SR&ED Case Study: Generative AI Development

Background

A software company wanted to use a generative model to produce technical documentation drafts from structured engineering data, but standard fine-tuning of an off-the-shelf language model produced outputs that were fluent but frequently factually inconsistent with the source data.

The Challenge

Existing fine-tuning and prompt-engineering techniques could not reliably constrain the model’s output to remain factually grounded in structured source data across varied document types.

Technological Uncertainty

It was not known whether any combination of retrieval grounding, output constraints, and fine-tuning could achieve the required factual consistency without degrading output fluency, given the variability of the underlying structured data.

Experimental Development

The team tested multiple retrieval-augmented generation configurations, structured-output constraint methods, and post-generation verification techniques, measuring factual consistency rates against a manually annotated test set after each change.

What Failed?

A pure retrieval-augmentation approach reduced fabrication but introduced awkward, disjointed phrasing, and an initial verification-and-regeneration loop was too slow for practical use, requiring a redesign of the constraint mechanism.

Technological Advancement

The team developed a constrained-generation approach combining structured retrieval with inline consistency checks during generation, producing new technical understanding of how to balance factual grounding against output quality for this data structure.

Potentially Relevant SR&ED Activities

  • Systematic testing of retrieval-augmented generation configurations
  • Development and testing of output-constraint and verification mechanisms
  • Iterative measurement of factual consistency versus fluency trade-offs

What Would Generally Not Qualify

Standard prompt-engineering adjustments to an unmodified third-party model, without addressing an underlying technical constraint, would generally not qualify on their own.

Documentation

Annotated test results tracking factual consistency across iterations, technical notes on failed constraint approaches, and architecture decision records would support this claim.

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About The Author

Dale Doering

Dale Doering is the owner of SRED Consultants Inc., helping businesses navigate the complexities of Scientific Research and Experimental Development (SR&ED) claims. With a strong understanding of the technical and interpretive requirements of the SR&ED program, Dale works with companies to identify eligible projects, document technological challenges, and clearly demonstrate the systematic experimentation or analysis undertaken to achieve advancement. His approach focuses on translating complex technical work into well-supported SR&ED claims, helping clients maximize eligible opportunities while maintaining a clear understanding of the program’s requirements.

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Frequently Asked Questions

What technological uncertainty did the company face in this project?

The company needed to determine whether a combination of retrieval grounding, output constraints, and fine-tuning could achieve high factual consistency with structured source data without degrading the fluency of the generated technical documentation.

Standard fine-tuning and prompt engineering led to outputs that were fluent but factually inaccurate. Additionally, a pure retrieval-augmentation approach resulted in awkward, disjointed phrasing, while an early verification-and-regeneration loop was too slow for practical, real-world deployment.

The engineering team systematically tested multiple retrieval-augmented generation (RAG) configurations, structured-output constraint methods, and post-generation verification techniques, measuring consistency and fluency trade-offs against a manually annotated test set.

The team developed a novel constrained-generation approach that integrates structured retrieval with inline consistency checks during generation, providing new technical insights on how to balance factual grounding with text quality for structured engineering data.

Standard prompt-engineering adjustments or basic configuration tweaks applied to an unmodified, third-party model without resolving an underlying technical uncertainty or constraint would generally not qualify.

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