GSA Releases Final Language of AI Contract Clause

October 13, 2026

WHAT: The U.S. General Services Administration (GSA) has released the final language of the GSAR 552.239-7001 clause that is aimed at establishing comprehensive requirements for safeguarding government data within large language model (LLM) artificial intelligence (AI) systems that process such data. Our coverage of the drafts of the clause can be found here and here.

WHEN: The clause will become effective on October 19, 2026. GSA intends to include the clause as part of MAS Refresh 34 that is scheduled for November 6, 2026. GSA will hold a webinar on MAS Refresh 34 on October 26, 2026. Because the final clause will be issued as a class deviation, a formal rulemaking process will follow, including publication in the Federal Register.

WHAT IT MEANS FOR INDUSTRY: The final clause will apply to contracts where the Government is procuring an LLM, generative assistant, chatbot, agentic system, LLM-enabled document or productivity tool, or similar systems where LLM functionality is a material feature and Government Data is submitted to or produced by the LLM. The clause is self-deleting when LLM use is limited to a contractor’s internal systems, or LLM functionality of the product being acquired is not required, accessed by the Government, or used to process Government Data. The clause must be flowed down to subcontractors that perform AI design, AI development, AI deployment, or operation and monitoring tasks related to an LLM processing Government Data as part of the product or service being acquired. However, parts of the clause imposing requirements on the origin, ownership, jurisdiction, or foreign control of an Open-LLM component or Fully Open Model are not required flowdowns. When the clause applies, the contractor must (1) exercise best efforts to conduct due diligence when selecting and overseeing subcontractors; (2) notify the contracting officer within 72 hours of a material violation of the clause; (3) demonstrate compliance through flowdowns, subcontractor attestations, and documented due diligence efforts; and (4) provide guidance, documentation, and technical capability when meeting the clause’s requirements depends on how the LLM is configured and deployed.

In the final clause, GSA made notable changes to the definitions compared to the proposed language:

• The final clause expands the definition of Background Data to include proprietary content, reference materials, knowledge bases, or other intellectual property that “existed prior to, or was developed independently of” the relevant contract.
• The definition of Data Outputs has been revised to also exclude “technical system-level generated information” and “underlying Background Data and third-party proprietary data.”
• Fully Open Model is a new defined term meaning an LLM that has its model architecture, model parameters, training, validation, inference and data-processing code, and training, validation, and testing datasets publicly available for inspection.
• Government Usage Context is a new definition that means a record, or records in the aggregate, that exists because the Government used the LLM under the contract and reveals how the Government works or reasonably supports a material inference about the Government’s nonpublic activities, workloads, priorities, or methods.
• The definitions of LLM Developer, LLM Service Provider, LLM System Integrator, and LLM System Operator have been removed.
• Open-LLM Component is a new defined term meaning an LLM component that is free and open source software available in source code form and openly licensed for any party to use, study, modify, and redistribute consistent with the treatment of open source software in NIST SP 800-53, Rev. 5.
• Open-Weight Model is a new defined term meaning an LLM whose model parameters are publicly available, but corresponding training code and data are not.
• Subcontractor is a new defined term meaning any supplier, distributor, vendor, or firm that furnishes supplies or services to the prime contractor or another subcontractor in connection with the contract and processes, transmits, or handles Government Data.

In addition to changes in definitions, GSA made several noteworthy changes and clarifications to the requirements in the final clause:

• GSA clarified that when the clause applies, it takes precedence over any conflicting contractor policies, requirements, terms of service, click-wrap, browse-wrap, or other commercial agreements. However, the clause will not replace or modify FAR 52.212-4 or GSAR 552.212-4.
• GSA added a provision recognizing that a contractor’s performance may incorporate its pre-existing commercial products, proprietary technology, commercial services, or materials developed for use across multiple customers or service offerings and that nothing in the contract transfers ownership of such materials to the Government.
• The final clause allows authorized contractors, subcontractors, and subprocessors to receive and process Government Data to the extent necessary for performance in addition to LLM developers, system operations, system integrators, and service providers.
• The contractor’s license to Government Data and Custom Developments in the final clause allows for using de-identified, aggregated security telemetry for cybersecurity, cyber-defense related fraud prevention, and threat detection when the telemetry cannot be used to identify the Government or its users or reconstruct any data.
• The final clause clarifies that authorized personnel may only access Government Data on an operational need, specific-purpose, and time-bound basis, or at the Government’s direction. The contractor is required to log access and provide access information to the Government when requested.
• The final clause requires an LLM using intermediary processing to make a summary of the steps the LLM records that include any human-reviewer access to Government Data connected to the interaction.
• When a required capability is not commercially available at award, the clause requires the LLM Developer to use its best efforts to develop the capability on a timeline agreed with the contracting officer.
• The final clause adds that if model version depreciation is driven by a third-party commercial provider’s depreciation outside the contractor’s control, the contractor must notify the contracting officer within five business days of receiving notice and make best efforts to provide a successor model when available.
• The final clause simplifies the development and monitoring requirements of the LLM to require only reasonable efforts to design, train, and configure the LLM to respond to prompts seeking factual information or analysis, prioritize accuracy, scientific inquiry, and objectivity, and acknowledge uncertainty where reliable information is incomplete or contradictory.

Although GSA has considered industry feedback and made modifications to the AI clause, the clause will still impose significant compliance obligations where applicable. Therefore, contractors that intend to offer LLM systems or services to the Government and contractors that intend to use LLM systems during contract performance should closely review the final clause before its effective date to determine the compliance requirements it will create and how to meet those requirements.

Wiley’s Government Contracts and Privacy, Cyber, and Data Governance practices will continue to monitor and report on these issues. We counsel clients on AI compliance, risk management, and regulatory and policy approaches, and we engage with key government stakeholders in this quickly moving area. If you have any questions, please contact one of the authors listed on this alert.