GAO Examines AI Opportunities and Oversight Gaps in Small Business Contracting
The Government Accountability Office (GAO) issued a report examining how artificial intelligence (AI) could be deployed across federal small business programs, evaluating potential applications for agency Offices of Small and Disadvantaged Business Utilization (OSDBUs) and the Small Business Innovation Research and Small Business Technology Transfer (SBIR/STTR) programs.
The evaluation highlights how AI tools could assist agencies with market research, proposal reviews, data analysis, and fraud prevention. However, implementation across small business contracting oversight remains stalled. In March 2025, the Small Business Administration (SBA) paused all internal AI use cases to evaluate compliance with executive orders and agency priorities. Furthermore, despite statutory requirements established under the Advancing American AI Act to publish annual public inventories of AI use cases, SBA failed to release its first inventory until March 2026. GAO recommended that SBA establish explicit policies and procedures to meet mandatory transparency and reporting requirements moving forward.
Impact on Small Business Suppliers
For small business contractors, agency adoption of AI tools could accelerate market research match-making and streamline early-stage technical proposal evaluations. However, ongoing governance gaps and sudden operational pauses at oversight agencies like SBA delay the adoption of automated tools designed to detect fraud and lower administrative barriers for federal suppliers.