Initial Input on GSA’s Artificial Intelligence Clause
On July 14, the Coalition for Common Sense in Government Procurement (Coalition) participated in a public listening session concerning the General Services Administration’s (GSA) proposed Artificial Intelligence (AI) clause for the Multiple Award Schedule (MAS) program. Here is the statement, based on initial member input, that the Coalition provided at the listening session:
The Coalition is a nonprofit association of over 340 small, medium and large businesses selling commercial goods and services to the Federal Government, including through the MAS program. We have members that create, utilize, integrate and manage AI, as well as members that represent and advise clients on the interpretation of contract clauses.
The Coalition submitted extensive comments with respect to the initial draft AI clause and we commend GSA for accepting and considering industry input and deciding to take more time and receive additional input on this important, complex, cutting-edge topic. Collaboration between industry and Government is the best way to arrive at a solution that meets the needs of the Government without potentially depriving the Government of the best that the commercial market has to offer.
We would like to mention the following aspects of the clause that we believe require further attention:
We support GSA’s effort in paragraph (a) to limit applicability of the clause by stating that the clause does not apply when the Large Language Model (LLM) functionality is “incidental” to the primary purpose of the core requirement being procured or to LLMs embedded in common commercial products. However, the term “incidental” is undefined and subjective. We suggest further clarifying that LLM functionality is “incidental” when the contract does not require delivery of an AI-enabled capability and no Government-specified or Government-furnished AI tool is mandated as part of contract performance. Without such clarification, contracting officers could potentially insert the clause in contracts that involve the routine professional use of commercial AI tools, which is not GSA’s intent. The phrase “embedded in a common commercial product” also needs further clarification. The term “common commercial product” is undefined, and the examples given are limited to consumer tools. We suggest further clarification to confirm that this extends to enterprise software platforms with integrated AI capability. In addition, the term “embedded in” is unreasonably narrow. In practice, LLM functionality is integrated into commercial products through multiple technical architectures, including direct embedding, Application Programming Interface (API) calls, and third-party integrations. Thus, we suggest the phrase “used with or integrated into” instead of embedded. Finally, guidance should emphasize that the clause might not apply to every order under a contract, or to every discrete segregable task or line item under a contract.
In paragraph (d) we recommend amending the requirement to report “any” non-adherence to the clause. The requirement is overly broad and burdensome and is inconsistent with other clauses where contractors are not expected to report any non-compliance but instead report on mandatory disclosure requirement issues or cyber security incidents. An overly broad reporting requirement will result in overreporting trivial matters, which will waste industry and government time, increase costs, and distract the Government from focusing on meaningful, material issues. The clause already contains a 72-hour notification requirement for cyber incidents and a separate notice requirement where the LLM has been modified or configured to comply with non-US statutes, regulations, or policies. These and existing contractor disclosure requirements are sufficient to protect the Government’s interests.
With respect to the liability for decommissioning in paragraph (j), allowing the contracting officer to select a percentage of contract value is arbitrary and unnecessary. The clause already provides that the contractor is liable for reasonable decommissioning costs and there are existing well-established mechanisms for the government to recover costs associated with terminations for default. This potential for the imposition of costs that far exceed actual damages increases risk and will increase costs for the Government and ultimately American taxpayers.
The definition of “Data Outputs,” the assertion of full ownership over all Government Data including Data Outputs derived from Background Data, and the automatic assignment provision operate to transfer the contractor’s intellectual property rights in any output incorporating pre-existing Background Data. These provisions pose serious risks to contractor intellectual property and are inconsistent with the current data rights framework. Contractors should retain all pre-existing intellectual property rights including Background Data incorporated into or reflected in Data Outputs. The Government’s ownership interest should extend only to the novel content generated by the LLM or Government-originated content that does not derive from the contractor’s Background Data or pre-existing intellectual property.
The Coalition will be submitting written comments to the proposed rule on behalf of its members. We commend GSA for listening to industry feedback and thank GSA for providing us with the opportunity to speak today.
Secure Your Sponsorship for the Annual Golf Tournament!
We’re proud to offer a variety of sponsorship opportunities for the Joseph P. Caggiano Memorial Golf Tournament designed to fit every business and budget. Many sponsorship packages include golfer registrations, providing a unique opportunity to support two outstanding veteran-focused causes, increase your company’s visibility within the federal procurement community, and enjoy a day of networking and golf at one of the region’s most scenic courses.
