The General Services Administration dropped a draft contract clause on March 6, 2026, that would fundamentally change how AI companies do business with the federal government. The proposal, titled GSAR 552.239-7001, introduces requirements around data rights, licensing, incident reporting, and sourcing that read less like typical procurement language and more like a regulatory overhaul.
If this clause survives the comment period and gets finalized, it would grant the US government an irrevocable, royalty-free license to use any AI system developed under the contract for any lawful purpose.
What the clause actually requires
The proposed regulation targets AI systems procured or used under GSA Multiple Award Schedule contracts.
First, sourcing. Contractors would be mandated to use only US-developed AI systems, with foreign components explicitly prohibited. This applies to the full supply chain, meaning downstream service providers and subcontractors would also need to comply.
