Attracting Commercial Artificial Intelligence Firms to Support National Security through Collaborative Contracts

TL;DR

This paper explores why commercial AI firms are interested in working with the DoD despite legal and procurement obstacles, proposing strategies to align contracting practices with industry preferences.

Contribution

It introduces the optimal buyer theory and offers best practices for using existing contract law to attract commercial AI firms to defense contracts.

Findings

Commercial AI firms view the DoD as an attractive customer.

Traditional contract law and procurement practices are significant obstacles.

Leveraging other transaction authority can better align contracts with industry needs.

Abstract

Unlike other military technologies driven by national security needs and developed with federal funding, AI is predominantly funded and advanced by commercial industry for civilian applications. However, there is a lack of understanding of the reasons commercial AI firms decide to work with the DoD or choose to abstain from the defence market. This thesis argues that the contract law and procurement framework are among the most significant obstacles. This research indicates that the commercial AI industry actually views the DoD as an attractive customer. However, this attraction is despite the obstacles presented by traditional contract law and procurement practices used to solicit and award contracts. Drawing on social exchange theory, this thesis introduces a theoretical framework, optimal buyer theory, to understand the factors that influence a commercial decision to engage with the DoD. Interviews from a sample of the participants explain why the AI industry holds such perceptions, opinions, and preferences about contracts generally and the DoD, specifically, in its role as a customer. This thesis concludes that commercial AI firms are attracted to contracts that are consistent with their business and technology considerations. Additionally, it develops best practices for leveraging existing contract law, primarily other transaction authority, to align contracting practices with commercial preferences and the machine learning development and deployment lifecycle.