Whether you’re looking for prominent event visibility, meaningful engagement with attendees, or a way to give back to our veteran community, there is a sponsorship opportunity to meet your goals.
View the sponsorship opportunities here.
If you have any questions, or are ready to secure your sponsorship for the annual golf tournament, please contact Heather Tarpley at htarpley@thecgp.org.
Thank you to our current sponsors!
DoW Pauses CMMC Phase II Rollout
The Department of War (DoW) has suspended Phase II requirements of the Cybersecurity Maturity Model Certification (CMMC) program, citing concerns that the costs associated with implementation could drive innovative companies out of the defense industrial base.
The DoW Chief Information Officer is establishing a CMMC Reform Task Force, which will deliver a report within 60 days outlining “realistic, scalable security measures that prioritize speed to capability and lower barriers” compared to the current CMMC framework. The task force’s recommendations will be informed in part by an ongoing Request for Information (RFI).
The Coalition is collecting comments in response to the RFI. Members interested in participating should email comments and/or their interest to Greg Waldron at gwaldron@thecgp.org by the end of the day on August 3. It remains unclear how significantly the task force’s recommendations may reshape the CMMC program.
The CMMC program is intended to ensure that defense contractors meet contractual requirements for protecting Controlled Unclassified Information (CUI) and Federal Contract Information (FCI). Under the October 2024 final rule establishing the CMMC program and the implementing DoW final rule, compliance is verified through a combination of self-assessments, Certified Third-Party Assessment Organization (C3PAO) assessments, and Defense Industrial Base Cybersecurity Assessment Center (DIBCAC) assessments. The rule established a phased implementation schedule, with each phase lasting one year.
Phase I, which primarily relies on self-assessments, began in November 2025. Phase II, originally scheduled to begin this November, would have expanded the use of C3PAO assessments for a much larger number of contractors.
During the review period, the DoW will continue enforcing compliance with NIST SP 800-171 Rev. 2 through self-assessments, and contractors remain obligated to comply with DFARS clause 252.204-7012. The Small Business Administration commended the DoW’s decision to suspend Phase II requirements, and the Department has published a new Frequently Asked Questions webpage providing additional guidance on the current status of the program.
The Coalition will continue to monitor and report on future CMMC developments.
GAO Highlights Priority Recommendations for GSA
The Government Accountability Office (GAO) has updated its list of priority recommendations for the General Services Administration (GSA), identifying 11 recommendations that warrant focused agency attention. Since GAO’s May 2025 review, GSA has implemented two recommendations, while one additional recommendation no longer carries a priority designation.
The updated priority recommendations focus on three key areas:
- Federal real property management
- Agency shared services
- Oversight of federal awards, including improvements to the Federal Audit Clearinghouse
According to GAO, implementing the remaining recommendations would strengthen GSA’s management of the federal real property portfolio, improve support for agencies adopting shared services, and enhance oversight of federal awards. Collectively, the recommendations are intended to improve the efficiency and effectiveness of GSA operations while strengthening accountability for federal spending.
GSA Announces Leadership Changes Across PBS and Regional Offices
Federal News Network reports that GSA has announced several leadership changes within the Public Buildings Service (PBS) and its regional offices as the agency continues implementing its reorganization to centralize operations and modernize federal real estate management.
Michael Gelber, previously Assistant Commissioner for Facility Management, has been named Acting PBS Commissioner, succeeding Andrew Heller. Heller will transition to the newly created role of Deputy Commissioner while GSA continues its search for a permanent commissioner.
The agency also announced new leadership for two regional offices. Larry Allen, former head of GSA’s Office of Governmentwide Policy, where he played a key role in the ongoing Federal Acquisition Regulation (FAR) overhaul, has been named Regional Administrator for GSA’s Southeast Region. Bob Ortiz, formerly with Cushman & Wakefield, has been appointed Regional Administrator for the Western Region, where he will support GSA’s efforts to consolidate its federal real estate portfolio and reduce its overall footprint.
