Artificial Intelligence (AI) in
Contracting: A Friendly Debate
Breakout Session #: CO3
John Dobriansky, MS, MBA, CPCM, NCMA Fellow
Chris Robey, MBA, MPP, CPCM, NCMA Fellow
Date: Monday, July 25
Time: 4:00 PM – 5:15 PM
AI in Contracting: A Debate
• Administrative matters
– Introductions
– Debate format, rules, timing, voting, etc.
– Debate proposition:
– We welcome audience participation
through Q&A and your vote!
3
AI in Contracting: A Debate
• Cautionary Note:
– Beware the Gartner Hype Cycle
4
AI in Contracting: A Debate
• What is AI?
– Artificial intelligence . . . is an evolving
constellation of technologies that enable
computers to simulate elements of
human thinking — learning and
reasoning among them.
– “AI Hits the Mainstream,” MIT
Technology Review, May 2016
5
AI in Contracting: A Debate
• State of the art
– Typology
• Taxonomies, ontologies, folksonomies,
tagging mechanisms and other techniques
for organizing information
• How to represent knowledge in a way that
an AI can use
– “The beginning of wisdom is to call things
by their proper names.” – Aristotle
– "Where we're going, we don't need
roads." – Dr. Emmett Brown, Back to the
Future
6
AI in Contracting: A Debate
• State of the art
– Michael Mills
7
AI in Contracting: A Debate
• The Five Tribes of AI
– P. Domingos
8
AI in Contracting: A Debate
• What the AI agent is and is not
─ Turing Test

─ Disembodied 
─ Deep Learning 
• Ability of a computer to refine its methods
automatically and to improve its results as it
gets more data
-- E. Brynjolfsson and A. McAfee, The Second Machine Age
─ Machine learning 
• Based on algorithms that can learn from data
without relying on rules-based programming
-- D. Pyle and C. San Jose, McKinsey Quarterly, June 2015
9
AI in Contracting: A Debate
• Deep Learning
10
AI in Contracting: A Debate
• Corporate players – FB 10 year plan
11
AI in Contracting: A Debate
• Corporate players – Startups
12
AI in Contracting: A Debate
• Corporate players - Avatars
Amazon
AI Division/
Subsidiary
(internal)
Avatar
Persona
Alexa
Apple
(internal)
Siri
Parent
Comment
From SRI acquisition, original
project funded by DARPA
Silicon Valley footprint; working
on speech recognition in English
and Mandarin
Baidu
Baidu Research TBD?
Facebook
(internal)
Messenger “M” -
Google
Deep Mind
Google
Assistant
Acquired in 2014 $400M, UK
talent pool
IBM
Watson
TBD?
Cognitive computing model
Cortana
XiaoIce avatar for China market
TBD?
Open source, not for profit
Microsoft
Tesla
Microsoft
Research
OpenAI
13
AI in Contracting: A Debate
• Socializing the agent through contextaware avatars
– “Anything you can do,
I can do better . . .”
– IPSoft – Eliza, Amelia
– IT help desk avatars
– From customer
engagement to
workforce optimization
– Offshore BPO’s being displaced
– Services going up the value chain
14
AI in Contracting: A Debate
• Socializing the agent through contextaware avatars
– “You start with something simple, maybe
just offering information, then you start
doing transactions.”
– “We obviously want to automate
everything, but you have to prioritize.”
-- Suresh Kumar, CIO,
Bank of New York Mellon
15
AI in Contracting: A Debate
• Applications relevant to procurement
Negotiation
agent
16
AI in Contracting: A Debate
• Policy resource/adviser
– Natural language Q&A
• Access policy guidance from the Web
– Cognitive computing for USAF
acquisition
• SBIR/STTR project based on IBM Watson
– Applied Research in Acoustics
» Machine Interface for Contracting Assistance (MICA™)
– KalScott Engineering
» SOPHIA Cognitive Computing Solution for
Procurement
17
AI in Contracting: A Debate
• Policy resource/adviser
– Automated processes to support
• Requirements definition
• Systems engineering
• Risk management
– Benefits
• “. . . over time I expect these types of tools
can help people in the Air Force,
government and industry better navigate
what is a very complex bureaucracy.”
-- Dr. Camron Gorguinpour, Director of
Transformational Innovation, USAF Office
of the Assistant Secretary (Acquisitions)
18
AI in Contracting: A Debate
• Roles and missions
– Negotiation
• Agent-based
• Current SOA for supply chain algorithms in
e-commerce and e-trading environments
• Game theory to avoid negotiation dead ends
• Blockchain tech to avoid repudiation of
agent agreements by principals
• As agents become more sophisticated
– Where does legal responsibility for agent actions
fall between website operator and principal?
19
AI in Contracting: A Debate
• Roles and missions
– Negotiation
• FAR 13 Simplified acquisition for commercial
items through reverse auctions? Easy!
• FAR 15 Source selection through
negotiation? Hard!
