AI AUTOMATION FOR GOVERNMENT CONTRACTORS

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Built for how contractors actually operate

Your best people spend 60% of their time assembling proposals from scratch — rewriting past performance narratives they've already proven, reformatting compliance matrices they've already passed, and chasing down SMEs who've already answered the same questions. Meanwhile, your competitors with better systems are winning YOUR recompetes.

1.2-3%of contract value consumed by proposal costs alone
SOLICITATION NOTICE
SOL-2026-SW-0001
Avg Proposals/Year:15-25
Avg Cost Per Proposal:$150K-$300K
Current Win Rate (Non-Incumbent):15%
Proposal time allocation:
Past Performance Search & Assembly35%
Compliance Matrix Building25%
Technical Writing & Formatting25%
Review Cycles (Pink/Red/Gold)15%
FINDING: 80% of proposal content already exists in your organization. You're paying senior engineers to do document assembly.
The Intelligence Brief

IN THE MATTER OF:

Federal Contracting Operations

SECTION L: MARKET INTELLIGENCE

The GovCon market is consolidating around contractors who can win efficiently and execute compliantly. Proposal costs are rising, margins are thinning, and the contractors who invest in operational systems are pulling ahead.

1.15%

Average Win Rate

Industry-wide proposal win rate, meaning 85% of proposal investments produce zero revenue

(Lohfeld Consulting Group, 2024)

2.$200K+

Cost Per Proposal

Average fully-loaded cost of a competitive federal proposal for mid-size contractors

(APMP Benchmarking Study, 2024)

3.1.2-3%

Proposal Cost Ratio

Percentage of contract value consumed by proposal development costs

(Shipley Associates, 2024)

4.23%

Invoice Rejection Rate

Percentage of government invoices requiring resubmission due to preventable errors

(NCMA Contract Management Survey, 2024)

5.2.3 years

BD Tenure

Average tenure for GovCon business development professionals before departure

(ClearanceJobs Market Survey, 2024)

6.$18.5M

Timekeeping Deficiency Cost

Annual industry cost from DCAA timekeeping-related billing system deficiencies

(DCAA Annual Report to Congress, 2024)

The consolidation squeeze

Large primes are absorbing mid-tier competitors while small businesses struggle with compliance costs. Mid-size contractors ($25M-$100M) face the worst of both worlds: enterprise compliance requirements without enterprise resources. Operational efficiency is no longer optional — it is survival.

30%Mid-Tier Consolidation

of mid-tier contractors acquired or merged in the last 3 years due to margin pressure

(Washington Technology Top 100, 2024)

The compliance ratchet

CMMC 2.0, CUI requirements, Section 889 compliance, and evolving DCAA interpretations create a compliance burden that grows every year. Contractors are spending more on compliance infrastructure and less on delivery — exactly the wrong direction for margin improvement.

15%Compliance Overhead

of indirect costs consumed by compliance activities for mid-size contractors

(PSC Federal Market Survey, 2024)

The automation gap

Large primes are deploying AI for proposal development, contract analytics, and compliance monitoring. Mid-tier and small businesses are still using shared drives and manual processes. The gap in proposal quality and operational efficiency is widening every quarter.

65%AI Priority

of GovCon executives say AI adoption is a top-3 priority but only 12% have deployed production systems

(Deltek Clarity Report, 2024)

PRE-PROPOSAL CONFERENCE

Field Intelligence Reports

Dispatches from BD directors, proposal managers, and contract administrators about a typical week in GovCon.

Monday 6:30am
SITUATION:

BD director gets a GovWin alert: must-win recompete RFP dropped Friday at 5pm. 30-day response window. 200-page technical volume required. No pre-positioned content.

“That's $40M of our existing revenue at risk. We need to stand up a full proposal team by noon and we don't even have a compliant outline yet.”

THE HIDDEN COST:

4 senior people pulled off billable work for 30 days. $180K in direct proposal costs before a single word hits the page.

Tuesday 2pm
SITUATION:

Proposal manager needs past performance narratives from 3 SMEs who supported the last IDIQ. Two are deployed, one left the company 6 months ago.

“These narratives exist somewhere — we wrote them for the OASIS recompete. But our shared drive has 47 versions and nobody tagged which was final.”