CAS Board Finalizes GAAP Alignment Rule
The Office of Management and Budget’s (OMB) Cost Accounting Standards (CAS) Board has issued a final rule further aligning the Cost Accounting Standards with Generally Accepted Accounting Principles (GAAP). The rule rescinds CAS 408 (Accounting for Costs of Compensated Personal Absence) and 411 (Accounting for Acquisition Costs of Materials), removes most requirements from CAS 404 (Capitalization of Tangible Assets) and 409 (Depreciation of Tangible Capital Assets), and incorporates key provisions from CAS 404 and 409 into CAS 405 (Accounting for Unallowable Costs) to continue protecting the government’s interests. According to OMB, the changes reflect the significant convergence between CAS and GAAP, making many of the superseded requirements unnecessary for contract cost accounting and pricing.
OMB estimates the rule eliminates 68 of 72 individual CAS requirements, reducing compliance burdens and lowering barriers to entry for non-traditional contractors while maintaining appropriate oversight. The changes are intended to simplify CAS administration, increase competition in federal contracting, and further modernize the federal procurement system.
The final rule also includes a new provision at 48 C.F.R. § 9903.201-9(b) that exempts contractors from contract price and cost adjustments resulting solely from accounting changes made to comply with the rescission of CAS 408.
TMF Releases RFPs to Accelerate Permitting and Government AI Adoption
ExecutiveGov reports that the Technology Modernization Fund (TMF) has released two Requests for Proposals (RFP) that could have a wide impact on the federal ecosystem. The first RFP is entitled “Speeding and Scaling 21st-Century Permitting.” TMF is looking for shovel ready projects to support or update the federal government’s permitting technology. Projects may include:
- Data modernization to improve interoperability and information sharing;
- Modular core systems and legacy system integration or modernization;
- Middleware to improve workflow productivity across agencies; and
- Front-end tools that strengthen case management, transparency, and permitting timelines.
The Second RFP is entitled “Advancing American AI in Agencies.” It seeks projects that accelerate the implementation and usage of artificial intelligence (AI) tools across the federal government. TMF is looking for projects in the following three categories:
- Prepare: Build AI-ready data, infrastructure and translation layers;
- Pilot: Test emerging AI tools and governance approaches using federal-scale use cases; and
- Produce: Deploy and scale generative AI capabilities across agency operations.
Off the Shelf: An In-Depth Look at Interagency Contracting
Brian Friel, co-founder of BD Squared, joined Off the Shelf for a wide-ranging discussion on the current state of interagency contracting and the evolving federal procurement landscape.
The conversation explores the history of interagency contracting, including the creation of governmentwide acquisition contracts (GWACs) for information technology and the changing role of the Multiple Award Schedule (MAS) Program.
Friel also shares updates and insights on several major acquisition vehicles, including POLARIS, Alliant 3, and OASIS+, as well as the impact of the planned wind down of the National Institutes of Health’s interagency contracting program.
The episode also examines the National Aeronautics and Space Administration’s recently awarded SEWP VI contract, highlighting key policy developments affecting multiple-award indefinite delivery, indefinite quantity (IDIQ) contracts, before concluding with an update on the Army’s Marketplace for the Acquisition of Professional Services (MAPS) procurement.
Listen to the full episode here.
Senate Democrats Block $1.15 NDAA
The Hill reports that on Tuesday Senate Democrats defeated a motion to proceed to the $1.15 trillion annual defense authorization bill. Previously the legislation advanced out of committee following a bipartisan 18-9 vote but questions regarding the authorization for the conflict with Iran and a lack of consensus on top line defense and non-defense spending have created a legislative impasse. The legislation would provide $1.1 trillion to the DoW, $41 billion to the Department of Energy to manage the nation’s nuclear arsenal, and $11 billion to other defense-related activities. The legislation includes a 3.6 percent pay raise for troops and investments in education, housing, healthcare, and childcare for military families.
Late Is Late—Even When a Government Firewall Captures Your Proposal
By Evan Williams, Luke Levasseur & Nick Feldstern; Fox Rothschild
In Rick Aviation, Inc. v. United States, the Court of Federal Claims (COFC) tackled a novel application of the Federal Acquisition Regulation (FAR) “late is late” rule. The question the court squared up against is what happens when an otherwise timely bid or proposal is caught in a government firewall or email filter and does not reach the procuring agency’s email server?
According to COFC, unless the bid or proposal is received by the designated government office in the solicitation before an award is made, the “late is late” rule prevents the agency from accepting the bid or proposal. As the government continues to expand its implementation of cybersecurity controls and AI-supported processes, this issue may become a problem for a growing number of offerors.
COFC’s decision serves as a practical reminder that, absent certain narrow exceptions, the risk related to ultimate receipt by the procuring agency of an electronically submitted proposal remains largely on the offeror.
