GSA’s LLM Clause Sets Data-Use Rules; OMB Rescinds a Software Attestation Mandate and Sets 2030 Cryptography Targets

Key takeaways

GSA class deviation RGO-2026-01, signed January 15, 2026, includes GSAR 552.239-7001 (GSAR Deviation) (Sept 2026). The clause applies when the Government is procuring an LLM or similar system in which LLM functionality is a material feature and Government Data will be submitted directly to, or produced by, the LLM, with stated exceptions for qualifying internal tools and incidental or ancillary use.
The official clause text requires notice to the contracting officer within 72 hours after the contractor obtains actual knowledge of a material violation; prohibits using Government Data to train, fine-tune, or otherwise improve an LLM; retains Government ownership of Government Data and custom developments; and caps decommissioning-cost liability at 25 percent of the value of the affected task or delivery order when the Government terminates for cause after written notice and a failure to remediate.
Official GSA Refresh 34 Q&A restates when 552.239-7001 applies and states that GSA plans to issue Refresh 34 on November 12, 2026. The opened Q&A does not state a 90-day acceptance window.
OMB Memorandum M-26-05, January 23, 2026, rescinds M-22-18 and M-23-16. Agencies may choose to use the governmentwide Secure Software Development Attestation Form; they are no longer under that prior governmentwide mandate. They may also require a software bill of materials upon request.
OMB Memorandum M-26-04 directs agencies to include contractual requirements addressing the Unbiased AI Principles in LLM solicitations and orders issued after the memorandum, and to update procurement policies no later than March 11, 2026. The memorandum sunsets two years after issuance unless OMB provides otherwise.
Executive Order 14412 of June 22, 2026, directs the FAR Council, within 180 days of the order (December 19, 2026), to publish a proposed FAR rule requiring covered contractors to comply by December 31, 2030, with NIST FIPS, including FIPS that incorporate post-quantum cryptography algorithms. OMB Memorandum M-26-15 sets a December 31, 2030 objective for agencies’ prioritized migration of cryptographic systems they own or operate, and requires TLS 1.3 or a successor no later than January 2, 2030. That memorandum does not apply to national security systems.

Findings

GSA’s Senior Procurement Executive issued class deviation RGO-2026-01 on January 15, 2026. The official compiled text opened for this report includes clause GSAR 552.239-7001 (GSAR Deviation) (Sept 2026), Basic Safeguarding of Large Language Model systems. Paragraph (a) of the clause, and GSA’s official Refresh 34 Q&A, state that the clause applies only to the extent the Government is procuring an LLM or similar system where LLM functionality is a material feature and Government Data will be submitted directly to or produced by the LLM, with exceptions for qualifying internal contractor tools and incidental or ancillary functionality.

The clause takes precedence over conflicting contractor license terms for purposes of the order-of-precedence provision in FAR 52.212-4 or GSAR 552.212-4, as applicable. The contractor must use best efforts to conduct due diligence when selecting and overseeing subcontractors engaged in AI design, development, deployment, or operation and monitoring tasks described in NIST AI RMF 1.0, Appendix A, and must notify the contracting officer within 72 hours after obtaining actual knowledge of a material violation. Due diligence may be shown through flowdown, attestation supported where practicable by independently verifiable evidence, identification of openly accessible information for open-LLM components, best-effort documentation for open-weight models, or existing artifacts such as FedRAMP packages, SOC 2 reports, or ISO/IEC 27001 materials.

The Government retains ownership of Government Data and custom developments. The contractor receives only a limited, revocable license to use that data for performance, specified security telemetry, technical support, and other uses the contracting officer expressly authorizes. Training, fine-tuning, or otherwise improving an LLM — including a third-party model — with Government Data is a prohibited use, as is using that data for advertising, marketing, or other customers. Government Data generally must remain in agreed premises or FedRAMP-authorized services. The contractor must use reasonable efforts to design, train, and configure the LLM to prioritize accuracy, scientific inquiry, and objectivity, and to acknowledge uncertainty where information is incomplete or contradictory. If the contracting officer terminates the contract, task or delivery order, or BPA for cause for failure to remediate after specific written notice, the contractor is liable for reasonable decommissioning costs, not to exceed 25 percent of the value of the affected task or delivery order, and not including re-procurement or replacement-system development costs. Before discontinuing a model, the contractor must use reasonable efforts to provide concurrent access to a successor model for at least 30 calendar days for a major version and 15 calendar days for a minor version.

The official RGO PDF opened for this report is dated January 15, 2026, and the clause is marked “(Sept 2026).” This report does not state a separate October 19, 2026 effective date, because that date was not found in the official documents opened. GSA’s official Refresh 34 Q&A, opened as a GSA PDF, answers a question about 552.239-7001 and, separately, states: “We plan to issue on November 12, 2026,” in response to a question about Refresh 34 being delayed a week beyond November 6. The opened Q&A does not state a 90-day mass-modification acceptance window.

On the software-assurance side, OMB Memorandum M-26-05, “Adopting a Risk-based Approach to Software and Hardware Security,” January 23, 2026, rescinds M-22-18 and companion memorandum M-23-16. Agencies remain responsible for the security of software and hardware on their networks and must maintain a complete inventory and risk-based assurance policies. They may choose to use the governmentwide Secure Software Development Attestation Form developed under the rescinded policy, and they may adopt contractual terms requiring a current software bill of materials upon request. The governmentwide attestation mandate in the rescinded memoranda is no longer in force.