THE HIDDEN COST:

20+ hours per proposal reconstructing past performance from scratch when prior narratives already exist in the organization.

Wednesday 10am
SITUATION:

DCAA auditor arrives for a floor check. Asks to see timekeeping records for three contracts from the last 90 days. Accounting scrambles to pull reports from two different systems.

“We passed last year's audit, but we changed timekeeping systems since then. I'm not confident our crosswalk is clean.”

THE HIDDEN COST:

DCAA questioning costs an average of $18.5M in billing system deficiencies across the industry annually. One failed audit can crater your rates.

Thursday 4pm
SITUATION:

Three invoices rejected in WAWF this week. One CLIN mismatch, one missing DCAA-required backup, one formatting error on the SF-1034. Cash flow delayed by 45+ days.

“That's $340K sitting in limbo because someone transposed a CLIN number. Our DSO is killing us and I can't make payroll from receivables.”

THE HIDDEN COST:

$200K+ in average monthly delayed revenue from preventable invoice rejections. Every rejection extends DSO by 30-60 days.

Friday 6pm
SITUATION:

Post-mortem on a lost recompete. Incumbent for 7 years, lost on technical approach. Debrief reveals the winning proposal reused structured content from their knowledge base while your team wrote from scratch under deadline pressure.

“We had the past performance, we had the relationships, we had the incumbency advantage. We lost because their proposal was better written — and they had more time to write it because they weren't starting from zero.”

THE HIDDEN COST:

Average recompete loss costs $2-5M in annual revenue plus $200K+ in wasted proposal investment. 60% of recompete losses cite proposal quality, not technical capability.

SECTION M

Evaluation Criteria

Identified Weaknesses in Current Operations

Every inefficiency shows up in three places: win rate, cash flow, or compliance risk.

SIGNIFICANT WEAKNESS

FINDING 1: Proposal Assembly: Reinventing the Wheel — SIGNIFICANT WEAKNESS

THE FINDING:

Every proposal starts from a blank page. Past performance narratives get rewritten from memory instead of pulled from a structured library. SMEs answer the same questions across multiple proposals. Color team reviewers flag the same issues cycle after cycle because there is no institutional learning loop.

EVIDENCE:

60%of proposal development time spent on content that already exists somewhere in the organization
$120K-$200K per proposal in direct labor costs

CONTRACTOR TESTIMONY:

“We wrote the same CMMI narrative four times this year. Four different proposal teams, four different versions. None of them pulled the version that actually won us the OASIS recompete.”

DEFICIENCY

FINDING 2: Audit Readiness: Always Preparing, Never Prepared — DEFICIENCY

THE FINDING:

DCAA compliance is not a one-time event — it is a continuous state that most contractors fail to maintain. Timekeeping policy violations accumulate quietly. Indirect rate pools drift out of alignment. When the auditor arrives, the scramble to produce clean records exposes months of sloppy processes compressed into a panic week.

EVIDENCE:

15%of overhead costs consumed by compliance preparation and audit response
$250K-$500K annually in compliance overhead for mid-size contractors

CONTRACTOR TESTIMONY:

“Our controller spends three months a year preparing for audits that could be continuous if our systems talked to each other. We're paying six figures for someone to reconcile spreadsheets.”

SIGNIFICANT WEAKNESS

FINDING 3: Timekeeping: The $18.5 Million Risk — SIGNIFICANT WEAKNESS

THE FINDING:

FAR 31.201-4 requires adequate timekeeping, and DCAA interprets adequacy strictly. Employees charging to wrong CLINs, late corrections creating audit trails, and inconsistent policies across contracts create systemic risk. One timekeeping deficiency finding can result in suspended billing across all contracts.

EVIDENCE:

$18.5Maverage annual industry cost from timekeeping-related billing system deficiencies
$50K-$500K per contractor in questioned costs from timekeeping issues

CONTRACTOR TESTIMONY:

“An employee charged 40 hours to a T&M contract they weren't authorized on. It took three weeks to unwind, cost us a DCAA finding, and we're still fighting the questioned costs.”

