**Washington DC**: The US Army, handling over 100,000 contracts annually worth $84.5 billion, employs AI to detect $2.2 billion in underused funds. This technology improves financial management by reallocating savings to urgent priorities, enhancing transparency and mission readiness.
The U.S. Army manages an extensive contracting operation, undertaking over 100,000 contracting actions annually to support 180 missions in 50 countries. These contracts encompass a broad range of essential equipment and services critical for mission readiness. The U.S. Army Contracting Command (ACC), the Army’s primary procurement agency, reported that the estimated value of these contracts reached approximately $84.5 billion for the fiscal year 2024, accounting for nearly 70 percent of the Army’s total budget.
Despite the significant allocation, a considerable portion of these funds remains underutilised due to contracts that do not fully expend their allocated budgets. This phenomenon is not restricted to the Department of Defense; similar challenges occur across various federal government agencies. The root causes stem from reliance on preliminary estimates, a lack of transparency in the contracting process, and the dynamic nature of mission requirements that can fluctuate even monthly, leading to mismatches between budget allocations and actual needs.
Unspent funds within existing contracts represent a valuable resource that could be redirected toward other critical and often underfunded priorities. Enhancing the transparency and predictability of contracting processes is vital in addressing this issue.
Advanced artificial intelligence (AI) technologies offer a solution by enabling government agencies and military organisations to more precisely predict contract funding needs from the outset, thereby minimising the creation of unliquidated surpluses. Furthermore, AI can analyse ongoing contracts to identify pockets of unused funds suitable for reallocation.
A practical example comes from Georgia’s state-level IT modernisation initiatives, where AI has improved oversight of government expenditure. Broadening this approach, agentic AI is expected to enable even greater benefits across various agencies.
Within the U.S. Army, adoption of the DataRobot Enterprise AI Suite has produced notable outcomes. AI models developed using this technology successfully identified contracts at risk of underspending, revealing about $2.2 billion in funds that could be redirected to critical areas. Bakari Dale, the Army’s Senior Advisor for Enterprise Data Science and AI, told Government Technology Insider, “Our model was deployed into the Army Vantage Platform, allowing ACC to de-obligate [unspent] funds and reuse them for other priorities. The Army…identified nearly $1 billion annually over the last two years and reallocated these critical funds due, in part, to successful machine learning technology.”
Besides financial benefits, these AI tools have automated many aspects of the de-obligation process, freeing procurement teams to concentrate on essential mission tasks rather than combing through contracts for potential inefficiencies.
At all levels of government, from local to federal, organisations face the challenge of meeting vast mandates with finite resources. Contract funding based on evolving or uncertain requirements can inadvertently restrict budget flexibility. AI-driven platforms provide enhanced visibility into the contracting lifecycle, enabling agencies to adjust budgets more responsively.
By uncovering these hidden financial surpluses, government organisations can optimise the use of existing budgets to support priority programmes without waiting for additional funding allocations. This approach represents a strategic enhancement in financial management aligned with mission needs.
Source: Noah Wire Services