Below, we discuss the case and provide practical suggestions to help reduce this risk.
Rick Aviation, Inc. v. United States, No. 25-1604 (June 17, 2026)
In April 2025, the Defense Logistics Agency (DLA) issued a solicitation for the procurement of petroleum fuel products with a deadline of 1 p.m. on May 23, 2025. The solicitation advised contractors to ensure their offers were “sent with enough time to be processed through the server.” The solicitation also instructed offerors to submit their proposals via email to either the contracting officer or the designated DLA email address and warned that its email filtration system would scan for viruses and key words that could delay delivery of a bid.
On May 22, at 1:27 p.m., Rick Aviation, Inc. (RAI) emailed its proposal to the designated DLA email address and received an automated response stating that its proposal had been successfully delivered. One other competitor, Avfuel, also submitted a proposal.
DLA accepted Avfuel’s proposal and awarded it the contract on August 19, 2025. On September 23, 2025, RAI notified DLA that it intended to protest the award. After receiving RAI’s notice, the contracting officer informed RAI that the agency could not find RAI’s proposal in either potential email inbox. Unbeknownst to RAI or DLA, RAI’s email with its proposal had been quarantined by the Defense Information Systems Agency (DISA), a partner of DLA that provides information technology services, including email services, “due to error by the sender” related to the Sender Policy Framework (SPF) configuration authentication standard used by DISA. Because DISA’s email gateway blocked RAI’s email as a result of the SPF error, the proposal never reached DLA’s designated email inbox.
In September, the contracting officer concluded that because RAI’s proposal never arrived at the designated email address before award, it could not be considered under the “late is late” rule. RAI filed its complaint at COFC later that month, alleging that DLA’s rejection of its bid was arbitrary and capricious.
The Court denied RAI’s protest, explaining that under FAR 52.212-1(f)(2)(i) (Instructions to Offerors—Commercial Products and Commercial Services), an offer received at the government office designated in the solicitation after the exact time specified for receipt of offers is “late” and will not be considered unless:
(1) the proposal was received before award was made;
(2) the contracting officer determined that accepting the late offer would not unduly delay the acquisition; and
(3) one of the clause’s specific exceptions applies, including the “electronic commerce” exception (receipt at the “initial point of entry to the government infrastructure” no later than one day prior to the due date) or the “government-control” exception (acceptable evidence that the offer was received at the government installation designated for receipt and was under the government’s control before the time set for receipt of offers).
(For further discussion on the exceptions to the “late is late” rule, see our previous post.)
RAI’s proposal was not “received” at the government office designated in the solicitation before award. DISA is an intermediary agency that essentially provides email services to DLA. Although DISA and DLA are part of the same Department of War, receipt by DISA’s server did not satisfy the receipt-by-the-agency requirement. Instead, the Court determined DLA never “received” RAI’s proposal because DISA’s gateway blocked RAI’s email from arriving on DLA’s server.
Further, the Court ruled that the automated response RAI received indicating that its email had been delivered was not the same as confirmation that the email had been received. Notwithstanding RAI being lulled into a false sense of security by the delivery confirmation, the Court’s analysis ultimately turned on the fact that the CO in the office specified in the solicitation did not receive the proposal before the award was issued.
The Court recognized that its result may seem harsh and that “disputes like this one have arisen with disturbing frequency [and] painfully illustrate how FAR provisions enacted long ago conflict with modern technology.” Nevertheless, the FAR places the responsibility on offerors to ensure their proposals reach their intended destinations, and RAI could have followed up with the contracting officer to confirm receipt. Because RAI’s proposal was not “received” prior to award, a “late is late” exception could not apply.
The Court also rejected RAI’s assertion that DISA’s SPF configuration standard, which resulted in the quarantine of RAI’s proposal, constituted an unstated evaluation criterion. In short, the SPF configuration was a technical or procedural matter, not a substantive basis for evaluating proposals, and thus, it could not be considered an evaluation criterion.
Key Takeaways for Contractors
In an age of firewalls, encryption, and AI-assisted security, contractor personnel need to be certain they understand the technical details of the processes by which they communicate with the government—and how to ensure their communications successfully work their way through the electronic maze and are received by the intended recipient. Offerors bear full responsibility for ensuring their electronic submissions actually reach the designated inbox—including maintaining properly configured email authentication protocols. Indeed, the Court emphasized that the solicitation expressly warned offerors to verify receipt with the contracting officer, and RAI’s failure to do so proved fatal to its protest.
