Appeals, in size and status protests before Small Business Administration (SBA) area offices, and appeals before the SBA Office of Hearings and Appeals. Jim regularly counsels clients on contract interpretation, organizational conflicts of interest, and small business compliance.Jim graduated with high honors from the George Washington University Law School, where he focused his studies on federal procurement law, was a member of the Law Review, and interned with the General Services Administration’s suspension and debarment office. Jim also holds a degree in theology magna cum laude from the Pontifical Gregorian University in Rome and a bachelor’s degree in classical languages and literature summa cum laude from the University of Kentucky, where he graduated Phi Beta Kappa.

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Jim maintains an active practice in bid protests before the Government Accountability Office and contracting agencies and counsels clients in contract disputes and compliance obligations.

Jim Tucker is of counsel in Morrison Foerster’s Government Contracts and Public Procurement Practice Group and is based in the firm’s Washington, D.C. office. Jim’s practice runs the gamut of litigation and counseling in federal procurement matters, with an emphasis on bid protests, Cost Accounting Standards disputes, and small business matters.

James Tucker

<div style="margin-bottom: 15px;" class="videoWrapper"><iframe class="sticky-video" title="Meet Alex Ward, Government Contracts Practice Co-Chair" src="https://www.youtube-nocookie.com/embed/TkliwdSlTaQ?rel=0" frameborder="0" allow="autoplay; encrypted-media" allowfullscreen="1" title="iframe"></iframe></div>J. Alex Ward is co-chair of Morrison Foerster’s Government Contracts and Public Procurement group. His practice covers a full range of government contracts matters, including investigations, bid protests, claims, general litigation, corporate transactions, and counseling. Alex strives in all matters is to provide his clients the highest level of efficient and effective representation.Alex represents contractors in internal and external investigations, disclosures to the government, and qui tam litigation, with great success in reducing or eliminating his clients’ exposure through active engagement with the government. His work in this area includes obtaining numerous declinations and dismissals of False Claims Act cases in their earliest stages, sparing his clients the cost, risk, and exposure of litigation.He has also served as lead counsel in dozens of bid protests involving military and civilian agency procurements of a wide range of products and services, including all manner of pre- and post-award protests in the GAO, the U.S. Court of Federal Claims, and state tribunals, as well as appeals to the U.S. Court of Appeals for the Federal Circuit and size protest appeals before the SBA’s Office of Hearings and Appeals.Alex handles all aspects of the claims process, from the initial assessment and drafting of requests for equitable adjustment through litigation in the Boards of Contract Appeals and the Court of Federal Claims. Alex’s practice also covers the full gamut of other controversies confronting government contractors, including prime-sub, teaming partner, employer-employee, competitor, and indemnification disputes. His litigation work also includes a wide variety of pro bono engagements, in which he has represented both individual and institutional clients in matters ranging from immigration and criminal defense to sustainable procurement and protection of the environment.Prior to joining the firm, Alex served in the U.S. Army as a commissioned officer and an Assistant to the General Counsel of the Army responsible for civil works and international matters, and as a clerk for judges on the U.S. Courts of Appeals for the Armed Forces and the D.C. Circuit. He is a member of the Boards of the Morrison & Foerster Foundation and the Chesapeake Bay Foundation and of Law360’s Government Contracts Editorial Board.

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Alex is co-chair of Morrison Foerster’s Government Contracts and Public Procurement practice. His practice covers a full range of government contracts matters, including bid protests, claims, investigations, corporate transactions, and counseling.

J. Alex Ward

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Morrison Foerster’s Government Contracts Insights blog provides an in-depth analysis of news, developments, and trends impacting government contracting and procurement. Through Insights, attorneys from our nationally recognized Government Contracts and Public Procurement practice will offer a real-time assessment of the statutory, regulatory, legal, and business-related developments that are shaping the industry. This blog will also examine a full array of U.S. and non-U.S. public procurement issues, mindful that our clients compete in a global marketplace.Read about our <a href="http://govcon.mofo.com/editors/">Authors</a>.Never miss a post. Subscribe to get real-time updates.

