Last month, the General Services Administration (“GSA”) made headlines by offering federal agencies one year access to OpenAI’s ChatGPT Enterprise and Anthropic’s Claude for $1 per agency, and days later, a year’s access to Google’s Gemini for $0.47. GSA set these bargains as fast on-ramps under its OneGov Strategy buying initiative. The agency also launched USAi, a no-cost, secure environment for agencies to experiment with AI. GSA’s aim is clear: accelerating the federal government’s adoption of cutting-edge artificial intelligence while keeping costs negligible.
The Ask Sage Protest
On August 15, 2025, Ask Sage, Inc., an AI platform provider, filed a Government Accountability Office (“GAO”) protest challenging the OpenAI and Anthropic agreements, later expanding to Gemini’s as well. GAO lists the case, docketed under B-423827.1, as “Currently Open”, with a decision due November 24, 2025.
In short, Ask Sage argues that GSA’s AI agreements raise the following acquisition issues:
- Commercial price reasonableness rules under FAR Part 12: Commercial AI platforms typically cost $20–$35 per user per month. GSA’s $1 ($0.47 for Google’s Gemini platform) “teaser” pricing for federal agencies is allegedly inconsistent with commercial market norms, undermining price reasonableness.
- Competition in Contracting Act (“CICA”): Presenting rock-bottom first year prices without clear pricing for subsequent years could tilt the field and reduce meaningful competition later.
- Security authorizations: Some of the AI services offered lack required FedRAMP authorization and, in a few cases, do not meet Federal Information Security Modernization Act (“FISMA”) or International Traffic in Arms Regulations (“ITAR”) requirements. If true, this significantly limits use for agencies that regularly manage sensitive workloads.
- Procurement Structure: The AI contracts were executed through reseller Carahsoft instead of directly with the AI vendors, which Ask Sage contends undermines GSA’s own OneGov Strategy goals.
Ask Sage’s protest underscores tension in federal procurement to balance the government’s appetite for rapid modernization with the guardrails that protect fairness, competition, and security. For federal agencies, GSA’s AI bargain contracts offer a low-risk entry point into modernization through artificial intelligence. For vendors, however, they raise fundamental questions about fair pricing, compliance, and the long-term health of the government AI market. GAO’s decision on Ask Sage’s protest later this fall could reshape expectations for commercial item pricing, cloud security compliance, and how agencies engage with emerging technologies. GSA’s $1 (or less) AI deals will either become a model for fast-tracking innovation or a cautionary tale.
