Key takeaways
- At 11 federal agencies, reported AI use cases nearly doubled from 571 in 2023 to 1,110 in 2024, and generative AI use cases rose about ninefold, from 32 to 282.
- Common ways agencies buy AI: GSA OneGov agreements on MAS IT, GSA MAS SIN 518210C, GSA MAS SIN 54151S.
- Rules to plan for: OMB M-25-21, Accelerating Federal Use of AI, OMB M-25-22, Driving Efficient Acquisition of AI in Government, OMB M-26-04, Unbiased AI Principles (December 11, 2025).
- A contract vehicle or vendor registration makes buying easier, but it doesn't create demand. The vendors that win reach program owners before budgets and bids are set.
Who buys AI in government
Purchases of AI happen across federal agencies, states, counties, cities, school districts and colleges, hospitals, tribal governments, special districts and public utilities. The people you'll deal with usually include:
- Federal Chief AI Officers (required at agencies under OMB M-25-21) and agency AI governance boards
- Federal CIO/CTO offices and mission program managers
- State CIOs, state AI or innovation offices and state chief data officers
- County and city IT directors, innovation officers and department heads (311, permitting, benefits, public safety)
- K-12 technology directors and higher ed CIOs and provosts
- Contracting officers and purchasing agents, often with legal and privacy review
The purchasing office runs the process, but the program owner who has the problem usually decides what gets bought. Reach both. See government buyer roles for how they work together.
The government AI market
- At 11 federal agencies, reported AI use cases nearly doubled from 571 in 2023 to 1,110 in 2024, and generative AI use cases rose about ninefold, from 32 to 282. (GAO-25-107653, 'Artificial Intelligence: Generative AI Use and Management at Federal Agencies' (July 29, 2025))
- More than 1,000 AI bills were introduced in state legislatures in 2025, already double the 2024 total. (NCSL, 'Governments walk a fine line as use of AI expands' (August 19, 2025))
- In November 2025 GSA signed a direct OneGov agreement on MAS IT giving agencies Perplexity Enterprise Pro for Government for $0.25 per agency over 18 months. (GSA news release, 'GSA and Perplexity Sign First Direct to Government Deal' (November 19, 2025))
How agencies buy AI
Small purchases under an agency's threshold can often be made with a quote or a purchase card. Larger purchases need a formal bid or an existing contract. These are the contract vehicles agencies commonly use for AI:
| Contract vehicle | What it is |
|---|---|
| GSA OneGov agreements on MAS IT | GSA negotiates government-wide AI deals directly with technology companies (for example OpenAI, Anthropic and Perplexity) that agencies can order from the Multiple Award Schedule. |
| GSA MAS SIN 518210C - Cloud Computing and Cloud Related IT Professional Services | Used for AI delivered as a cloud service (SaaS/PaaS). GSA's list of cooperative-purchasing SINs shows no separate AI SIN. |
| GSA MAS SIN 54151S - Information Technology Professional Services | Used for AI consulting, integration, data and model development labor. Eligible for cooperative purchasing. |
| NASPO ValuePoint Cloud and Software Solutions | Multi-state cooperative contract for SaaS, IaaS and PaaS that took effect September 16, 2026 with 58 suppliers; a common route for state and local AI software. |
| NASA SEWP VI | Federal GWAC for IT products and services, including software, launched November 2026. |
Thresholds differ by state and agency; see our state procurement thresholds. For which cooperatives cover which categories, see cooperative contracts by category.
Rules and requirements for selling AI
| Requirement | What it means for you |
|---|---|
| OMB M-25-21, Accelerating Federal Use of AI | Requires agencies to have Chief AI Officers, track 'high-impact' AI that needs extra review, and maximize use of American AI, so vendors should expect questions about risk and where their AI comes from. |
| OMB M-25-22, Driving Efficient Acquisition of AI in Government | Tells agencies to buy American AI where possible, write clear requirements that avoid vendor lock-in, use performance-based contracting and protect government data. |
| OMB M-26-04, Unbiased AI Principles (December 11, 2025) | Federal contracts for large language models issued after December 11, 2025 must require 'truth-seeking' and 'ideological neutrality,' and vendors must provide an acceptable use policy, model or system cards, user guides and a way to report bad outputs. |
| FedRAMP (including 20x AI prioritization) | Cloud-based AI tools need FedRAMP before federal production use; FedRAMP 20x has an 'AI Prioritization' track that helped speed GSA's Perplexity deal. |
| Texas Responsible AI Governance Act (HB 149) | From January 1, 2026, Texas government agencies must tell people when they are dealing with an AI system and may not use AI for social scoring, so AI vendors selling to Texas agencies must support clear AI disclosures. |
Requirements vary by agency and contract. Read each solicitation's terms, and check with the buyer when in doubt. This isn't legal advice.
Buying signals to watch
These events often mean an agency will buy AI soon:
- An agency names a Chief AI Officer or publishes an AI strategy, AI policy or AI use case inventory
- A state passes an AI law or the governor issues an AI executive order that requires pilots or reviews
- The agency runs an AI pilot, hackathon or posts an RFI for generative AI or chatbots
- Call center backlogs, staff shortages or records-processing delays become public problems
- A government-wide deal (such as a GSA OneGov agreement) lowers the price of AI tools and agencies start rolling them out
For more, see our guide to government buying signals and the contract expirations guide.
A sales process for selling AI
- Register. Get into SAM.gov for federal work and each state or local vendor portal you'll sell into. Use our vendor registration checklist.
- Pick your path to purchase. Decide which contract vehicles above fit your target buyers, and whether a reseller or partner already holds one.
- Build the target list. Identify the agencies with the need, the budget and the buying authority, and the people who own the problem.
- Start conversations early. Reach program owners while budgets and requirements are still being written, not after an RFP is posted.
- Follow through to purchase. Help the buyer pick the method, whether a cooperative purchase, quote or formal bid. When a bid comes, use our RFP response guide.
How KSG helps you sell AI
Kensington Sales Group runs outbound sales development for companies selling to the public sector. Our SDRs research your target agencies, find the program owners and purchasing contacts, and book meetings for your sales team across Federal, SLED, K-12 and higher ed, healthcare, tribal, special district and utility markets. We also run bilingual English and Spanish outreach across the Western Hemisphere.
For example, we contacted 6,500 public-sector agencies for Dataminr's real-time alerting, generating hundreds of opportunities (read the case study).
See how our outsourced SDR service works.
Sources
- GAO-25-107653, 'Artificial Intelligence: Generative AI Use and Management at Federal Agencies' (July 29, 2025)
- NCSL, 'Governments walk a fine line as use of AI expands' (August 19, 2025)
- GSA news release, 'GSA and Perplexity Sign First Direct to Government Deal' (November 19, 2025)
- GSA MAS SIN 518210C - Cloud Computing and Cloud Related IT Professional Services
- GSA MAS SIN 54151S - Information Technology Professional Services
- NASPO ValuePoint Cloud and Software Solutions
- NASA SEWP VI
- OMB M-25-21, Accelerating Federal Use of AI
- OMB M-25-22, Driving Efficient Acquisition of AI in Government
- OMB M-26-04, Unbiased AI Principles (December 11, 2025)
- FedRAMP (including 20x AI prioritization)
- Texas Responsible AI Governance Act (HB 149)
Checked November 2, 2026.