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HUD Acquisition Instruction 26-02: New AI Contract Clauses and Requirements

HUD has released Acquisition Instruction 26-02, introducing new agency-specific contract clauses for all future procurements involving artificial intelligence (AI). - Applies to acquisitions of AI systems, services, tools, models, and related data-driven capabilities - New clauses address: - Privacy, intellectual property, and government data use (AS-2602) - AI use transparency (AS-2603) - Vendor lock-in protections (AS-2604) - Ongoing testing and monitoring (AS-2605) - High-impact AI requirements (AS-2606) - Clauses will be included in all relevant HUD solicitations and contracts above the micro-purchase threshold - Requirements may also be added to existing contracts via modification - No specific vendors, OEMs, products, or quantities are identified in this notice - Contractors must comply with new requirements for privacy, transparency, monitoring, and safeguards for high-impact AI - No direct commercial opportunity is announced, but future HUD AI procurements will be subject to these clauses

Description

The U.S. Department of Housing and Urban Development (HUD), Office of the Chief Procurement Officer (OCPO), announces the issuance of Acquisition Instruction 26‑02 (AI 26-02): Acquisition of Artificial Intelligence. This instruction implements requirements in support of Executive Order 13960, which directs Federal agencies to employ safe, secure, and trustworthy artificial intelligence (AI) to enhance government efficiency and mission performance. Executive Order 14319 and OMB Memoranda M-26-04 direct Federal agencies to ensure AI models procured by the Federal Government have been developed to meet the two Unbiased AI Principles of being truth-seeking and ideologically neutral AI models, and direct agencies to ensure any solicitation or procurement of an AI model is compliant with the Unbiased AI principles and any existing contracts for AI models should be modified to include the requirements for meeting the Unbiased AI principles

To advance these directives, HUD OCPO has established five Agency‑Specific (AS) Clauses applicable to acquisitions involving AI systems, services, tools, models, or related data‑driven capabilities. These clauses will be incorporated into applicable solicitations and contracts above the micro purchase threshold to ensure responsible, transparent, and secure AI development and deployment across HUD programs.

New Agency‑Specific Clauses

AS‑2602 – Privacy, IP, and Government Data Use Requirements — Defines requirements for privacy protections, intellectual property rights, and appropriate use, access, and retention of government data in AI‑enabled solutions. Directs contractors to comply with HUD requirements governing ownership and use of Government data and intellectual property developed or used in contract performance. 

AS‑2603 – AI Use Transparency Requirements — Requires disclosure of AI system use, model characteristics, training data sources, and explainability features to support transparency and accountability. Directs contractors to disclose all use of AI in the products or services they deliver or use in performance of the contract. 

AS‑2604 – Vendor Lock‑In Protections — Ensures portability, interoperability, and continuity of operations by preventing undue vendor dependency in AI solutions. Directs contractors to implement safeguards to ensure long-term agency control over systems, data, and AI Systems, AI Services, and AI models (collectively, AI Systems).

AS‑2605 – Ongoing Testing and Monitoring Requirements for AI System — Establishes continuous evaluation, performance monitoring, and risk‑mitigation obligations for AI systems throughout the contract lifecycle. Directs contractors to support regular monitoring and evaluation of AI System(s) or AI Service(s) (collectively AI Systems) throughout the AI System’s lifecycle to ensure the continued performance, accuracy, effectiveness, and trustworthiness of the AI System(s).   

AS‑2606 – High‑Impact AI Requirements — Applies heightened safeguards, documentation, and oversight for AI systems designated as high‑impact due to their potential effect on individuals, programs, or mission outcomes. Directs contractors to comply with all applicable federal and agency risk mitigation requirements for any AI system or service (collectively referred to as AI System) determined by the Government to be a High-Impact AI System.  

Contractors responding to HUD solicitations involving AI‑related capabilities should review these clauses carefully to ensure full compliance with all requirements. HUD will incorporate these clauses into new acquisitions and, as appropriate, into modifications of existing contracts.

Questions regarding AI 26‑02 or the associated Agency-Specific clauses should be directed to the contracting officer assigned to the applicable contract or solicitation.

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