When Vendors Call Your Terms ‘Uncustomary,’ Keep Them

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A buyer wrote a test, kept the methodology, compelled the seller to build the interface that makes the test runnable, and attached a suspension remedy to failure. That instrument is GSAR 552.239-7001, and the first post in this pair reads what it measures and what it declines to price: The US Government’s AI Contract Clause Tests Everything but Value.

This post is about what happened next. The seller side answered in writing, in a public docket, and the answer is the move every buyer who writes a standard will eventually receive.

The Objection Names The Provision Precisely

On 4 August 2026 the Software and Information Industry Association published its comments on version two of the clause. Its own summary states that the comments “urge GSA to align the clause more closely with existing commercial norms, FAR frameworks, and NIST standards rather than creating new bespoke regulatory requirements, arguing that a one-size-fits-all approach risks discouraging commercial AI vendors from bringing their best solutions to government contracts.”

The same move had already been made against version one. In April the U.S. Chamber of Commerce filed a response identifying, among other things, “granting broad audit rights based on undisclosed Government benchmarks” as one of several provisions that “go well beyond commercial norms.”

The seller side found the exact provision that converts this clause from a compliance checklist into a measurement instrument, and objected to it on the grounds that it is uncommon.

The complaint is about who gets to set the test, and that is a question of jurisdiction.

Worth being precise about what was objected to, because the objection overstates it. Under paragraph (j)(2)(iv) of the June draft, the benchmarks were Government Data and the Government was under no obligation to disclose them, “with the exception of data or methodologies used as the basis for an adverse action.” As drafted, the instrument is confidential while it measures and disclosable the moment it is used against someone. A seller facing consequences gets to see the basis. What the seller does not get is the test in advance, and that is the difference between a standard and a specification.

Relocation, Not Refusal

Almost nobody in this docket refused to be measured, and that is easy to miss.

The request is to be measured somewhere else, by something else, against a standard assembled by a body the seller already participates in. Align with commercial norms. Align with existing frameworks. Align with the standards organizations where the industry sits at the table.

Each of those is a reasonable-sounding request and each does the same thing. It takes the definition of adequate performance out of the buyer’s hands and puts it into a process the seller helps run.

The exception proves the shape of the rule. Of the 79 stakeholders who filed before the deadline, one large vendor asked GSA to withdraw the clause entirely, and trade press noted that this position stood apart from the rest of the contracting industry. Outright refusal is the minority position. Most of the docket asked for relocation instead, and relocation is what costs a buyer its standard.

A buyer that accepts relocation keeps the appearance of a standard and loses the substance. It still has a document and a clause, but it has lost authorship, and a standard written by the party being measured ends up describing that party.

The Order Of Precedence Is The Whole Argument

Notice where the fight actually lands. Among the areas SIIA identifies as needing refinement is the order of precedence.

Order of precedence answers one question: when the buyer’s clause and the seller’s commercial agreement say different things, which paper wins. Every other disagreement in the docket is downstream of that answer. The draft settles it in the buyer’s favor, in paragraph (c): the clause “establishes specific requirements that take precedence over conflicting provisions in the Contractor’s policies, requirements, terms, conditions, or commercial agreements.” That is the only arrangement under which a buyer-written standard survives contact with a seller-written contract.

GSA has since issued the clause as a GSAR deviation, dated 28 September 2026 and effective 19 October 2026. On Crowell & Moring’s reading of the final text, GSA narrowed where the clause applies, replaced most of the “unbiased AI principles” language with a reasonable-efforts duty, and left the precedence rule in place: the clause still overrides the contractor’s commercial agreements. Industry got much of what it asked for on scope. On precedence it did not.

This is the most transferable finding in the file, and it costs nothing to apply. A buyer that writes a value standard and leaves the precedence question open has written something the seller’s paper can override.

What A Buyer Does With This

Expect the objection. Nothing customary provokes that much filing, so treat it as evidence the instrument reaches something.

Then hold three positions.

First, the methodology. Publish what is measured and why it matters. Do not publish how responses are weighed, and commit in advance to disclosing the basis whenever you act on it. A Request for Value that discloses its own weighting has commissioned the answer it will receive.

Second, precedence. Write the clause so that it governs the seller’s paper rather than negotiating with it, and settle that in the instrument rather than in the relationship.

Third, the definition. When the counterparty proposes an external standard, ask the only question that matters: does it measure whether the outcome funded actually arrived. Most do not. They measure conduct, documentation and control. Those are worth having and none of them is a return.

A vendor whose product does what it claims gives up nothing to a buyer-held test, and it comes away with a result the buyer cannot dismiss as the vendor’s own claim.

The seller side has told the market, in writing, what it does when a buyer sets its own terms: it rarely refuses, and it says the terms are not how things are normally done.

References: SIIA, “SIIA Comments to GSA on Proposed AI System Terms and Conditions,” 4 August 2026. U.S. Chamber of Commerce, “Industry Response to Proposed GSAR Clause 552.239-7001,” 3 April 2026. Comment volume and the withdrawal request: Nextgov/FCW, “Palantir calls on GSA to withdraw draft AI acquisition rule,” 6 August 2026. GSAR 552.239-7001 draft clause text, Federal Register 17 June 2026, FR Doc. 2026-12205. Final clause: GSA, RGO-2026-01 (GSAR deviations, section 539.71); Crowell & Moring, “GSA Issues Final Rule on Large Language Model Procurements,” 2 October 2026.

Keep reading: ACT III · Chapter 15: The Value Lattice System