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James A. Tucker

Kickstarting AI in the Federal Government: OMB’s Policy to Implement Executive Order 14179

Bid Protest Spotlight: Instructions, Price Evaluation, Standing

FAR Overhaul Underway

FedRAMP 20x: Reformulating the Authorization Process

Court of Federal Claims Confirms Jurisdiction over Other Transaction (OT) Bid Protests

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On April 3, 2025, the Office of Management and Budget (OMB) issued two memoranda implementing President Trump’s <a href="https://www.federalregister.gov/documents/2025/01/31/2025-02172/removing-barriers-to-american-leadership-in-artificial-intelligence" target="_blank">Executive Order 14179, Removing Barriers to American Leadership in Artificial Intelligence</a>. <a href="https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-21-Accelerating-Federal-Use-of-AI-through-Innovation-Governance-and-Public-Trust.pdf" target="_blank">Memorandum M-25-21, Accelerating Federal Use of AI through Innovation, Governance, and Public Trust</a> (OMB Memo M-25-21) describes the federal government’s policy on promoting the responsible deployment of artificial intelligence (AI) to drive innovation, economic growth, and national security. It rescinds and replaces OMB Memorandum M-24-10, Advancing Governance, Innovation, and Risk Management for Agency Use of Artificial Intelligence. <a href="https://www.whitehouse.gov/wp-content/uploads/2025/02/M-25-22-Driving-Efficient-Acquisition-of-Artificial-Intelligence-in-Government.pdf" target="_blank">Memorandum M-25-22, Driving Efficient Acquisition of Artificial Intelligence in Government</a> (OMB Memo M-25-22) provides guidance to executive agencies regarding AI procurement. This memorandum rescinds and replaces OMB Memorandum M-24-18, Advancing the Responsible Acquisition of Artificial Intelligence in Government. Both memoranda are generally applicable to executive agencies, with exemptions for national security. Taken together, the OMB memos pave the way for a significant expansion in the use and procurement of AI technologies in the federal ecosystem. We discuss the key aspects of the memos below.<ul><li>Data Rights: OMB Memo M-25-21 contemplates agencies, to the extent permitted by law, retaining the ability to reuse and share AI code and models, including by releasing and maintaining AI code as open-source software in a public repository. OMB Memo M-25-22, on the other hand, directs agencies to have “appropriate processes for addressing use of government data and include appropriate contractual terms that clearly delineate the respective ownership and IP rights of the government and the contractor.” In particular, it directs agencies to (1) scope licensing and other IP rights based on the intended use of AI to avoid vendor lock-in; (2) ensure components necessary to operate and monitor an AI system or service remain available for as long as necessary; (3) provide guidance on handling, accessing, and using agency data or information to ensure that such information is only collected and retained by a vendor when necessary to perform the contract; (4) prohibit the use of non-public inputted agency data and outputted results to train publicly or commercially available AI algorithms without express agency consent; and (5) prioritize obtaining documentation from contractors that facilitates transparency and ensures the ability to track the performance and effectiveness of procured AI. Contractors providing AI services to the government therefore should anticipate data rights negotiations (at least where the AI is not a commercially available solution governed by FAR 52.212-4) and strict parameters around the contractor’s ability to use government data for non-contractual purposes (restrictions that will likely be similar to those applicable to controlled unclassified information).</li><li>Data Privacy: OMB Memo M-25-22 directs agencies to establish “policies and procedures, including contractual terms and conditions, that ensure compliance with privacy requirements” whenever agencies acquire an AI system or service that will create, collect, use, process, store, maintain, disseminate, disclose, or dispose of federal information containing personally identifiable information.