SIGNIFICANT WEAKNESS

FINDING 4: WAWF/IPP: The Cash Flow Strangler — SIGNIFICANT WEAKNESS

THE FINDING:

Every rejected invoice in WAWF or IPP adds 30-60 days to your cash conversion cycle. CLIN mismatches, missing backup documentation, SF-1034 formatting errors, and COR approval delays stack up into hundreds of thousands in delayed revenue every month. Meanwhile, you still have to make payroll.

EVIDENCE:

23%of government invoices require resubmission due to preventable errors
$200K+ monthly in delayed revenue from invoice rejections

CONTRACTOR TESTIMONY:

“We submitted $1.2M in invoices last month. $340K got kicked back for CLIN mismatches. My CFO is managing cash flow with a spreadsheet and prayer.”

RISK

FINDING 5: GSA Schedule: The Compliance Tax — RISK

THE FINDING:

Maintaining a GSA Schedule requires continuous price monitoring, IFF fee calculations, modification processing, and catalog updates. Most small-to-mid contractors treat it as a set-and-forget vehicle until a compliance review surfaces years of drift — and potential price reduction penalties.

EVIDENCE:

40+hours per quarter spent on GSA Schedule maintenance and compliance reporting
$30K-$75K annually in compliance labor for Schedule maintenance

CONTRACTOR TESTIMONY:

“We haven't updated our GSA pricing in 18 months. I know it's wrong, I know the IFF calculations are off, and I know the MAS PMO will eventually notice. I just don't have the bandwidth to fix it.”

DEFICIENCY

FINDING 6: Capture Knowledge: It Walks Out the Door — DEFICIENCY

THE FINDING:

When a capture manager leaves, they take the competitive intelligence, customer relationships, teaming partner history, and win/loss patterns with them. There is no structured handoff because the knowledge lives in email threads, personal notes, and memory. Average GovCon BD tenure is 2.3 years — shorter than most capture cycles.

EVIDENCE:

2.3 yearsaverage tenure for GovCon BD/capture professionals before departure
$150K-$300K per departure in lost pipeline intelligence and relationship value

CONTRACTOR TESTIMONY:

“Our best capture manager left for a competitor. She took 14 months of competitive intelligence on a $60M opportunity with her. We're starting the capture from scratch with 90 days to RFP.”

SECTION C

AI automation by contract type

Every contract type has unique compliance requirements, invoicing procedures, and operational pain points. Here is how AI transforms operations across the most common vehicles.

Highest compliance burden with DCAA audit exposure on every cost element. Timekeeping accuracy and indirect rate pool management are existential requirements. Incurred cost submissions require months of preparation annually.

CPFF (Cost Plus Fixed Fee)CPAF (Cost Plus Award Fee)CPIF (Cost Plus Incentive Fee)Incurred Cost Submissions

Key Workflows

Timekeeping & Labor Distribution

Employee time validation, CLIN authorization checks, correction processing

Automation
80%
Indirect Rate Pool Management

Rate calculations, CAS compliance, provisional vs final rate reconciliation

Automation
75%
Incurred Cost Submission (ICE Model)

Schedule preparation, G/L reconciliation, adequacy checklist compliance

Automation
70%
DCAA Audit Response

Document production, sampling response, finding remediation

Automation
60%

Benchmarks

Avg Hours / Year400-800 hours/year compliance
Avg Cost / Year$200,000-$400,000 annually
SourceDCAA Annual Report 2024

Priority Opportunities

Automated Timekeeping Validationcritical
Time savings70-85%
Cost savings$50K-$100K per year
high
Continuous Rate Pool Monitoringhigh
Time savings60-75%
Cost savings$40K-$80K per year
high
ICE Model Auto-Populationhigh
Time savings50-70%
Cost savings$30K-$60K per submission
medium

Past Performance References

What this looks like in practice

Example scenarios based on common GovCon challenges. Numbers reflect industry benchmarks.

$40M recompete. 30-day RFP window. No pre-positioned content. Incumbent advantage nearly wasted.

$80M annual revenue|Defense services contractor|D.C. metro

Challenge

Seven-year incumbent on a $40M task order, but the recompete RFP dropped on a Friday afternoon with a 30-day response window. The proposal team had no structured content library — prior proposals lived across shared drives, email attachments, and departed employees' laptops. Traditional proposal assembly would take 1,200 hours and consume the entire BD team for the full response window, leaving zero time for strategy or differentiators.