• AI will have a role to play in tradeoff process
for cost/schedule/performance risk
20
AI in Contracting: A Debate
• Expanding domains
– Commercial labor force effects
• Drivers of Second Machine Age
(E. Brynjolfsson and A. McAfee)
– Exponential improvement in computing through
Moore’s Law
– Large amounts of digital information
– Recombinant innovation
• McKinsey & Company
– Think activities, not occupations
– “. . . as many as 45 percent of the activities
individuals . . . perform can be automated by
adapting currently demonstrated technologies.”
21
AI in Contracting: A Debate
• Expanding domains
– C. Frey and M. Osborne
–(
Computerisation
bottleneck
Creative
Intelligence
Variable
Description
Originality
The ability to come up with unusual or clever
ideas about a given topic or situation, or to
develop creative ways to solve a problem.
Social
Being aware of others' reactions and
Perceptiveness understanding why they react as they do.
Social
Intelligence
Negotiation
Bringing others together and trying to
reconcile differences.
Persuasion
Persuading others to change their minds or
behavior.
Assisting and Providing personal assistance . . . emotional
Caring for support, or other personal care to others
Others
such as coworkers (or) customers
22
AI in Contracting: A Debate
• Expanding domains
– AWF labor force effects
• Commoditization of services to expand and
extend to AWF
• Commercial AI research emphasis on SCM
for services at boundary between clerical
and professional tasks
• Analysis of job content for automation
(C. Frey and M. Osborne - next slide)
– If Pr > .47, then occupation is a candidate for
outsourcing
– Proxy measure for displacement by AI
23
AI in Contracting: A Debate
Rank
Probability
Label SOC
Code
Occupation
111.
0.03
11-3061
Purchasing Managers
182.
0.13
13-1111
Management Analysts
217.
0.23
13-2051
Financial Analysts
321.
0.57
13-1051
Cost Estimators
401.
0.73
11-3011
Administrative Services Managers
423.
0.77
13-1023
Purchasing Agents, Except Wholesale, Retail,
and Farm Products
589.
0.94
13-2011
Accountants and Auditors
594.
0.94
13-2031
Budget Analysts
643.
0.96
43-3021
Billing and Posting Clerks
671.
0.98
43-3031
Bookkeeping, Accounting, and Auditing Clerks
680.
0.98
43-3061
Procurement Clerks
24
AI in Contracting: A Debate
• Conclusion
“. . . when all that is solid melts into air.”
-- Marx
25
AI in Contracting: A Debate
• Debate proposition:
AI-driven business processes will make
significant inroads into procurement
activities within five (5) years, with major
effects upon the acquisition workforce
within ten (10) years.
26
AI in Contracting: A Debate
• References
Slide
Source
4
Gartner, Inc.
5
“AI Hits the Mainstream,” MIT Technology Review, May 2016
Michael Mills, "Artificial Intelligence in Law – The State of Play in 2015?"
Legal IT Insider, November 3, 2015
7
Pedro Domingos, The Master Algorithm: How the Quest for the
Ultimate Learning Machine Will Remake Our World, Basic Books, 2015
8
E. Brynjolfsson and A. McAfee, The Second Machine Age, Norton, 2014;
D. Pyle and C. San Jose, " An executive’s guide to machine learning,"
McKinsey Quarterly, June 2015
9
10 NVIDIA Corporation
11 Facebook Newsroom, April 13, 2016
Shivon Zilis, "The current state of machine intelligence 2.0," O'Reilly,
12 December 10, 2015
Jason Ankeny, “Meet Amelia, the AI Platform That Could Change the
14 Future of IT,” Entrepreneur, June 2015
Hugh Son, “We’ve Hit Peak Human and an Algorithm Wants Your Job.
15 Now What?” Bloomberg News, June 8, 2016; The 3D Avatar Store
27
AI in Contracting: A Debate
• References
Slide
16
17
18
19
20
21
22
23
24
25
Source
Yinping Yang, et al., “Reducing Mistrust in Agent-Human Negotiations,”
IEEE Intelligent Systems, March/April 2014; U.S. Army Contracting
Command, U.S. Army Virtual Contracting Enterprise
Christian Davenport, “The Pentagon’s procurement system is so broken
they are calling on Watson,” The Washington Post, March 18, 2016
Maj. Dayan Araujo, “Cognitive computers primed to change the Air
Force acquisition landscape,” Secretary of the Air Force Public Affairs,
August 3, 2015
Yinping Yang, et al, op.cit.
Yinping Yang, et al, op.cit.
E. Brynjolfsson and A. McAfee, op.cit.; M. Chui, J. Manyika, and M,
Miremadi, “Four fundamentals of workplace automation,” McKinsey
Quarterly, November 2015
Carl Benedikt Frey and Michael A. Osborne, “The Future of
Employment: How Susceptible Are Jobs to Computerisation?,” Oxford
University and the Oxford Martin Programme, September 17, 2013
Frey and Osborne, op.cit.
Frey and Osborne, op.cit.
Murray Nicol, "What can we expect from the next industrial
revolution?" World Economic Forum, September 10, 2015
28
Contact Information
John Dobriansky
703-524-9139
[email protected]
Chris Robey
202-344-3263
[email protected]
29