Wilson Sonsini | New AI Terms and Conditions Coming Soon to GSA MAS Contracts

On March 6, 2026, the U.S. General Services Administration (GSA) posted a proposed clause setting forth terms and conditions for artificial intelligence (AI) under GSA multiple award schedule (MAS) contracts. The clause, General Services Acquisition Regulation (GSAR) GSAR 552.239-7001, Basic Safeguarding of Artificial Intelligence Systemsx, may impact contractors with GSA MAS contracts who not only sell AI to the federal government but also use AI during contract performance. GSA is asking for public comment on the proposed clause through March 20, 2026. After considering any public comments, GSA will modify MAS contracts and add the clause, and contractors will have 60 days to accept the modification. This alert provides an overview of some of the clause’s more notable requirements.

As an initial observation, the clause is to be included in GSA contracts “for Artificial Intelligence capabilities.” “Artificial Intelligence capabilities” is not defined, so it is unknown how many contracts will include this clause. A contract to buy AI software licenses would most certainly include the clause. But consider the GSA contractor that sells sensors to a government agency to collect and manage data. The contract does not require AI or its use, but the contractor licenses AI from a third party to help with data analytics and other data management services. It is unclear if such a contract would necessarily include the clause because there seems to be a question whether such a contract is “for Artificial Intelligence capabilities.” If the contract did include the clause, however, the contractor will need to ensure the third-party AI service provider complies with the clause.

This is because GSAR 552.239-7001 imposes obligations on the GSA contractor and any “Service Provider” it may use, which is “an entity that directly or indirectly provides, operates, or licenses an AI system but is not a party to the contract. Service Providers may or may not be subcontractors.” Specifically, “If the Contractor is providing or using as part of performance of this contract an AI System owned and/or operated by a Service Provider then the Contractor is responsible for the Service Provider’s adherence to this clause.”

To that end, one important requirement for both the contractor and Service Provider is the clause’s mandate that they “use only American AI Systems. The use of foreign AI systems in the performance of this contract, including any AI components manufactured, developed, or controlled by non-U.S. entities, is prohibited.” American AI systems are those “developed and produced in the United States.” Contractors will therefore need to verify their own AI and screen any AI Service Providers to know how and where they developed their AI before selling the AI or using it to perform a GSA contract.

Additionally, under the clause the Contractor will be giving the government an irrevocable, royalty-free, non-exclusive license to use the AI system “for any lawful Government purpose.” Any limitations on a “lawful Government purpose” in the use of the AI system that are in the contractor’s or Service Provider’s standard terms of service would likely be ineffective. The clause has an order of precedence provision that expressly states GSAR 552.239-7001 “controls” in the event of a conflict between the clause and any commercial terms and conditions of the contractor or Service Provider.

Contractors must make “commercial efforts” to ensure the AI systems delivered or used during the contract are consistent with “Unbiased AI Principles,” which are that:

1. The AI system must be truthful in responding to user prompts seeking factual information or analysis. The AI system must prioritize historical accuracy, scientific inquiry, and objectivity and must acknowledge uncertainty where reliable information is incomplete or contradictory.
2. The AI system must be a neutral, nonpartisan tool that does not manipulate responses in favor of ideological dogmas such as Diversity, Equity, Inclusion. The Contractor must not intentionally encode partisan or ideological judgments into the AI Systems Data Outputs.

How the government will evaluate whether the AI system meets these principles is not clear, but what is clear is that GSAR 552.239-7001 gives the government the right to assess the AI system “at any time using its own benchmarks” for bias, truthfulness, safety, and “unsolicited ideological content.” Moreover, the government’s right is to conduct “automated assessments,” and the contractor must therefore provide tools and interfaces so that the government can perform its assessments when it determines it appropriate to do so.

The clause also includes a disclosure obligation of all AI systems used in performance of the contract, and whether the AI system has been modified or configured to comply with any non-U.S. federal government or commercial compliance or regulatory framework. This disclosure must be made no later than 30 days after award of a GSA award. Contractors must report incidents that threaten information or information systems within 72 hours of discovery, ensure the government can implement human oversight, intervention, and traceability of the AI system, and create a system for the government to give formal feedback, request modifications to the AI system, and report operational concerns. Further, the contractor must document and provide to the government upon request the AI system’s decision-making process, compliance with the Unbiased AI Principles, privacy controls, how the contractor tests to detect and mitigate noncompliance with the Unbiased AI Principles, known biases, and “[a]ny other information” the government requires to monitor the AI system’s performance risks.

Importantly, the clause gives full ownership to the government to all government data and any custom developments. Neither the contractor nor its Service Providers receive any rights to the data or developments. Contractors and their Service Providers are specifically prohibited from using government data to train or improve their AI, inform marketing and sales strategies, or make other business decisions. They also must logically separate government data from all other non-government customers. This may require contractors to put mechanisms in place to ensure compliance. Government data would be information or content submitted by or for the government to the AI system (e.g., prompts, queries, and documents) as well as any responses to such submissions. Custom development includes configurations, modifications, and workflows developed specifically for the government.

Finally, GSAR 552.239-7001 appears designed to prevent vendor lock so that the government can take its data and custom developments and work with other contractors. The clause requires use of open and standard data formats and application programming interfaces, prohibits proprietary technologies or formats requiring additional licensing or vendor dependencies, and directs contractors to provide tools to export government data so that it can be ingested and reconstructed in a separate system.

As can be seen above, GSA MAS contractors that develop and sell AI, or use AI when delivering products and services, are going to have significant contractual obligations once GSAR 552.239-7001 is finalized and added to their contracts. Those who rely on third-party AI companies will have an additional responsibility of ensuring those third parties’ compliance with the clause’s terms and conditions. Contractors wishing to provide comment on GSAR 552.239-7001 can do so until March 20, 2026, at this link. In the meantime, they should review their own AI and/or that of their Service Providers for where it is developed, proprietary technologies, accessibility, decision-making processes, and potential biases. Compliance programs, policies, and diligence practices may also require updates. Indeed, GSAR 552.239-7001 suggests the government is interested in and will be involved with the AI it is buying and the AI used by its contractors.

Compliments of Wilson Sonsini – a member of the EACCNY