Contract Value$40M/year
RFP Response Window30 days
Traditional Proposal Effort1,200 hours
Content Library Items0 structured

Outcome

AI-powered proposal system indexed 47 prior proposals, tagged 312 reusable past performance narratives, and auto-assembled a 70% compliant first draft in 72 hours. Proposal team spent remaining time on win themes and discriminators. Pink Team completed in one day instead of three. Won the recompete with Excellent technical ratings. Evaluated cost was 8% below competitor.

“We had 30 days and no content library. The system built one for us in three days. We won because we had time to write a great proposal instead of just a compliant one.”

Unannounced DCAA floor check. Timekeeping system migration mid-stream. Zero findings.

$45M annual revenue|IT services contractor|Northern Virginia

Challenge

DCAA arrived for an unannounced floor check six weeks after the company migrated from one timekeeping system to another. The crosswalk between systems was incomplete. Three contracts had employees with time corrections spanning both systems. The controller was certain they would receive multiple findings that could result in suspended billing across all cost-type contracts.

Active Contracts22
Cost-Type Contracts at Risk8
Time Corrections in Limbo147
Revenue at Risk$18M/year

Outcome

Continuous compliance monitoring system had been validating every time correction against both old and new systems since migration day one. When DCAA arrived, clean reconciliation reports were produced in 20 minutes. All 147 corrections had documented audit trails. Zero findings. Auditor noted the contractor's timekeeping controls as a positive example. Billing was never interrupted.

“The auditor walked in and I felt my stomach drop. Twenty minutes later, she was complimenting our controls. I didn't know whether to laugh or cry.”

23% invoice rejection rate. $340K in monthly WAWF limbo. DSO strangling growth.

$30M annual revenue|Professional services contractor|Maryland

Challenge

The company was growing revenue but starving for cash. Nearly one in four invoices submitted through WAWF was rejected for preventable errors — CLIN mismatches, missing backup documentation, SF-1034 formatting issues. Each rejection added 30-60 days to the collection cycle. DSO had climbed to 68 days. The CFO was borrowing against their line of credit to make payroll while $340K in earned revenue sat in WAWF rejection queues every month.

Monthly Invoiced$1.2M
Rejection Rate23%
Monthly Cash in Limbo$340K
Days Sales Outstanding68 days

Outcome

Pre-submission validation system caught CLIN mismatches, missing backup, and formatting errors before invoices hit WAWF. First month: zero rejections on 14 invoices. DSO dropped from 68 to 34 days within 90 days. CFO retired the credit line. The company used the freed cash flow to self-fund a $2M capture investment for their largest-ever opportunity. Won it.

“We went from borrowing to make payroll to self-funding our biggest capture ever. Same revenue, better systems. The math wasn't complicated — we just needed to stop leaving money in WAWF.”

Volume II

Technical Approach

Four operational workflows, four custom-built AI systems. Each one addresses a specific pain point with measurable before-and-after results.

Every proposal starts from scratch. Past performance narratives get rewritten by different teams who never see each other's winning versions.

AI-powered content library indexes every past proposal, tags winning narratives by evaluation criteria, and auto-assembles compliant first drafts from structured content — cutting proposal development time by 60%.

Before800-1,200 hrs/proposal

Capture teams burning out on copy-paste. SMEs dodging proposal managers. Color team reviewers flagging the same issues every cycle.

After300-500 hrs/proposal

Proposal managers focus on strategy and compliance. SME input is captured once and reused. Color teams review substance, not formatting.

60% reduction

“Pink Team reviews drop from three days to one when the draft is already 70% compliant before human review begins.”

Volume IV

We understand government contracting

Technical Qualifications & Industry Intelligence

Building AI for GovCon is not like building AI for commercial businesses. FAR/DFARS compliance, DCAA audit requirements, and security clearance considerations demand specialized understanding.

I. Compliance Framework Awareness

FAR/DFARS Compliance

Our systems are built with Federal Acquisition Regulation and Defense FAR Supplement requirements as foundational constraints. Cost accounting, timekeeping, and billing workflows comply with FAR Part 31 cost principles and CAS requirements.

