AOI.docx

Area of Interest 01 – DLA Finance AI Audit

ATTACHMENT 1: SOLICITATION TOPICS AREAS/AREAS OF INTEREST

1.0 Problem Statement

The Defense Logistics Agency (DLA) seeks innovative solutions leveraging artificial intelligence (AI) to enhance the efficiency and accuracy of its financial reporting and audit processes. As one of the largest government agencies, DLA undergoes annual financial statement and control-based audits. These audits are time-consuming and resource-intensive, often requiring manual review and analysis of large volumes of data to support complex assertions such as the completeness and accuracy of inventory balances. DLA is pursuing transformative, high-impact solutions to streamline these processes, resolve existing material weaknesses, improve audit quality, and reduce the burden on its personnel.

2.0 Background

DLA manages the end-to-end global defense supply chain – from raw material to end user disposition – for the five military services, 11 combatant commands, other federal, state and local agencies, and partner and allied nations. DLA’s mission is to “deliver readiness and lethality to the Warfighter Always and support our nation through quality, proactive global logistics.”

The purpose of this call to industry is to attract and identify best-of-breed solutions to address the problem set and meet operational capabilities. This aligns with the objectives set forth in Sec. 1007 of the Fiscal Year 2025 National Defense Authorization Act, which underscores the importance of AI technology in auditing financial statements within the DoD. With the increasing complexity of financial reporting requirements and the massive amount of data to be managed, DLA is looking to incorporate artificial intelligence (AI) into its financial reporting processes. DLA is committed to leveraging cutting-edge technology to optimize its operations and ensure the highest level of transparency and accountability in its financial reporting, enhance its decision-making abilities, identify potential cost-saving opportunities, and improve the overall effectiveness of its financial management.

3.0 Desired Solution Features

Pain Points:

· Time-consuming and resource-intensive processes

· Manual review and analysis of large volumes of data

· Potential for human error in identifying anomalies and discrepancies

· Difficulty in identifying and addressing potential errors and accuracy

4.0 Project Expectations

4.1 In 12-16 weeks, iteratively demonstrate phased approach to how solution will address operational capabilities below, or another critical capability, demonstrate potential for scalability and adaptation to other financial processes or components in future phases.

4.2 Demonstrate the envisioned AI capabilities that should lead to addressing operational capabilities listed below, a significant reduction in manual processing errors, substantially faster reporting times, and/or more insightful analytics capable of detecting irregularities.

4.3 Hosting - Initial prototypes could leverage vendor hosted environments. This is dependent on technical details of the hosting environment and cybersecurity controls in place. NOTE: Any long-term hosting in a vendor environment (i.e. Software as a Service SaaS) would require FedRAMP authorization. Additionally, DLA operates private cloud environments leveraging major providers (Azure, AWS, etc.) that can host vendor solutions once appropriately vetted. Offerors are encouraged to submit solution briefs that outline how their solution is currently hosted and describe the level of effort to meet DoD cybersecurity standards.

4.4 Solution providers should expect to participate in a shared development space with other vendors and government developers to rapidly deploy, monitor and iterate upon solutions. Solution providers may be asked to collaborate and/or participate in cross-functional efforts and/or in a teaming arrangement. The government intends to identify one or more integrators as a solution provider, but vendors are also welcome to team with integrators prior to submission.

5.0 Operational Capabilities

Here are some major categories that are currently impacting the DoD audit results. Please note that this list is not exhaustive. Feel free to select a category from this list, but if there are other areas that may be advantageous for DOD in achieving a clean audit, consider those as well.

5.4 Update financial systems to substantially comply with The Federal Financial Management Improvement Act of 1996 (FFMIA).

5.5 Design and implement internal controls related to the following six areas. 1) Access controls 2) Configuration Management 3) Segregation of Duties 4) Security Management 5) Information Technology Operations 6) Interfaces.

5.6 Support the valuation, existence and completeness of general property plant equipment (PP&E).

5.12 Obtain from accounting systems the support necessary to reconcile trading partner differences in accounting (Revenue and expenses, accounts payable, accounts receivable, etc.)

5.13 Eliminate excessive manual preparation of the annual financial report (to include note disclosures and background information).

5.14 Aggregate all DLA inventory data into a single system and reconcile the data to all feeder systems real-time, thereby supporting the assertions of accurate and complete perpetual inventory which can be queried DoD-Wide with mil-service partners.

6.0 Foreign Ownership and Control

The proposer shall provide details of any foreign ownership or control that may exist within their corporate structure.

7.0 Rough Order of Magnitude (ROM)

Proposer solution brief must provide a ROM estimate for each desired solution feature in section 3 above.

8.0 Submission Instructions

Solutions Briefs are due no later than April 9, 2025, 11:59 PM EDT. Please submit the Solution Briefs via email to Thomas Walsh Thomas.Walsh@dla.mil and Lauren Runowski lauren.runowski@dla.mil