OMB Memorandum M-26-04, “Increasing Public Trust in Artificial Intelligence Through Unbiased AI Principles,” implements Executive Order 14319. It requires agencies to include contractual requirements addressing the Unbiased AI Principles (truth-seeking and ideological neutrality) in any solicitation or order for procurement of an LLM issued after the date of the memorandum, and to update procurement policies no later than March 11, 2026. Incidental contractor use of AI for the contractor’s own administration, when not directed or necessary to fulfill requirements, is outside the memorandum’s scope. The memorandum ceases to have force two years after issuance unless the OMB Director provides otherwise.

Cryptographic migration now has contractor-facing rulemaking on a dated calendar. Executive Order 14412 of June 22, 2026, “Securing the Nation Against Advanced Cryptographic Attacks,” directs the FAR Council, within 180 days of the order and in consultation with CISA and NIST, to publish a proposed rule amending the FAR to require covered contractors to comply by December 31, 2030, with NIST’s FIPS, including applicable FIPS that incorporate post-quantum cryptography algorithms. One hundred eighty days after June 22, 2026, is December 19, 2026. OMB Memorandum M-26-15, “Execution of the Migration to Post-Quantum Cryptography,” implements the same effort for agency-owned or agency-operated systems: agencies must execute a prioritized migration with the objective of mitigating as much quantum risk as feasible by December 31, 2030, and must support TLS 1.3 or a successor as soon as practicable, but not later than January 2, 2030. The memorandum does not apply to national security systems. It points agencies to CISA’s publication on product categories for technologies that use post-quantum cryptography standards when considering vendor and third-party software.

GAO report GAO-26-107859, April 2026, opened from an archived copy of the official gao.gov PDF, found that selected agencies were not prepared to share knowledge about AI acquisitions through GSA’s web-based repository because their policies did not require officials to collect lessons learned. GAO made four recommendations: that DoD, DHS, GSA, and VA update their policies to require officials to systematically collect lessons learned related to AI acquisitions.

What it means for contractors

Bid strategy

For GSA and orders that incorporate 552.239-7001, offerors should decide at proposal time whether LLM functionality is a material feature and whether Government Data will be submitted to or produced by the model. If it is, the bid must accept Government ownership of Government Data and custom developments, a ban on training or fine-tuning with that data, 72-hour material-violation notice, flowdown or alternative diligence for covered subcontractors, and the 25 percent decommissioning-cost cap on a for-cause termination after notice. License terms that claim broader data rights will yield to the clause. Incidental or purely internal tools may fall within the stated exceptions, but the official Q&A sends product-specific questions to the ordering activity.

Compliance cost

Where the clause applies, costs include data-segregation and localization in FedRAMP-authorized or agreed environments, audit logging that does not expose Government Data, model-deprecation overlap windows, and diligence artifacts for subcontractors on NIST AI RMF task categories. M-26-05 lowers the governmentwide floor on software attestations — the prior mandate is rescinded — but an agency can still demand the form or an SBOM by contract. M-26-04 adds Unbiased AI clause content for new LLM buys. The coming FAR PQC proposal, if published as EO 14412 directs, would create a December 31, 2030 compliance date for covered contractors on NIST FIPS, including post-quantum algorithms, which is a longer-cycle engineering cost, not a 2026 clause by itself.

Execution

Contractors already delivering LLMs that process Government Data should map current practices against the official clause: no training on Government Data, 72-hour notice procedures, and written responsibility for configurations the Government controls. Watch GSA’s planned November 12, 2026, Refresh 34 issuance for any mass-modification language that accompanies the official Q&A discussion of 552.239-7001. Track Federal Register publication of the FAR PQC proposed rule against the December 19, 2026, deadline in EO 14412.

Watch next

November 12, 2026: date GSA stated in official Refresh 34 Q&A that it plans to issue Refresh 34.
December 19, 2026: date that is 180 days after Executive Order 14412 (June 22, 2026), by which the FAR Council is directed to publish the proposed FAR rule on covered-contractor FIPS / post-quantum compliance.
January 2, 2030: deadline in OMB M-26-15 for agencies to support TLS 1.3 or a successor.
December 31, 2030: compliance date EO 14412 would have the proposed FAR rule require of covered contractors, and the objective date in M-26-15 for agencies’ prioritized post-quantum migration of systems they own or operate.

Sources

General Services Administration, GSAR Class Deviation RGO-2026-01, signed January 15, 2026, including GSAR 552.239-7001 (GSAR Deviation) (Sept 2026). gsa.gov, RGO-2026-01 PDF.
General Services Administration, official Multiple Award Schedule Refresh 34 Q&A, stating the planned November 12, 2026, issuance date and restating the applicability of GSAR 552.239-7001.
Office of Management and Budget, Memorandum M-26-05, “Adopting a Risk-based Approach to Software and Hardware Security,” January 23, 2026. whitehouse.gov (PDF).
Office of Management and Budget, Memorandum M-26-04, “Increasing Public Trust in Artificial Intelligence Through Unbiased AI Principles,” December 11, 2025. whitehouse.gov (PDF).
Executive Order 14412, “Securing the Nation Against Advanced Cryptographic Attacks,” June 22, 2026, 91 FR 38483 (June 25, 2026). Official FR text.
Office of Management and Budget, Memorandum M-26-15, “Execution of the Migration to Post-Quantum Cryptography,” June 24, 2026. whitehouse.gov (PDF).
U.S. Government Accountability Office, Artificial Intelligence Acquisitions: Agencies Should Collect and Apply Lessons Learned to Improve Future Procurements, GAO-26-107859, April 2026. Official URL: gao.gov/assets/gao-26-107859.pdf. Opened via the Internet Archive capture of that official URL.

← Back to AI & Advanced Tech