</li><li>Promoting Competition and Avoiding Vendor Lock: Both OMB memos identify the need to encourage competition among AI vendors to avoid vendor lock. With respect to building a robust AI marketplace, OMB Memo M-25-22 directs agencies to conduct broad market research, including seeking out novel AI capabilities from new market entrants and providing opportunities for product demonstrations. An initial gating item to market entry, at least for AI vendors operating in the cloud, will be obtaining Federal Risk and Authorization Management Program (FedRAMP) authorization for their AI offerings. Regarding vendor lock, OMB Memo M-25-22 recommends that agencies include solicitation provisions addressing knowledge transfer, data and model portability, licensing (see Data Rights section above), and pricing transparency. It also provides that, “[a]s soon as a decision is made not to extend a contract for an AI system or service,” agencies should work with the vendor to ensure knowledge and data transfer.</li><li>Domestic Preference: Both OMB memos contemplate establishing a domestic preference for AI that is developed and produced in the United States. Exactly how this domestic preference would apply, however, is an open question. Existing domestic preference statutes apply to products rather than services. Although U.S. Customs and Border Protection has treated software as a product when analyzing country of origin under the Trade Agreements Act, AI operators typically view AI as a service (i.e., SaaS) rather than software. That makes existing domestic preference statutes ill-suited to serve as a mechanism to apply a domestic preference for AI. Giving preference to American AI could also complicate existing trade agreements that provide designated countries with access to the U.S. market, unless such agreements are renegotiated or an agency can identify a valid exception. </li><li>AI Use in Government Contract Performance: OMB Memo M-25-22 acknowledges that contractors “will likely increasingly utilize AI as part of contract performance in situations where the government may not anticipate the use of that AI.” It therefore directs agencies to consider including, when appropriate, a solicitation provision requiring disclosure of AI use as part of contract performance. Contractors thus should closely examine their solicitations and contracts to determine whether there are any restrictions on the use of AI in performance. Even where no restriction exists, contractors will ultimately be responsible for whatever AI outputs they rely on for performance.</li><li>Emphasis on Performance-Based Contracting: OMB Memo M-25-22 “strongly encourage[s]” agencies to leverage performance-based requirements when issuing solicitations for AI services. In particular, the memo recommends issuing Statements of Objectives and Performance Work Statements, which eschew “overly limiting requirements” in favor of “outcome-based needs”; Quality Assurance Surveillance Plans, which can help agencies monitor performance effectiveness; and contract incentives, including those tied to achieving Quality Assurance Surveillance Plan metrics. The emphasis on performance-based contracting could promote greater competition by eliminating restrictive requirements that might otherwise preclude AI vendors from entering the federal market and allowing AI contractors to focus on the outcomes that their services can achieve.</li><li>Contract Performance Assessments: OMB Memo M-25-22 directs agencies to include contract terms allowing agencies to regularly monitor and evaluate the performance, risks, and effectiveness of AI systems or services. In addition, the memo encourages agencies to require contractors to regularly self-monitor their AI systems and services and to remediate any unacceptable activity. The memo explains that these monitoring activities should inform agency decision-making as to whether a particular AI system or service is effective and valuable, and it advises that agencies should be prepared to sunset AI systems or services that outlive their worth. These monitoring activities could also prompt potential investigations or enforcement actions under the False Claims Act.</li><li>Minimum Needs v. Best Practices: OMB Memo M-25-21 describes an approach to risk management that focuses on establishing “the minimum number of requirements necessary to enable the trustworthy and responsible use of AI.” Although consistent with the Trump administration’s focus on deregulation and reducing bureaucracy, this focus on minimum requirements appears to reflect a departure from the “best practices” approach generally seen in the regulation of technology, such as in the cybersecurity space, and articulated in existing National Institutes of Standards and Technology guidance, such as the <a href="https://nvlpubs.nist.gov/nistpubs/ai/nist.ai.100-1.pdf" target="_blank">AI Risk Management Framework</a>. Contractors may ultimately have to make discretionary determinations as to what measures must be deployed to adequately mitigate risk for their particular AI use cases.</li></ul>

