A new General Services Administration contract clause for buying AI took effect on October 19, 2026. It is GSAR 552.239-7001, Basic Safeguarding of Data within Large Language Model Artificial Intelligence Systems. A large language model, or LLM, is the kind of AI behind chatbots and writing assistants.
GSA issued the clause on September 28 as a class deviation. That makes it policy before formal rulemaking. GSA says rulemaking with public comment will follow. Contracting officers could use the clause before the effective date and may add it to existing contracts at their discretion. It followed drafts in March and June and more than 75 public comments.
GSA’s own text sets when the clause applies. Contracting officers must include it when buying an LLM, generative assistant, chatbot, agentic system, LLM-enabled document or productivity tool, or similar system, where the LLM is a material feature and government data goes into it or comes out of it. Two exceptions: a contractor’s internal tools that the government never receives or uses, and AI that is incidental to a product whose main purpose is not AI.
The clause’s obligations, as reported by FedScoop and law firms that reviewed the final text:
- The contractor must notify the government within seven calendar days of a material change that increases output bias, weakens safety guardrails, or degrades performance or truthfulness.
- The government may suspend use of the LLM at any time and may run its own automated assessments.
- Obligations flow down to subcontractors that handle government data.
- The clause prevails over conflicting commercial terms, such as click-through licenses.
- An earlier “unbiased AI principles” standard is replaced by a duty to use reasonable efforts to prioritize accuracy and objectivity and to acknowledge uncertainty.
- Liability for decommissioning costs after a termination for cause is capped at 25 percent of the affected order.
The reach is wider than federal agencies. Eligible state and local governments can buy IT from GSA schedules. According to Wiley, GSA plans to add the clause to its Multiple Award Schedule in a refresh scheduled for November 6.
The seven-day change notice and the suspension right are the terms worth copying.
Why it matters
Standard software contracts assume the product at award is the product in use. LLM services do not hold still. Vendors update models, switch providers, and adjust guardrails. A change notice makes those shifts visible to the buyer. A suspension right gives the buyer a way to act on them.
The clause also gives buyers outside GSA a reference point. A state or local agency writing its own AI terms can borrow the scope test, the change notice, and the suspension right without waiting for its own rulemaking.
It is not settled law. A class deviation can be revised or rescinded, and the formal rule has no published schedule.
Questions for your next AI contract
- Does the contract say when its AI terms apply, in words a contracting officer can check?
- Must the vendor tell you when the model, provider, or guardrails change? How fast?
- Can you suspend use without first proving a breach?
- Do your terms override the vendor’s click-through terms?
- Do your obligations follow your data to subcontractors and model providers?
- What happens to your data and prompts when the contract ends?
The model will change after award. The contract should say who hears about it first.
Sources
- GSA memorandum RGO-2026-01 and GSAR deviation text, including 539.71 and 552.239-7001 (Acquisition.gov)
- GSA issued an AI acquisition policy for new contracts. Here’s what it says (FedScoop, Oct. 1, 2026)
- GSA Releases Final Language of AI Contract Clause (Wiley, Oct. 13, 2026)
- GSA Issues Final Rule on Large Language Model Procurements (Crowell & Moring)
- Highlights of the New GSA AI Clause (Vertosoft)