GSA Introduces New Provision and Clause on Supply Chain Risk Monitoring
WHAT: As part of the Revolutionary General Services Administration Manual/Regulation (GSAM/R) overhaul, the U.S. General Services Administration (GSA) has introduced a new provision, GSAR 552.540-70, and a new clause, GSAR 552.540-71, to formalize its current supply chain risk management (SCRM) practices and ensure greater consistency and transparency. The provision and clause reflect GSA’s practice of evaluating supply chain risks both pre- and post-award and are designed to strengthen the integrity and security of purchased products, services, and solutions.
GSAR 552.540-70, Notice of Evaluation of Supply Chain Risk, provides that the “Government may consider supply chain risk information” during the evaluation process and that “[u]nacceptable supply chain risks may be grounds to remove an offeror from consideration.” Supply chain risk information is defined in FAR 41.101 and includes information such as functionality and features, user environment, foreign control or influence, implications to government missions or assets, national security, homeland security, or critical functions, vulnerability of federal systems, programs, or facilities, market alternatives, and the potential impact or harm caused by the possible loss, damage, or compromise of the article.
GSAR 552.540-71, Supply Chain Risk Monitoring, informs contractors of supply chain risk information monitoring throughout performance and the Government’s ability to take corrective action in response to identified supply chain risks that cannot be reasonably mitigated. Potential corrective action includes removal of the product, service, or solution from the contract, not extending contract performance, canceling the contract, or termination. The contract clause also uses the definition of supply chain risk information found in FAR 41.101.
The full text of GSAR 552.540-70 and GSAR 552.540-71 can be found here. GSA’s announcement also included an FAQ discussing how it identifies supply chain risk (investigations, information sharing, audits, disclosures), providing examples of types of supply chain risks (physical, personnel, geopolitical, foreign ownership and control), and describing the process if a supply chain risk is identified (notice, mitigation, corrective action).
WHEN: GSA announced the provision and clause on July 21, 2026, as part of Wave 3 of its GSAM/R overhaul. According to the one-pager included with the announcement, the provision and clause will be actively included in forthcoming Federal Supply Schedule (FSS) refreshes and contract modifications.
WHAT IT MEANS FOR INDUSTRY: The introduction of GSAR 552.540-70 and GSAR 552.540-71 formalizes GSA’s practice of monitoring supply chain risks during the solicitation process and contract performance. Offerors should carefully review solicitations for the inclusion of GSAR 552.540-70, as the provision allows the Government to eliminate an offeror from consideration for supply chain risks even where supply chain risk is not a stated evaluation criterion. Contractors that have GSAR 552.540-71 added to their contracts should review their supply chains for potential risks that could trigger corrective action and consider disclosing any potential risks to the Government, along with a proposed mitigation plan for the identified risks.