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Sandeep Nandivada is a partner in the Litigation Department of Morrison Foerster’s Washington, D.C. office.

Sandeep N. Nandivada

Sandeep Nandivada

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Justin Haan is a partner in the firm’s Technology Transactions Group in the San Francisco office, advising leading technology industry pioneers to help them navigate their most critical IP and technology needs.

Justin H. Haan

Justin Haan is a partner in the firm’s Technology Transactions Group and advises clients on a range of issues in the technology and media industries. He also drafts technology license agreements on behalf of licensors and licensees involving a wide range of technologies, including virtual reality devices, cloud platforms, Internet of Things devices, unmanned aerial vehicles, and artificial intelligence applications. Mr. Haan received his J.D., with a certificate in law and technology, from the University of California, Berkeley.

Justin Haan

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DOJ Cyber-Fraud Initiative Highlights Potential Civil Liability for Failing to Meet Federal Cybersecurity Requirements

The Biden administration issued a widely anticipated executive order on artificial intelligence (“AI”) earlier this week. The <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2023/10/30/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence/" target="_blank" dir="ltr">Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence</a> (the “EO”) addresses a multitude of issues reflecting an emerging national policy on AI. This article focuses on those aspects of the EO most directly related to national security and federal procurement.National Security ConsiderationsGenerative and other emerging AI applications have myriad implications for U.S. national and global security. The EO seeks to address a few of these. <ul><li dir="ltr">First, the EO requires that developers of the most powerful AI systems, so-called “dual‑use foundational models,” conduct and report the results of safety testing, and share other critical information with the federal government.  These foundational models implicate national security, economic security, and public health and safety. Companies will also be required to report planned activities in training dual-use AI, developing or producing such systems, and to outline the precautions they are taking during the development process.  The administration invokes the Defense Production Act as the authority for compelling disclosure of this information, much of which will be proprietary.  Although several leading AI companies already share such information voluntarily, this provision seeks greater disclosure regarding companies’ deployment of AI and the testing and risk assessments underpinning AI models.  This disclosure requirement is related to one of the EO’s many agency directives. Specifically, the EO directs the National Institute of Standards and Technology (“NIST”) to develop standards to verify that AI systems are safe, secure, and trustworthy, in the form of companion guidance to already-existing NIST publications, such as the <a href="https://nvlpubs.nist.gov/nistpubs/ai/nist.ai.100-1.pdf" target="_blank">AI Risk Management Framework (NIST AI 100-1)</a><a href="https://nvlpubs.nist.gov/nistpubs/ai/nist.ai.100-1.pdf">.</a></li><li>Second, the EO calls for regulations to require U.S. Infrastructure as a Service (“IaaS”) providers to report transactions with foreign persons to train large AI models with potential capabilities that could be used in malicious cyber activity. The forthcoming regulations will also require IaaS providers to prohibit foreign resellers from providing services unless they provide details about the end users, end uses, and the underlying applications.  This requirement addresses similar concerns that the Department of Commerce flagged in its October 17, 2023 advanced semiconductor rules concerning cloud-based access to advanced computing and AI training models.</li><li>Finally, the EO recognizes the potential for misuse of AI in a manner that might allow non-experts to design, synthesize, acquire, or use chemical, biological, radiological, or nuclear (“CBRN”) weapons. As such, the EO directs the Department of Homeland Security, in consultation with the Department of Energy and the Office of Science and Technology Policy, private AI laboratories, and academia, to evaluate CBRN threats from AI models and develop means to mitigate these risks.  Various government agencies are also directed to consider what government data might present security risks with respect to CBRN weapons and to ensure that such data is restricted from public access and not used to train AI systems.</li></ul>Federal Procurement ConsiderationsThe EO also includes numerous developments and takeaways for government contractors, as the administration, as it often does, leverages its purchasing power to effect policy goals. <ul><li>First, the EO provides guidance for the procurement of AI products and services by federal agencies. The EO directs the Office of Management and Budget (“OMB”) to specify minimum risk-management practices for governmental use of AI.  These requirements include:<ol><li>establishing a Chief Artificial Intelligence Officer (“CAIO”) charged with AI implementation in the agency;</li><li>defining the CAIO’s roles and responsibilities;</li><li>requiring certain agencies to create an AI governance board;</li><li>implementing minimum risk management practices;</li><li>identifying AI uses that impact individual rights or safety;</li><li>recommending ways to reduce barriers to AI use;</li><li>requiring certain agencies to develop AI strategies and pursue advantageous use of AI;</li><li>external AI testing for generative AI, safeguards preventing discriminatory use or other misuse of AI, watermarking, minimum risk management practices, independent assessment of vendor effectiveness and risk mitigation claims, documentation and oversight of AI, maximizing value of contracted AI services, and incentivizing continuous improvement of AI;</li><li>training agency employees on AI; and</li><li>public reporting on compliance with these requirements.