Kensington Sales Group
Selling to government

Selling AI to government.

Who buys AI, how agencies buy, the rules you'll need to meet and the signals that a purchase is coming, so you can reach buyers before the bid.

Updated November 2, 2026 · By Kensington Sales Group · 5-minute read

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

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 vehicleWhat it is
GSA OneGov agreements on MAS ITGSA 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 ServicesUsed 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 ServicesUsed for AI consulting, integration, data and model development labor. Eligible for cooperative purchasing.
NASPO ValuePoint Cloud and Software SolutionsMulti-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 VIFederal 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

RequirementWhat it means for you
OMB M-25-21, Accelerating Federal Use of AIRequires 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 GovernmentTells 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

  1. Register. Get into SAM.gov for federal work and each state or local vendor portal you'll sell into. Use our vendor registration checklist.
  2. Pick your path to purchase. Decide which contract vehicles above fit your target buyers, and whether a reseller or partner already holds one.
  3. Build the target list. Identify the agencies with the need, the budget and the buying authority, and the people who own the problem.
  4. Start conversations early. Reach program owners while budgets and requirements are still being written, not after an RFP is posted.
  5. 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

Checked November 2, 2026.

FAQ

Frequently asked questions

Is there a GSA Schedule SIN just for AI?
GSA's list of cooperative-purchasing SINs does not show a separate AI SIN. AI is usually sold under SIN 518210C (cloud) for AI software and SIN 54151S (IT professional services) for AI services.
What federal rules apply when selling AI to agencies?
OMB M-25-21 and M-25-22 (April 2025) govern how agencies use and buy AI, including a preference for American AI and avoiding vendor lock-in. OMB M-26-04 (December 2025) adds 'unbiased AI' contract terms and disclosure requirements for large language models.
Do state governments have their own AI rules?
Yes, and they are growing fast; NCSL reported more than 1,000 state AI bills introduced in 2025. For example, Texas HB 149 requires state agencies to disclose AI interactions starting January 1, 2026.
How fast is federal AI use growing?
GAO found AI use cases at 11 agencies nearly doubled from 571 in 2023 to 1,110 in 2024, with generative AI use cases rising from 32 to 282.
How long does it take to sell AI to government?
It depends on the size of the purchase and how it's bought. Small purchases under an agency's threshold, or buys through an existing cooperative contract, can move quickly. Purchases that need a formal bid or a new budget line usually take longer, often a full budget cycle.
Can KSG help us sell AI to government?
Yes. Kensington Sales Group provides outsourced SDRs who research target agencies, reach the right program owners and purchasing contacts, and book qualified meetings for your sales team. Book a 30-minute call to talk it through.

Ready to build your public-sector pipeline?

Book a 30-minute call. We'll talk through your market, your ideal buyers and whether an embedded sales development team is the right fit, with no commitment.