The Department of Defense recently issued a proposed rule to amend the Defense Federal Acquisition Regulation Supplement and implement a section of the National Defense Authorization Act for fiscal 2023. This would permanently authorize and change the DOD Mentor-Protégé Program (MPP), a pilot that was established during the Gulf War and is the oldest continuously operating federal mentor-protégé program in existence. 

Under the MPP, small businesses are partnered with larger companies. According to the DOD, during the past five years, the MPP has successfully assisted more than 190 small businesses in making key connections within various niches, thus becoming part of the military’s supply chain. 

This proposed rule acknowledges that the program is no longer a temporary pilot program. Unlike the pilot program, the new Proposed Rule reduces a Mentor’s eligibility ceiling from $100 million to $25 million; extends the term of the deal from two years to three; and allows Mentors to provide manufacturing, test and evaluation assistance to the Protégé. 

Nixing the deadline for entering into a mentor-protégé agreement is also proposed, as it is no longer applicable since the program is no longer temporary. Therefore, this proposed rule removes specific dates for mentor reimbursements and credit toward subcontracting goals under MPP agreements entered into after Dec. 23, 2022. 

Also, the proposed rule includes the addition of “manufacturing, test and evaluation” to the list of assistance that a mentor may provide to a protégé under an agreement, plus the addition of “manufacturing innovation institutes” to the list of assistance that a mentor firm may obtain for the protégé firm. 

As for the date for making comments to these proposed DOD mentor-protégé program changes, all size companies are encouraged to make your position known by the deadline of Dec. 23, 2023 here.

Addressing AI

The White House has released an executive order that is intended to harness the advantages of Artificial Intelligence while maintaining awareness of its potential risks, marking the latest attempt to stay atop of AI’s rapid evolution and advancement ― which has inspired high expectations along with a large dose of fear concerning what could happen should something go wrong.

The executive order will require developers of potent AI systems to share safety test results with the federal government prior to public release; notify the federal government in the event of an AI model potentially posing national security, economic or health risks under the Defense Production Act; and ease immigration barriers for workers skilled in critical areas of AI to study, work and stay in the U.S.

Another critical part of the executive order dictates that it will also set standards to prevent AI production of hazardous biological materials; and develop best practices to diminish the risk of AI displacing human workers. 

Lastly, it will be set up to prevent AI-related fraud by directing the Commerce Department to develop guidance for watermarking content, as well as set standards for government use.

Speaking of AI fraud, separately, two malicious AI sites, FraudGPT and WormGPT have been identified as AI sites intent on stealing users data.

White House addresses increasing industry competition

While mergers and other consolidations can lead to great payoffs for buyers and sellers, they can also decrease the competition that is part of a healthy economy. With that in mind, President Biden has targeted antitrust trends as a key segment of his domestic agenda to increase competition.

The White House said the new guidance will help administer those efforts through an “all-of-government approach to competition,” with a new document from the Office of Information and Regulatory Affairs (OIRA) set up to create frameworks for agencies as they develop and analyze potential regulatory actions.

The OIRA document noted that agencies can shape markets via their regulations and advised them to draft rules to increase competition: “Analyzing how regulations influence competition can provide insights critical to crafting policy, including how to achieve other policy goals while also increasing competition,” the guidance said.

The document also addressed how agencies can ascertain if their regulations would have “significant effects on market structure and the competitive process” and went on to provide technical information for agency employees conducting regulatory analyses. For example, it suggested modifying proposed rules during the drafting stage to enhance interoperability, toward the end of enabling customers to switch from one product to another.

It was also advocated considering rules that regulate general performance, with the hoped-for result of firms coming up with innovative solutions to meet certain requirements. One would be requiring all electric charging stations to work in sync with all makes and models; another would be a decree that allows the over-the-counter sale of hearing aids. 

Agencies should also consider the eventual impact of their regulations from even more angles, such as if they grant exclusive rights to a given firm and/or type of firm if they’re structured to benefit some companies but not others, create higher switching costs for consumers or restrict workers’ ability to change jobs.

Gloria Larkin is President and CEO of TargetGov, and a national expert in business development in the government markets. Email [email protected], visit www.targetgov.com or call toll-free 1-866-579-1346 x 325 for more information.