The General Services Administration (GSA) on Oct. 19 put into effect a new acquisition clause governing agency contracts for large language model (LLM) artificial intelligence (AI) systems that process government data.
The General Services Acquisition Regulation (GSAR) class deviation applies to new GSA solicitations issued on or after the effective date and resulting contracts. Contracting officers may also incorporate the changes into earlier solicitations or existing contracts. GSA said formal rulemaking will follow, including a public notice-and-comment period.
The clause covers commercial products and services when LLM functionality is a material feature and government data will be submitted directly to or produced by the system. It generally does not apply when a contractor uses an LLM solely for internal back-office work or when AI functionality is incidental to the product or service.
The clause requires contractors to exercise best efforts to conduct due diligence on subcontractors involved in designing, developing, deploying, or operating covered LLM systems. They must also flow applicable requirements down to entities handling government data as part of those systems, subject to specified exceptions.
The clause also addresses foreign government influence over LLM systems. Contractors must maximize the use of systems developed, managed, and operated in the United States and protected against foreign government control or compelled disclosure of government data. They must also disclose, following due diligence, whether a covered LLM has been modified or configured at the request of a foreign government or to comply with foreign government requirements.
The clause adds requirements for government oversight of model operations. The clause states, “The LLM shall provide the Government commercially reasonable means to implement human oversight, intervention, and traceability for the contracted use case.”
When a system uses intermediary processing such as reasoning, retrieval, or agentic steps, it must make a summary of the steps it records available through the user interface, where one is provided, as well as a documented application programming interface (API) and an administrative audit trail available through that API. The clause specifies that the requirement covers a summary of recorded steps, not an explanation of the model’s internal reasoning.
The clause also requires contractors to notify the contracting officer within 72 hours after obtaining actual knowledge of a material violation of the clause. Security incidents affecting a covered LLM that may affect the confidentiality, integrity, or availability of government data must be reported as soon as possible, but no later than 72 hours after discovery, with daily status updates until resolution.
Contractors must safeguard government data against unauthorized access, disclosure, and use. The clause restricts where government data may be stored, processed, transmitted, or accessed, generally limiting those activities to agreed-upon premises or Federal Risk and Authorization Management Program authorized services unless the contracting officer provides written consent. Contractors must also logically segregate government data from other customers’ data and securely delete or destroy it when the contract ends, unless otherwise directed by the contracting officer.
The clause says the government retains ownership of government data and custom developments created specifically for the government, while contractors retain ownership of underlying models and preexisting intellectual property. It prohibits contractors from using government data to train or improve models unless expressly authorized under the contract.
The update applies across GSA contracting activities and procurements. For Federal Supply Schedule contracts, GSA said implementation will occur through solicitation refreshes and mass modifications.