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ARTICLE · 23 JUNE 2026

GSA Issues Proposed AI Contract Clause, Seeks Feedback

Crowell & Moring LLP
Crowell & Moring LLP
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The General Services Administration has released a revised contract clause governing how federal contractors must safeguard government data when using large language model AI systems...

United StatesGovernment, Public Sector
Matthew F. Ferraro
Matthew F. Ferraro
Rajeev Raghavan
Rajeev Raghavan
Jacob Harrison
Jacob Harrison

What You Need to Know

  • Key takeaway #1

    The proposed clause applies only when an LLM processes “Government Data,” with carve-outs for LLMs embedded in common commercial products and for incidental LLM use. It also requires prime contractors to flow down specific clause obligations to four newly defined supply-chain roles through four companion clauses, broadening the range of companies with compliance obligations.

  • Key takeaway #2

    The new clause replaces an original proposed prohibition on all AI components “manufactured, developed, or controlled by non-U.S. entities,” with a preference to maximize the use of LLMs developed, managed and operated by U.S.-incorporated entities.

  • Key takeaway #3

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