Leidos has won a prime contract that will allow the US Army to rapidly procure IT hardware at a time of supply chain disruption using artificial intelligence (AI) solutions.

This contract will provide the US Department of Defense (DoD) with operational visibility and flexibility – allowing the Army to monitor its systems to ensure readiness, availability and performance, all in support of its Joint All Domain Command and Control (JADC2) programme.

If all options are exercised, the contract will be worth $7.9bn. The indefinite delivery, indefinite quantity contract will last four years with two three-year options.

The DoD needs to manage supply chain risks

Leidos has latched onto a significant problem within the DoD that the company believes it can remedy: supply chain risk.

In May 2023, the US Government Accountability Office (GAO) called for the DoD to “fully implement foundational practices to manage supply chain risks.”

The regulatory body explained that IT and communications technologies use parts and services from around the globe.

“Emerging threats in the supply chain for these technologies can put federal agencies – including the DoD – at risk. For example, communications hardware with compromised components could lead to the loss of sensitive data.”

An AI paradox?

Gerry Fasano, Leidos Defense Group president, explained that “Recent events highlighted the devastating effect of supply chain disruptions, making resilience a national priority.

“By combining flexible solutions with [AI] and predictive analytics to increase visibility into operations, we will work to provide a uniquely resilient rapid fulfillment model.”

This may be slightly problematic as the US President Joe Biden is still in the process of securing America’s semiconductor chips – a critical component in powering AI systems.

While the Biden administration has made some headway in securing its domestic chip supply chain, as indicated by the $166bn investment American companies have made in manufacturing semiconductors in the past year, the chip market is not totally secure.

America’s debilitating tech war with China may halt the Asian superpower’s chip development, however some industry commentators are concerned that the policy of decoupling will not stop China’s AI advances in the long-term. This is indicated in the Financial Times when it reported that China is set to surpass Japan as the world’s leading car exporter this year – another system that relies on semiconductor chips.

Although Leidos’ AI and predictive analytics will, certainly in theory, help to secure American supply chains for the rapid procurement of IT hardware, the American defence tech prime may find its job slightly harder than anticipated given the AI supply chain paradox.