As the RAI decision makes clear, contractors should not treat their “sent items” email box or automated delivery response as conclusive proof that the agency received an offer. Instead, to mitigate the non-receipt risk, contractors should:
- Build into electronic submission plans sufficient time to verify receipt and resolve any delivery problems before the deadline.
- Request affirmative confirmation of receipt from the contracting officer or other receipt point(s) designated by the solicitation.
- When a solicitation warns that email filtering may delay delivery, follow up on receipt. Doing so can be the difference between a timely offer and an offer the agency cannot consider.
In sum, contractors are advised to submit proposals early, confirm receipt, and keep a record showing that the offer reached the right place before the deadline.
VA Discusses AI Use in Disability Claims Processing
FedScoop reports that the Department of Veterans Affairs (VA) discussed its use of artificial intelligence (AI) to support disability compensation claims processing during a recent hearing before the House Veterans’ Affairs Subcommittee on Technology Modernization.
According to VA officials, AI is being used to assist claims processors and improve efficiency while maintaining a “human in the loop,” with every disability claim continuing to be decided by a trained VA employee. The agency is leveraging AI as part of its broader efforts to reduce its disability claims backlog, with approximately 80 percent of its pending claims currently in the evidence-gathering phase.
During the hearing, Members of Congress and representatives from the Government Accountability Office (GAO) discussed the importance of appropriate governance, oversight, and workforce support as AI capabilities continue to expand across the agency. GAO also encouraged the VA to leverage its AI Accountability Framework to help guide future implementation.
The hearing highlighted the potential for AI to support veterans’ benefits processing while emphasizing the importance of maintaining human oversight and effective governance as these technologies continue to evolve.
All-Member Briefing with GAO on DoW’s Use of OTAs, July 21
Please join us for an all-member briefing on Other Transaction Authority (OTA)s featuring Tatiana Winger, Director of GAO’s Contracting and National Security Acquisitions team, and her colleagues on July 21 at 11:00 AM ET. The meeting will be held virtually.
On behalf of Congress, the Government Accountability Office (GAO) has looked into federal agencies’ use of OTAs, which are a type of contracting mechanism not subject to the Federal Acquisition Regulations (FAR). In recent years, OTAs have grown in use and importance in light of actions taken by the Executive Branch and Congress. In this webinar, Tatiana Winger and several of her colleagues from GAO’s Contracting and National Security Acquisitions team will provide an overview of OTAs and discuss the findings from their most recent report looking into DOD’s use of OTAs opportunities. This will include a discussion of recent data trends and insights into how programs are using OTAs to quickly deliver capability to the warfighter.
To register, click here. For any assistance with registration, please contact Mady Whiting at mady.whiting@thecgp.org
Note: This is a members-only event. If you see a message that says “Registration Not Available” please log in using your member account.
IT/Services Committee Meeting on The Future of MAS, July 22
The Coalition’s IT/Services Committee will be hosting a meeting with Giovanni Onwuchekwa, Executive Director of the Office of Multiple Awards Schedule on July 22 at 10:00 AM ET. Mr. Onwuchekwa will cover the future of MAS, the new organization of FAS, and GSA’s plans to standardize contracting officer training.
The meeting will be held on July 22 at 10:00 AM ET, in person at CGI Federal: 1000 N Glebe Road, Arlington, VA 22201. (9th floor Studio Space). Virtual attendance is also available.
To register, click here. For any assistance with registration, please contact Mady Whiting at mady.whiting@thecgp.org
Note: This is a members-only event. If you see a message that says “Registration Not Available” please log in using your member account.
General/Office Products Committee Meeting on GSA Schedule Pricing 2.0, July 29
Please join us for a meeting hosted by The Coalition’s General/Office Products Committee on July 29 from 10:00 -11:00 AM (ET).
Jack Tekus, Acting Principal Deputy Assistant Commissioner of GSA’s Office of Acquisition Solutions Development, will discuss the rollout of Pricing 2.0 and other Office of Mission Delivery initiatives.
The meeting will be held virtually.
To register, click here. For any assistance with registration, please contact Mady Whiting at mady.whiting@thecgp.org
Note: This is a members-only event. If you see a message that says “Registration Not Available” please log in using your member account.