How Defense Contractors Can Use AI Agents to Win More Tenders

Hi, I’m founder of Mavlon. For the last couple of years, I’ve been obsessed with a single problem. It’s a problem that I see grinding small and medium sized defense contractors to a halt.

It's the problem of the manual solicitation.

You know the one. You’re a defense contractor, you’ve been in this business for decades. You get a massive, 30-page tender document from a prime contractor or a government agency. And you know, you just know, that the next full day of your most trusted employee’s time is about to be vaporized.

They’ll be squinting at PDF line items, highlighting part numbers, and engaging in the soul-crushing, error-prone task of "cut and paste." ¹

They'll copy specs into one spreadsheet. They'll copy part numbers into another. They'll dig through old emails to see who you bought from last time. They'll manually create ten different RFQ emails to send to ten different suppliers.

This entire process is a painful, slow, and expensive bottleneck. And the worst part? It’s a compliance nightmare. A single typo, a single misplaced decimal, can cost you the entire contract.

I’ve looked at this process, a process that still runs on spreadsheets and human transcription, and I’ve just had to ask: Why?

Why are we still doing this manually in an age of artificial intelligence?

This isn't a rhetorical question. The answer to how defense contractors can use AI is no longer a "nice to have" for the future. It is the single biggest competitive advantage you can deploy right now. The tools are here. It’s time to stop cutting and pasting, and start winning.

The Real, Hidden Costs of Your Manual Process

You might be thinking, "It's just the cost of doing business. We've always done it this way."

I want to challenge that. This manual process isn't just a cost; it’s an anchor. It’s holding your entire business back. The real price you're paying is hidden in plain sight.

1. The "Full Time Admin" Cost

I've had contractors tell me, point blank, "I have one person on staff who literally just does this. They copy data from solicitations and create RFQs all day." 2

Let's be conservative. A fully-loaded employee, with salary, benefits, and overhead, costs you $70,000, $80,000, maybe $90,000 a year. You are spending nearly six figures on a task that a machine can do in 30 seconds.

This is the most obvious area where the question of how defense contractors can use ai provides an immediate, hard-dollar ROI.

2. The "Single Typo" Cost

This is the one that should keep you up at night. Your admin is human. They're on their 40th line item of the day. They're tired. They accidentally type "100 units" instead of "1000 units." Or they mix up a "7" and a "T" in a critical part number.

You win the bid. Congratulations. And you've just legally committed to a contract that is now massively unprofitable, all because of one manual error.

An AI agent doesn't get tired. It doesn't get bored. It doesn't make typos. It achieves 99.9% accuracy on data extraction, every single time. This isn't just about efficiency; it's about risk management.

3. The "Speed to Bid" Cost

Your manual process takes, let's say, a full day to process a tender and get RFQs out to suppliers.

Your competitor, who is using an AI agent, does it in 15 minutes.

This means their suppliers are already working on pricing before your team has even finished reading the document. They get their final, consolidated bid back to the customer 24 hours before you do.

Who looks faster, more professional, and more on-the-ball? Speed is a weapon, and a manual process is like bringing a knife to a gunfight.

4. The "Growth Ceiling" Cost

This is the most painful cost of all. How many tenders do you look at and say, "We just don't have the bandwidth to bid on this one"?

Your company's growth is literally capped by how fast your admin can type.

If you could process 50% more solicitations with the same team, what would that mean for your revenue? If you could free up your senior people from reviewing basic paperwork, what would that mean for your strategy?

Your manual process is a bottleneck that is choking your company's potential. Understanding how defense contractors can use AI isn't just about saving money; it's about unlocking growth.

How Defense Contractors Can Use AI

When I say "AI," a lot of people think of a public chatbot. Let's be very clear. You cannot, and should not, ever paste a sensitive, ITAR-controlled solicitation into a public AI tool.

That is not what we are talking about.

When I talk about how defense contractors can use ai, I'm talking about a secure, private, purpose built AI agent that lives inside your own ecosystem.

It’s an "AI Sales Engineer" or an "AI Procurement Assistant" that is trained only on your data, works only for you, and automates your entire workflow, end to end.

This is what it should do. This is the new standard.

The Workflow of an AI Agent for Defense Procurement

Here is the step by step process that you should be automating:

1. Read the Customer Solicitation: The agent ingests the entire document. A 50-page PDF, an email with attachments, a technical drawing. It reads all of it.

   
   

2. Extract All Critical Data: The AI parses the document and instantly extracts the key information:

   • All line items, no matter how they're formatted.

   • Part Numbers (PNs) and CAGE/NSN codes.

   • Detailed product descriptions and specifications.

   • Required quantities and units.

   • Delivery deadlines.

   • Compliance requirements (e.g., "ITAR Certified," "MIL-SPEC-810G").

     
     

3. Log the Project: The agent automatically creates a new project in your system, assigning its own internal project number. It logs all extracted data into your database, creating a perfect, searchable record.

   
   

4. Generate Supplier RFQs: This is the magic. The agent takes the extracted items and automatically generates professional RFQ documents, on your company's letterhead, with your internal file numbers.

