Federal agencies face a growing challenge: managing oversight, compliance, and service delivery at the speed and scale of today’s government operations. Fraud, waste, and abuse continue to strain resources while expectations for speed and transparency are on the rise.
Artificial Intelligence (AI) isn’t just a buzzword—it’s becoming a powerful tool for oversight, decision-making, and a way to amplify human expertise across the federal space.
Why AI Works in the Federal Space
The federal space is uniquely suited to AI: Government-scale challenges are data-rich and complex, making them ideal for AI applications and advanced analytics. Recent initiatives such as the March 2025 executive order on eliminating data silos and the FY25 regulatory cap and deregulation efforts the stage is set for agencies to unlock the full potential of data-driven innovation—with contractors playing a critical role in bridging the strategy gap between AI promise and operational reality.
AI thrives in environments where data volume, variety, and velocity overwhelm traditional methods. Predictive analytics and anomaly detection enable proactive decisions, whether that’s integrating logistics, procurement, and readiness data for faster response or surfacing risks hidden in millions of transactions. Importantly, AI doesn’t replace federal expertise—it amplifies it. Human-AI teaming ensures that agency leaders and contractors stay in control, while AI accelerates insights.
AI Momentum Across the Government
The federal government is already seeing AI driving measurable impact across agencies:
- At the U.S. Treasury, AI models now flag suspicious tax filings in real time, spot patterns of improper claims, and enhance audit efficiency across vast datasets. The Treasury reported that machine learning AI-driven initiatives prevented and recovered over $4 billion in fraud and improper payments in FY24—a dramatic increase from $652.7 million in FY23.
- Similarly, the Internal Revenue Service (IRS) has leveraged AI, leading to shorter review times, higher accuracy, and fewer false positives. According to an audit report from the Treasury Inspector General for Tax Administration (TIGTA), the IRS uses AI to streamline tax return reviews, flag inconsistencies, and enhance regulatory compliance.
- In response to the Operation Gold Rush—which involved $10.6 billion in false Medicare claims—federal agencies established the Heath Care Fraud Data Fusion Center, Proactive analytics by the Department of Justice (DOJ), Health & Human Services (HHS), and the Centers for Medicare & Medicaid Services (CMS) jointly prevented $4.45 billion in improper Medicare disbursements and recovered millions.
- The Defense Logistics Agency (DLA) is harnessing AI to secure its supply chain and strengthen fiscal oversight. Through its AI Center of Excellence, launched in 2024, DLA has deployed more than 55 models across supply chain risk management, inventory reconciliation, and demand planning. These tools evaluate tens of thousands of vendors, flag high-risk actors, uncover supplier fraud, and transform siloed data into actionable intelligence.
These successes prove AI is more than theory—it’s operational. The challenge now is scaling lessons learned while safeguarding compliance and trust.
Preparing for an AI-Driven Future
Momentum is building: In line with America’s AI Action Plan and the DOJ’s May 2025 Galeotti Memo, the General Services Administration (GSA) recently announced a landmark OneGov partnership with OpenAI: Federal employees have universal access to ChatGPT via a new evaluation suite, USAi.Gov. This marks a turning point: AI will no longer be a niche experiment but a daily tool embedded into the federal workforce.
Agencies can take steps now to prepare:
- Start small with targeted, high-impact use cases.
- Ensure data quality and accessibility.
- Build change management strategies to support adoption.
- Engage with trusted providers to start bridging the gap from potential to operational impact.
Our Commitment to Innovation
As agencies expand their AI journeys, the need for partners with deep domain expertise has never been greater. With decades of federal oversight and audit experience, CSCI is uniquely positioned to guide responsible AI adoption—balancing innovation with compliance and mission alignment.
Whether it’s preempting improper claims, detecting fraud, or unlocking audit insights across vast financial datasets, AI is a force multiplier. We’re ready to partner with agencies to bring these capabilities to your mission.
Let’s start the conversation. Connect with us via our contact form or on LinkedIn today!