DCAA Audit Standards

We understand DCAA audit procedures — floor checks, incurred cost audits, pre-award surveys, and billing system reviews. Our systems maintain audit-ready documentation at all times and support the specific record formats DCAA expects.

CMMC 2.0 Readiness

Cybersecurity Maturity Model Certification requirements inform our security architecture. We build systems that support CUI handling requirements and can operate within your existing CMMC compliance boundaries.

Small Business Compliance

We understand small business subcontracting plan requirements, SBA size standard implications, and the compliance requirements for 8(a), HUBZone, SDVOSB, and WOSB certifications.

II. Tech Stack Familiarity

ERP / Accounting

Deltek Costpoint

ERP / Project Management

Unanet

Business Intelligence

GovWin IQ

Federal Registration

SAM.gov

Invoice Submission

WAWF / IPP

Contract Data

FPDS

CRM / Pipeline

Salesforce GovCon

Productivity

Microsoft 365 GCC

III. Data Sources & Research

  1. 01Deltek Clarity GovCon Industry Study
  2. 02DCAA Annual Report to Congress
  3. 03Lohfeld Consulting Win Rate Benchmarks
  4. 04APMP Proposal Benchmarking Study
  5. 05NCMA Contract Management Survey
  6. 06Washington Technology Top 100
  7. 07PSC Federal Market Outlook

IV. Regulatory Context

FAR Part 31 Cost Principles

Our systems enforce allowability, allocability, and reasonableness standards for cost accumulation and billing. Unallowable costs are flagged and segregated automatically.

Cost Accounting Standards (CAS)

We support CAS-covered and CAS-exempt contractors with appropriate cost accounting practices, disclosure statement compliance, and consistency requirements.

DFARS / ITAR Requirements

For defense contractors, our systems accommodate DFARS-specific requirements including ITAR data handling, Section 889 compliance, and Buy American Act tracking.

VOLUME III

Calculate your potential ROI

Enter your organization's numbers to see potential savings. All calculations are based on industry benchmarks and conservative assumptions.

Contractor Parameters

$15

Total annual government contract revenue

200,000

Number of competitive proposals submitted annually

30

Total number of active contract vehicles

175%

Percentage of invoices rejected in WAWF/IPP requiring resubmission

$15

Fully-loaded cost per competitive proposal (labor + ODCs)

Potential Recovery

Proposal Cost Reduction

$1,800,000

Proposals/Year x Avg Proposal Cost x 60% automation savings

Cash Flow Recovery

$3,000,000

Annual Revenue / 12 x Invoice Rejection Rate x 80% error reduction

Compliance Overhead Reduction

$9,000

Active Contracts x $15K avg compliance cost x 70% automation

Timekeeping Validation Savings

$42,000

Active Contracts x 520 hrs/year x $75/hr x 75% automation

Total Annual Savings

$4,851,000

Sum of all savings categories

ROI Multiple

40.4x

Total Annual Savings / Estimated Annual Partnership Cost

  • 1.Proposal cost reduction assumes 60% savings on content assembly and compliance checking (Lohfeld Consulting benchmarks)
  • 2.Invoice rejection reduction assumes 80% of current rejections are preventable formatting/data errors (NCMA Survey)
  • 3.Compliance overhead reduction assumes 70% savings on audit preparation through continuous monitoring (DCAA best practices)
  • 4.Timekeeping savings assume 520 hours/year per contract in validation and correction processing
  • 5.ROI calculated against Operations Partnership tier. Actual results vary by contract mix and organizational maturity.
  • [1]Lohfeld Consulting Group Win Rate Study 2024
  • [2]APMP Proposal Cost Benchmarking Report 2024
  • [3]DCAA Annual Report to Congress 2024
  • [4]NCMA Contract Management Body of Knowledge Survey 2024

Evaluation Results

Award Determination

I. Contractor Testimony

Imagine 70% of a compliant draft pre-built before a human touches it. Pink Team reviews going from three days to one. That's what a structured proposal intelligence system delivers.

— VP of Business Development perspective
Defense services contractor scenario
Example scenario

With continuous compliance monitoring, an unannounced DCAA floor check becomes a 20-minute exercise instead of a week-long scramble. That's the difference between reactive and proactive compliance.

