Applied AI Where the Regulation Is the Work
This is the practice where we proved the lab model, in a heavily regulated environment. In government contracting, FAR and DFARS, cost accounting standards, DCAA exposure, earned value, ITAR, and CMMC determine what you are allowed to build in the first place, which makes them a starting input rather than a final check.
What sits on the rest of this site applies here as well. This section covers what is different.
Primes, Suppliers, Space, and Research
What Has to Be Built In
In most industries compliance runs as a workstream alongside the build. Here it is the architecture. A lab in this sector has to respect these from the first design decision, since retrofitting them means rebuilding.
FAR & DFARS
Clause identification, flow-down to subcontracts, and obligation tracking from award through closeout. The regulation determines what the system is allowed to do, which makes it a design input rather than metadata on the contract.
Cost Accounting Standards
Consistency in estimating, accumulating, and reporting costs, with disclosure statement alignment enforced in the systems rather than asserted in a binder. Thresholds and coverage rules have moved recently, and the systems have to keep up.
DCAA Audit Readiness
Labor, material, indirect rates, and business systems evidence assembled continuously instead of reconstructed under audit, so the supporting trail is available on demand.
DFARS Business Systems
Accounting, estimating, purchasing, MMAS, EVMS, and property, each with its own criteria and each capable of triggering payment withholds on failure. Our view is that monitoring them is a continuous problem rather than an annual one.
EVMS
Earned value that reconciles to the general ledger and to the schedule, with variance analysis drafted against the actual drivers rather than assembled by hand the week the report is due.
ITAR, EAR & CMMC
Controlled data stays inside a controlled boundary. We would treat that as an architecture decision made at stand-up, since it constrains where models run and where data can travel.
Built for This Sector
These came out of our own lab, running against live SAP environments in government contracting. Deploy as-is, extend to fit, or use as the pattern for something specific to your programs.
Common Questions
- Why does aerospace and defense have its own practice?
- In this sector the compliance frame determines what you are allowed to build, where data can live, how costs must be accumulated, and what evidence you have to be able to produce. Our view is that a lab treating FAR, CAS, and ITAR as constraints to handle later produces work that cannot be used.
- Can AI be used in a DCAA-audited environment?
- Yes, provided it is built to be explainable and auditable: each action logged with its inputs and reasoning, human decision authority retained where the decision matters, and evaluation results you can show. In our experience auditors apply the same requirement here as to any other process, which is to show the work.
- How do you handle ITAR and export-controlled data?
- Controlled data stays inside a controlled boundary, and that boundary is designed at stand-up rather than retrofitted. Where a compliant hosting environment is required, we provide one. Model access, data residency, and personnel access are part of that design.
- Do you support CMMC requirements?
- Yes. The lab environment is built to fit inside your CMMC scope rather than expanding it, and hosting options that meet those requirements are available for organizations that want us to host.
- Do you work with SAP and Deltek environments?
- Yes. Our deepest experience is SAP, including S/4HANA Project System, cost management, and the Dassian layer that many contractors run on top of it. We also integrate with Deltek Costpoint and the other platforms common in this sector.
- We are a mid-size supplier, not a prime. Does this fit?
- Yes, and often better. Mid-size suppliers carry most of the same compliance obligations with a fraction of the overhead to absorb them, which is the gap applied AI closes. The model scales down cleanly.
- What can we deploy without building from scratch?
- Proposal to Cash covers bid through billing through closeout. Labor Management covers timekeeping compliance and rate defensibility. Integrated Master Scheduling links the schedule to ERP cost data. Material Costing handles BOM-level tracking and long-lead procurement. All of them were built against live systems in this sector.
- Is this different from the rest of what Mach12 does?
- The lab model is the same. What differs is the compliance frame it operates inside, the accelerators available, and the fact that the people doing the work have spent years in government contracting rather than learning it from a regulation summary.
Talk to the A&D Practice
Tell us about your programs, your systems, and your compliance exposure. In most cases we have seen the environment before.
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