Tapping into Booming AI Tech Demand from Feds

Read time: 2 minutes

Hi AI Pro!

Uncle Sam wants you—or at least he wants your AI tech.

The amount of federal contracts going in this direction is large today, and forecast to possible grow by 10x in the near future…

WHAT’S UP?

The US federal government’s demand for AI tech includes $3.3 billion allocated in the 2025 federal IT budget, according to new analysis from the market research firm Canalys.

Meanwhile, Congress is considering additional investment for “AI innovation projects” through a bipartisan package that proposes $32 billion in discretionary spending across non-defense agencies.

In April and May of this year, $13 billion of new IT services contracts were announced by major federal agencies, including the US Army, Office of Federal Student Aid, Federal Aviation Administration and FBI.

WHY IMPORTANT

Federal contracts offer a significant growth opportunity for businesses. However, navigating the federal contracting landscape can be challenging. One effective strategy to tap into this market is through establishing channel partnerships.

As agencies turn for support in the face of pending deadlines for cloud migration and acceleration in AI spending, “there is a notable rise in IT spend captured by channel partners, indicating a strong 2025 for the channel,” according to the report.

WHAT TO DO

In federal contracting, establishing channel partnerships can help you navigate the complexities and break into market, by sharing resources and combining expertise to bid on and execute contracts.

Small businesses can earn numerous beneficial designations that increase their federal business opportunities, such as the Small Business Administration, Service-Disabled Veteran-Owned Small Business, Minority Owned Business Enterprise and Women-Owned Small Business certifications.

Benefits of Channel Partnerships

Expanded Capabilities: Partnering with other companies can help you offer a broader range of services and solutions, making your bids more competitive.

Resource Sharing: Sharing resources such as technology, personnel, and expertise can reduce costs and increase efficiency.

Increased Credibility: Partnering with an established company can enhance your credibility and increase your chances of winning contracts.

Steps to Establish Channel Partnerships

Identify Potential Partners: Look for companies that complement your strengths and fill gaps in your capabilities. Ideal partners may include businesses with federal contracting experience, specialized expertise, or complementary products and services.

Define Partnership Objectives: Determine what you aim to achieve together. Establishing clear goals will help guide your partnership strategy and ensure both parties are aligned.

Develop an Agreement: Create a formal partnership agreement that outlines the roles, responsibilities, and expectations of each party. Include details on revenue sharing, resource allocation, intellectual property rights, confidentiality, and dispute resolution.

Leverage Complementary Strengths: Identify and leverage each partner’s strengths to create a compelling value proposition for federal contracts. This may include combining technical expertise, sharing marketing resources, or tapping each other’s customer networks.

Collaborate on Bids: Work together on developing and submitting bids with a comprehensive and competitive proposal.

Ensure Compliance: Federal contracts come with strict compliance requirements. Ensure both parties are aware of and adhere to all relevant regulations and standards. This includes maintaining proper documentation, following ethical practices, and meeting reporting requirements.

Establishing channel partnerships is a strategic way to tap into the federal contracting market. By collaborating with other companies, you can expand your capabilities and increase your chances of winning federal contracts.

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