— CFO perspective
IT services contractor scenario
Example scenario

Pre-submission invoice validation is designed to drop rejection rates from 20%+ to under 3%. For a contractor invoicing $1M+/month, that means hundreds of thousands freed from WAWF limbo.

— Controller perspective
Professional services contractor scenario
Example scenario

When your best capture manager leaves, a knowledge management system ensures 14 months of competitive intelligence stays with the organization. New hires become productive in weeks, not months.

— CEO perspective
Defense and intelligence contractor scenario
Example scenario

II. Before & After

BD / Capture Team

Before:

60% of time on proposal assembly, SME chasing, and content formatting. Capture managers carrying intelligence in their heads and email threads.

After:

Focus on strategy, customer relationships, and win themes. Proposal content pre-assembled from structured library. Intelligence survives personnel changes.

60% reduction in proposal assembly time

From copy-paste operators to strategic capture professionals. Win rates improve because humans spend time on differentiators, not compliance.

Contracts & Compliance

Before:

Living in fear of the next DCAA floor check. Three months per year on audit prep. Manual reconciliation of timekeeping across multiple systems.

After:

Continuous compliance monitoring with real-time dashboards. Audit-ready documentation maintained automatically. Floor checks become routine conversations.

70% reduction in compliance overhead

From defensive accounting to proactive financial management. Controllers become strategic advisors instead of audit firefighters.

Finance / CFO

Before:

Managing cash flow with spreadsheets and prayer. 23% invoice rejection rate. DSO of 68+ days strangling growth.

After:

Predictable revenue cycles. Pre-validated invoices. DSO under 35 days. Cash flow supports growth instead of constraining it.

DSO reduced from 68 to 34 days

From survival mode to growth planning. CFO focuses on strategic investments and M&A instead of collections and payroll anxiety.

The Firm

Before:

Competing on incumbency and relationships alone. Losing recompetes to better-organized competitors. Institutional knowledge walking out every 2.3 years.

After:

Competing on proposal quality and operational excellence. Recompete win rates climb. Knowledge compounds as an organizational asset.

Higher PWIN scores, better recompete rates

From "this is just how GovCon works" to "our systems are our competitive advantage"

Task Order Structure

How we work with government contractors

We understand FAR/DFARS economics, DCAA compliance requirements, and the reality of capture timelines. We build custom AI systems for contractors like yours.

Operations Assessment

Fixed scope, discussed during consultation
Scope:

We audit your proposal, compliance, and invoicing workflows to identify the 3-4 highest-ROI automation opportunities specific to your contract mix and organizational maturity.

Deliverable:

Prioritized opportunity roadmap with economics and implementation sequence

2–4 weeks
Learn more
Most Popular

Compliance Readiness Pilot

Fixed scope, discussed during consultation
Scope:

Prove the value on a single compliance or proposal workflow. See AI-assisted operations in action before committing to organization-wide implementation.

Deliverable:

Production-ready system for one workflow with metrics comparison

4–8 weeks
Learn more

Operations Partnership

Monthly partnership, scoped to your needs
Scope:

Embedded engineering partner building custom systems across your proposal, compliance, and revenue operations. Most popular for mid-size contractors.

Deliverable:

Production AI systems, ongoing enhancement, priority support

Ongoing monthly engagement
Learn more
In the matter of: Operational Excellence

Notice to Proceed

REQUEST FOR OPERATIONAL IMPROVEMENT — The undersigned contractor, by and through its leadership team, respectfully requests immediate relief from manual proposal operations, reactive compliance postures, and institutional knowledge risk.

Talk to someone who understands GovCon economics

FAR compliance, DCAA readiness, PWIN optimization, proposal economics. We speak your language.

Requested Outcomes:
  1. 1.That proposal teams compete on strategy and vision, not document assembly
  2. 2.That DCAA compliance is continuous and automated, not crisis-driven
  3. 3.That every invoice is right the first time and cash flow is predictable
  4. 4.That institutional knowledge belongs to the firm, not to any individual
No commitment required
30-minute initial conversation
All discussions confidential

Or email hello@scalewerk.net directly

Respectfully submitted,

SCALEWERK CONSULTING LLC

Counsel for Operational Excellence