</li></ol></li></ul>Additionally, OMB is tasked with requiring that agencies make 		sure that any contracts for AI services address:  privacy, civil rights, and civil liberty concerns; ownership and security of data; and means to prevent misuse, unauthorized use, or corruption of AI systems.  <ul><li dir="ltr">Second, Section 4.5(d) of the EO directs the Federal Acquisition Regulatory Council to consider amending the Federal Acquisition Regulation (“FAR”) to reduce risks posed by “synthetic content” and to require identification of synthetic content produced by AI systems used by the federal government or on its behalf.  The aim is to promote trust in the integrity and authenticity of U.S. government digital content by establishing transparency regarding the provenance of generated content and preventing generation of inappropriate or inaccurate content. </li></ul><ul><li dir="ltr"> Third, in line with this goal, the EO directs the Secretary of Commerce (in consultation with other agencies) to develop standards, tools, methods, and practices for use by federal government agencies and contractors:  (1) to authenticate and track the provenance of AI‑generated material; (2) to label AI content using methods such as “watermarking”; (3) to detect synthetic content; (4) to prevent AI from producing certain abusive, explicit materials, such as nonconsensual, AI-generated representations of real people (i.e., “deepfakes”); to (5) test and (6) audit software for these purposes.  Pending release of this guidance, agencies seeking to obtain AI products or services are required to implement “minimum risk-management practices” defined in Section 10.1(b)(iv). These practices are derived from the White House Office of Science and Technology Policy’s <a href="https://www.whitehouse.gov/ostp/ai-bill-of-rights/" target="_blank">Blueprint for an AI Bill of Rights</a> and the <a href="https://nvlpubs.nist.gov/nistpubs/ai/nist.ai.100-1.pdf" target="_blank">NIST AI Risk Management Framework</a><a href="https://nvlpubs.nist.gov/nistpubs/ai/nist.ai.100-1.pdf">,</a> and they include:  (1) public consultation; (2) review of data quality; (3) assessing and mitigating discriminatory impacts from AI; (4) providing notice when an agency employs AI; (5) continuously monitoring and evaluating AI in use; and (6) granting separate, “human” consideration and remedies for adverse decisions made by AI systems.  Section 7.2 also requires agencies to “use their respective civil rights and civil liberties offices and authorities . . . to prevent and address unlawful discrimination and other harms that result from uses of AI in Federal Government programs and benefits administration.” </li><li>Finally, beyond the directives and proposed regulatory requirements, the EO suggests business opportunities for potential recipients of federal grant and contract funding. It directs the General Services Administration to facilitate government-wide acquisition solutions for AI services and products, thereby creating  future consolidated contracting opportunities to provide AI tools to the federal government.  Specifically, the EO encourages acceleration of grants awarded through the National Institutes of Health Artificial Intelligence/Machine Learning Consortium to Advance Health Equity and Researcher Diversity program and through the Advanced Research Projects Agency-Infrastructure (ARPA-I) to explore transportation-related opportunities and challenges of AI, including regarding software-defined AI enhancements impacting autonomous mobility ecosystems.  The EO also proposes a pilot project to “identify, develop, test, evaluate, and deploy AI capabilities, such as large-language models, to aid in the discovery and remediation of vulnerabilities in critical United States Government software, systems, and networks.”  It also seeks to promote competition and innovation in the semiconductor industry, by working in concert with the Creating Helpful Incentives to Produce Semiconductors (“CHIPS”) Act of 2022 to use AI in the industry and provide other assistance, particularly for small businesses, and to share data for CHIPS research and development programs.</li></ul>Next Steps and Final ThoughtsThe EO requires implementation in the form of agency-issued guidance and potentially legislation to effectuate some of its more ambitious aspects. Given the EO’s tight deadlines, in the coming months we expect to see new agency-level AI policies, as well as requests for information and requests for comments on proposed rules. IaaS providers and developers of “dual-use” AI should anticipate a roll out of reporting requirements and requests for information. Similarly, government contractors should expect that reporting regarding their AI models may become part of the proposal evaluation and embedded as contract requirements, particularly as it relates to safety of AI products, routine testing for bias, and data security and privacy protections. Contractors should also anticipate requirements for AI transparency and provenance to become a feature in government AI procurement.   Although many of the policy details are still under development, the EO represents the Biden administration’s first robust attempt to shape development of the AI industry. ***Additional articles on this Executive Order may be found at <a href="https://www.mofo.com/artificial-intelligence" target="_blank">Morrison Foerster’s AI Resource Center</a><a href="https://www.mofo.com/artificial-intelligence">.</a>

