federal, state, and local agencies can use to buy commercial products and services at pre-negotiated prices. Because such a wide range of government organizations purchase through the GSA rather than running their own procurements, requirements that begin as part of GSA contracts can shape how technology is deployed throughout the country. As a result, the Software &
Information Industry Association (SIIA) has warned that the clause could eventually serve as a template for broader Federal Acquisition Regulation (FAR) provisions or for policies adopted by other agencies, making the proposal equally important to companies outside the technology space. “Federal procurement terms are a leading indicator,” Bethany Abbate, director of AI policy with SIIA, explained. “What the government demands of vendors could reshape the contracts and product behavior those same vendors offer commercial customers tomorrow.” The initial draft prompted significant concern and advocacy from groups like SIIA, leading to a heavily revised draft submission in June. Abbate was happy to see several changes, such as the removal of both the blanket prohibition on foreign components and the Office of Management and Budget directive requiring compliance for AI systems. But she also cautioned that there are still key questions that need to be answered. “We are still concerned that several of the provisions go beyond safeguarding data and seek to impose requirements on AI systems more broadly,” she said.
Could Commonly Used Software Be Covered?
By updating the name of the clause in its revised draft to “Safeguarding Data within LLM AI Systems” rather than referring to AI systems at large, GSA has narrowed the scope of its clause, though perhaps not far enough. “The general consensus was that AI needs to
“What the government demands of vendors could reshape the contracts and product behavior those same vendors offer commercial customers tomorrow.”
— Bethany Abbate Director of AI Policy Software & Information Industry Association (SIIA)
be more clearly defined,” Abbate said, recalling a July listening session with GSA. “There are potential downstream implications that people are still concerned about there.” That concern is not just for
companies selling standalone chatbots or AI models. An operations team may use an enterprise resource planning (ERP) system that applies AI or machine learning to help forecast product demand and recommend inventory targets. A service provider may use sensor data with AI-based predictive maintenance tools to forecast equipment failures before they occur. In either case, they may not think of themselves as using an AI system. To them, it may just be a familiar ERP platform or equipment-monitoring service. But the reality is that AI is so embedded in today’s technology solutions that the government’s proposed contract terms have the potential to cover nearly every piece of software that a foodservice equipment and supplies distributor uses. “How regulators draw this line is going to determine how everyday software gets labeled, disclosed, and contractually treated,” Abbate said. “The vague definitions and the level of uncertainty about what counts as AI in your agreements — that would be an area to continue to pay attention to.”
Can Companies
Realistically Comply? The proposal introduces a framework based on “unbiased AI principles” that
aims to ensure the neutrality of LLMs used by the government, but what does “unbiased” mean under the clause? “That is the open question,” said Abbate. “The provision itself doesn’t include enough specificity for LLM developers to even ensure compliance with this concept of unbiased AI principles. LLM development is really complicated, and each model reflects different steps to improve reliability of information that’s generated in response to user queries.” Given that the proposed
consequences for noncompliance could be as severe as decommissioning the entire system, the concern is even more heightened. SIIA has asked GSA to use objective, recognized benchmarks, including standards developed by the National Institute of Standards and Technology and international standards organizations, rather than imposing unclear government-specific requirements.
BETHANY ABBATE DIRECTOR OF AI POLICY SOFTWARE & INFORMATION INDUSTRY ASSOCIATION (SIIA)
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