Controversy Surrounds GSA's Granting of $1 Awards for AI Technologies

The General Services Administration (GSA) has been embroiled in a controversy surrounding the awards of schedule contracts to AI companies OpenAI, Anthropic, and Google. Ask Sage, a company that has submitted protests to the Government Accountability Office (GAO), raises concerns about potential violations of competition requirements and cybersecurity laws.

The protests allege that the contracts possibly violate FAR PART 11 by limiting agencies to specific AI providers' models. Furthermore, they claim that the awards may circumvent competition requirements and violate the Competition in Contracting Act.

One of the main concerns raised by legal expert Dan Schoeni is the lack of authorisation of at least one vendor under the cloud security programme known as FedRAMP. This is a significant issue as it questions the security measures in place for these AI tools.

OpenAI is pursuing FedRAMP certification, while Google has defended their agreement with GSA, stating that the offer provides a unified AI platform, not just a collection of tools. However, Anthropic has not confirmed whether access to their AI would cost more for agencies, adding to the concerns about pricing.

The typical cost for Google's Google Gemini platform is $35 per user, but GSA has negotiated the price point for governmentwide access to OpenAI and Anthropic for $1 and $0.47 for Google, respectively. Anthropic's spokesperson emphasized that they want to enable federal workers to fully harness AI capabilities to better serve the American people by removing cost barriers.

Ask Sage is also considering filing a protest with GAO over the award to Google. The protests also allege possible violations of commercial item pricing requirements under FAR Part 12.

In response to the protests, GAO has until Nov. 24 to decide on the cases. Meanwhile, the controversy continues to cast a shadow over the GSA's OneGov strategy, which awarded schedule contracts to OpenAI, Anthropic, and Google for access to their AI tools.

Anthropic stated that agencies needing API access can work with them through existing platforms like AWS Bedrock and Google Cloud. However, the lack of publicly available information on the specific General Services Administration (GSA) contract identification numbers assigned for contracts with these companies adds to the transparency concerns.

As the situation unfolds, it is crucial to ensure that the integrity of the contracting process is upheld, and that the best interests of the American people are served. The GAO's decision will play a significant role in addressing the concerns raised by Ask Sage and ensuring fair competition and adherence to cybersecurity laws and regulations.