Tina is a partner in Morrison & Foerster’s Government Contracts practice. She represents a wide variety of government contractors including information technology, defense, biotechnology, and pharmace

Tina Reynolds

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Charles Capito is a partner in both Morrison Foerster’s National Security and Government Contracts + Public Procurement practices.
In the National Security space, he has significant experience couns

Charles L. Capito

Charles Capito

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Brandon L. Van Grack co-chairs Morrison Foerster’s National Security and Crisis Management groups. 

Brandon Van Grack

Brandon Van Grack - National Security Lawyer

Brandon L. Van Grack

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The Biden administration issued a widely anticipated executive order on artificial intelligence (“AI”) earlier this week. The Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (the “EO”) addresses a multitude of issues reflecting an emerging national policy on AI. This article focuses on those aspects of the EO most directly related to national security and federal procurement.

National Security and Government Contractor Implications of Biden AI Executive Order

Popular science fiction is replete with examples of artificial intelligence (AI) gone awry, from HAL, the killer AI of Arthur C. Clarke’s 2001: A Space Odyssey, to the supercomputer bent on nuclear annihilation in WarGames, to the robot forces of 2004’s I, Robot.  Concern about the secure, effective, and unbiased use of AI by the Department of Defense (DoD), however, is very real, and of increasing import as DoD makes AI a top technology modernization priority.  Against this backdrop, the DoD <a href="https://www.defense.gov/Newsroom/Releases/Release/Article/2091996/dod-adopts-ethical-principles-for-artificial-intelligence/">announced in late February</a> a series of ethical principles to guide its adoption and use of AI.  (See sidebar)AI, defined in the 2019 National Defense Authorization Act <a href="https://www.congress.gov/115/plaws/publ232/PLAW-115publ232.pdf">(NDAA) § 238 (g)</a> as “an artificial system . . . that solves tasks requiring human-like perception, cognition, planning, learning, communication, or physical action,” has the potential for both untold benefits and potentially deadly hazards.  As advances in hardware allow unsurpassed information collecting capacity, an accompanying need arises to process massive quantities of data at rates that exceed unaided human capabilities.  Both civilian and military agencies are relying increasingly upon sophisticated AI algorithms to assess problems and generate answers at computer speeds without human fatigue.  (Our <a href="https://govcon.mofo.com/artificial-intelligence-robotics/federal-government-expansion-and-application-of-artificial-intelligence-technologies/">prior article</a> highlighted some of the areas of AI research the DoD and other parts of the federal government are pursuing.)  The use of AI thus opens up exciting possibilities.However, when national security depends on the outcome, and the lives of American soldiers or allies may hang in the balance, how do we know we can trust an AI agent to make the right decision?  Enter AI ethics.  The DoD’s newly adopted ethical principles will dictate the foundational design and development principles embedded into AI to be used in both combat and noncombat situations.The DoD’s efforts to design safe and ethical AI technology are not new.  In 2012, <a href="https://fas.org/irp/doddir/dod/d3000_09.pdf">DoD Directive 3000.09</a> established guidelines calling for the “exercise of appropriate levels of human judgment” and “clear human-machine interfaces” in the design and use of autonomous and semi‑autonomous weapons to ensure the solutions functioned as anticipated.  The <a href="https://media.defense.gov/2019/Feb/12/2002088963/-1/-1/1/SUMMARY-OF-DOD-AI-STRATEGY.PDF">Department of Defense Artificial Intelligence Strategy of 2018</a> included “Leading in military ethics and AI safety” among major identified focus areas.  Finally, the five adopted AI principles stem from more than a year of work by the Defense Innovation Board, an independent advisory committee of leaders from industry, academia, and think tanks, as well as current and former military leaders.DoD’s adoption of these ethical guidelines is a message to defense contractors that, to the extent they are not already doing so, they must bring AI ethics into their technology.  The five ethical principles officially adopted by the DoD are also a public declaration of the values and norms that must be embedded into AI solutions to be sold to DoD.Among the most important of these norms is the need to address two of the most persistent issues with AI – “black box” syndrome and bias.  These issues square up against the DoD’s principles of equitable and traceable decision-making.  The black-box nature of AI arises from the complex interplay of thousands of variables.  While the binary choices at any individual decision node is relatively straightforward, the compound effect of layered choices grants AI its power but also makes understanding just how it arrived at a final decision challenging, if not impossible.  Although careful examination of the code may allow for a general understanding, or traceability, of the decision-making structure, typically developers see their source-code as proprietary intellectual property.  How the DoD plans to navigate these IP considerations remains unclear.The opaqueness of AI algorithms also plays into the dangers of bias.  Various studies have shown how imperfections in the data used to train AI may cause an algorithm to produce biased results, whether in predicting the credit-worthiness of mortgage applicants, recidivism among inmates, or patient outcomes in epidemiological studies.  This issue goes to the heart of the DoD’s desire for equitable AI.  While it is plain to see the potential for trouble resulting from bias in an AI-driven hiring and promotion program, the DoD’s potential uses for AI make the stakes much higher.  Smart algorithm designs may avoid more obvious sources of bias, but the current inscrutability of highly complex, deep architectures leaves the door open for hidden biases to enter.The technical challenges presented by bias and black-box syndrome illustrate the need for contractors to view DoD’s five principles not as distinct and severable criteria, but rather as interlocking objectives.  For example, by observing the first principle of responsibility in AI by keeping humans in the loop, observers may be able catch AI systems developing biased output.Adoption of these ethical principles is likely to materially alter the DoD’s procurement of AI‑driven technology.  The new additions have been carved into the bedrock of DoD’s existing commitments as DoD <a href="https://www.defense.gov/Newsroom/Releases/Release/Article/2091996/dod-adopts-ethical-principles-for-artificial-intelligence/">has linked</a> the ethical principles to its existing ethical framework “based on the U.S. Constitution, Title 10 of the U.S. Code, Law of War, existing international treatises and long-standing norms and values.”  Further, DoD has a legal mandate to implement AI ethics in <a href="https://www.congress.gov/115/plaws/publ232/PLAW-115publ232.pdf">section 238 of the 2019 NDAA</a>, which requires the DoD to develop “appropriate ethical, legal, and other policies for the Department governing the development and use of artificial intelligence enabled systems and technologies.”  Thus, the AI ethical principles are not only squarely grounded in long-standing military values, but also mandated by statute.  As a consequence, contractors seeking to provide AI solutions to the DoD should surely pay attention to the new principles and incorporate them into future designs.*Markus Speidel is a Law Clerk in our Washington, D.C. office and not admitted to the bar.