   
   

5. Intelligently Match Suppliers: The AI then scans your supplier database and past procurement history. It answers the question: "Who can supply this?" It can suggest suppliers because:

   • It knows they make the part (capability).

   • It knows you've sent them similar parts before (history).

     
     

6. Provide a Human-in-the-Loop Interface: The AI doesn't just run wild. It presents its plan to you on a simple dashboard. "I'm ready to send RFQs for these 20 parts to these 15 suppliers. Please review and approve."

   
   

7. Review and Approve: You are the expert. You look at the list, uncheck one supplier, add another, and click "Approve." You are managing the strategy, not the paperwork.

   
   

8. Automate Dispatch: The agent instantly sends all the customized RFQs to the approved suppliers via email.

   
   

9. Maintain Audit Trail: Every action is logged. Every document is stored. You now have a perfect, searchable history of who got what RFQ, what part numbers were on it, and when it was sent. Your compliance officer will thank you.

   
   

10. Collect Supplier Quotes: This is the final piece. As your suppliers email their quotes back, the AI agent for defense procurement reads their replies (even the messy PDF attachments), extracts their pricing and lead times, and organizes it all.

    
    

11. Present a Final Bid Dashboard: The agent shows you a clean, side by side comparison of all incoming supplier quotes, allowing you to easily pick the best options and create your final, most profitable bid for your customer.

    
    

This is how defense contractors can use AI. It's not a small feature. It's a complete transformation of your core revenue-generating process.

The "Before and After" Scenario

Let's imagine a day in the life.

Before: The Manual Nightmare

• 9:00 AM: A 40-page solicitation hits your inbox.

• 9:01 AM: You assign it to your procurement admin.

• 11:00 AM: Your admin is still on page 15, "cutting and pasting" part numbers into an Excel sheet.

• 1:30 PM: Your admin has the list, but now has to bother a senior engineer to ask which suppliers to use.

• 3:00 PM: The engineer is busy. The process is stalled.

• 5:00 PM: The RFQs are finally ready to be sent, full of potential typos. An entire day is gone.

  
  

After: The AI Agent Workflow

• 9:00 AM: The 40-page solicitation hits the AI's inbox.

• 9:02 AM: The AI has read, extracted, and logged all data. It has created a draft RFQ plan and suggested all suppliers. A notification is sent to your procurement lead.

• 9:15 AM: Your procurement lead, on their coffee break, opens the platform on their tablet. They review the AI's plan, uncheck one supplier, and click "Send All."

• 9:16 AM: All supplier RFQs are out.

• 9:17 AM: Your team is already working on the next tender.

  
  

This isn't an exaggeration. This is what's possible.

Addressing the Real Fears

I know what you're thinking, because I've had these conversations. As a founder, these are the three biggest hurdles I hear every day.

Objection 1: "AI? In defense? What about ITAR and security?"

This is the most important question. You are right to be paranoid. Any vendor who tells you to just "upload your data to our cloud" is a non-starter.

The only way how defense contractors can use ai is with a secure, private architecture.

• You Own Your Data: The platform must be designed so that your sensitive data (solicitations, supplier lists, pricing) is stored in a database that you own and control. ³

  
  

• Secure Models: We use secure, enterprise-grade AI models, not the public consumer versions. Your data is never, ever used to train a public AI.

• Compliance First: The entire system must be built with a compliance-first mindset, understanding the unique needs of ITAR and CGP.

  
  

Security isn't a feature. It's the foundation.

Objection 2: "I'm a small business with a limited budget. This sounds expensive."

This is the "limited budget" objection, and it's looking at the problem from the wrong end.

You are not buying a new, expensive piece of software. You are replacing your single most expensive and inefficient line item: the cost of manual data entry.

Look at it this way:

• Cost of Manual Process: $80,000/year (for that one admin) + $XX,XXX in lost deals from errors + $XXX,XXX in lost opportunities.

• Cost of AI Agent: A predictable annual software license that is a fraction of that single employee's salary.

  
  

You cannot afford not to do this. A large prime contractor can afford to throw 20 people at this problem. As a small business, your only path to compete is with leverage. AI agents for defense procurement are that leverage.

Objection 3: "I don't want to fire my admin. He's loyal."

This is the "full time employee" question 4, and it's the best part. This isn't about replacing people. It's about upgrading them.

You are not firing your admin. You are promoting them.

• Before: They were a "Human Copier."

• After: They are an "AI Operator" and a "Procurement Strategist."

  
  

Their new job is to manage the AI, review its suggestions, handle the 5% of complex exceptions, and spend their new free time on high-value work. They are now focused on negotiating with suppliers, building relationships, and analyzing pricing trends.

You've just turned a cost center into a profit center.

The Future is Already Here

The world of defense procurement is changing. The old way slow, manual, and risky - is dying.

The future is about speed, accuracy, and leverage. The question of how defense contractors can use AI is no longer theoretical. It's the practical, here-and-now solution to your biggest bottleneck.

It's time to stop paying people to "cut and paste."

It's time to empower your team, scale your business, and win more bids.

If you're tired of the paperwork and ready to see what an AI agent can do for you, let's talk. We at Mavlon are building this platform specifically for contractors like you.

The future of your business depends on it.