GSA Delays Rollout of AI Procurement Terms and Conditions
The U.S. General Services Administration (GSA) has recently announced a delay in the rollout of its proposed terms and conditions governing the procurement and use of artificial intelligence (AI) systems and services. This decision is aimed at allowing more time for industry stakeholders to provide feedback.
Overview of Proposed Terms
The proposed AI procurement clause includes several significant provisions that are crucial for vendors offering AI systems through the GSA Schedule. Key elements of the proposed clause are:
- Intellectual Property Rights: The clause grants the Government ownership of data associated with AI, including any enhancements made to the systems.
- American AI Systems: It mandates that only AI components manufactured or developed by U.S. entities may be utilized, prohibiting any foreign AI elements.
- Government Data Handling: There are strict requirements for the use, handling, and processing of Government Data, necessitating adherence to “eyes off” data handling procedures and data localization.
- Data Portability: The clause emphasizes the use of open and standard data formats to prevent vendor lock-in.
- Incident Reporting: Contractors are required to report incidents within specified timeframes, enhancing accountability.
- Unbiased AI Systems: The clause requires that AI systems operate under unbiased principles, ensuring neutrality and compliance with federal guidelines.
Exclusions from the Proposed Clause
Notably, the current draft of the AI Clause does not reference vendors’ standard commercial terms and conditions, which are typically included in GSA Schedules. This omission raises questions about the integration of existing commercial license agreements within the new framework.
Timeline for Comments
The AI Clause was initially published on March 6, 2026, with a deadline for comments set for March 20. However, due to industry requests for additional time, GSA extended this deadline to April 3, 2026. The finalized clause will be incorporated into a new GSAR clause, labeled 552.239-7001, “Basic Safeguarding of Artificial Intelligence Systems.”
Implications for Industry
The GSA’s proposed AI Clause is part of a broader initiative guided by OMB Memo M-25-22, which aims to enhance the acquisition of AI in government. It establishes specific conditions for procuring AI systems, requiring the following:
- Covered AI Systems: The clause will apply to any solicitation or contract for AI capabilities, as defined in the Advancing American AI Act.
- American AI Requirement: The clause emphasizes the procurement of American-made AI systems, reinforcing the government’s policy to prioritize domestic products.
- Data Handling Restrictions: Contractors will face limitations on using Government Data, restricting its use to contract performance only.
- Incident Reporting: Compliance with reporting requirements is mandatory, ensuring that contractors maintain high standards of security and transparency.
Conclusion
The implementation of GSA’s proposed AI Clause will introduce substantial compliance requirements for contractors supplying AI systems to the government. Companies seeking to engage with the GSA Schedule must review the proposed terms closely and consider submitting feedback to influence the final provisions.