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Department of Defense Adopts AI Ethical Principles to Guide Its Expanded Use of AI

The Data Rights Black Hole:  DOD Lobbies Congress to Eliminate Proprietary Rights in Your Most Valuable Trade Secrets — Your Detailed Manufacturing and Process Data

Popular science fiction is replete with examples of artificial intelligence (AI) gone awry, from HAL, the killer AI of Arthur C. Clarke’s 2001: A Space Odyssey,

Department of Defense Adopts AI Ethical Principles to Guide Its Expanded Use of AI

During next week’s <a rel="noopener" target="_blank" href="https://www.americanbar.org/groups/public_contract_law/events_cle/25-fpi/">ABA Federal Procurement Institute</a>, March 13-16, 2019 in Annapolis, MD, three Morrison & Foerster Government Contracts attorneys will be participating. Partner Damien Specht will serve as one of the conference co-chairs. He is also co-chair of the ABA Public Contract Law Section Mergers and Acquisitions Committee and the ABA Small Business & Other Socioeconomic Programs Committee.On Thursday, March 14, at 8:30AM, Kevin Mullen, co-chair of the firm’s Government Contracts Group, will moderate the panel “The Impact of War on Claims Litigation: Two Decades of Case Developments.” The panelists will examine how nearly two decades of contingency war operations has impacted the Court of Federal Claims and Armed Services Board of Contract Appeals case precedent, and analyze the legal and practical implications of these court and board decisions for future contractor claims.Associate Sandeep Nandivada will be moderating a panel on the same day at 4PM, titled “Data Analytics/Artificial Intelligence—How These Tools Relate to a Government Contract Attorney’s Practice.” This panel will provide an overview of how data analytics, machine learning, and AI can assist lawyers and legal professionals in their practice, using public sector-focused case studies to explore how emerging technologies can assist with investigations, litigation and compliance.

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Kevin is former Co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. 

Kevin Mullen

Kevin is former co-chair of Morrison Foerster’s Government Contracts & Public Procurement practice. He has broad experience in numerous facets of government contracts matters including agency procurements, subcontracting, teaming and joint venture relationships, contract performance issues, intellectual property, compliance matters, due diligence for mergers and acquisitions, and procurement fraud matters.

Kevin P. Mullen

Anser Advisory

ARKA

Arlington Capital

Battle Investment Group

Behrman Capital

Cadmus

Chainalysis

CollabraLink

Definitive Logic

Emmes

Enlightenment Capital

Damien C. Specht

ABA Federal Procurement Institute — MoFo Attorneys Co-Chair and Moderate Panels