Missed Opportunity
Most conversations around AI in government center on adoption, governance and ethical use. Yet one of the most significant risks sits largely unaddressed: What happens when the AI vendor leaves the picture?
Vendors collapse. Startups are acquired. Models are sun-setted when they no longer generate profit. In each scenario, government leaders may suddenly find themselves dependent on a critical AI service that no longer exists, with no plan for data portability or continuity.
Traditional IT contracts often anticipate these risks, embedding source code escrow or service exit clauses. But in the fast-moving AI space, where excitement over innovation often overshadows operational foresight, these protections are frequently missing. The result? Agencies bet their mission continuity on the market’s stability, a gamble that experience shows is unreliable.
Why It Matters
Vendors can be fragile. Many of the most innovative AI solutions come from startups and small companies. These firms push boundaries but face high mortality rates. Federal procurement cycles can take years, far longer than the average startup runway.
Merger and acquisition turbulence. Even when vendors survive, acquisitions and mergers can radically alter service terms. A government-friendly vendor may be acquired by a company with different priorities, leading to abrupt pricing changes, reduced availability or discontinued support. Without exit rights, agencies are left scrambling.
Continuity gaps. The absence of contractual protections often traps agencies in “dead systems.” Data may be locked in proprietary formats. Models may be inaccessible outside the vendor’s infrastructure. This isn’t just an inconvenience. It can affect the mission, disrupt citizen services and erode public trust.
Executive Moves for the Next 90 Days
Leaders can take immediate steps to reduce exposure to vendor fragility and ensure AI continuity:
- Review contracts. Conduct a portfolio-wide audit of AI-related contracts. Identify which vendors do not include exit clauses, data portability requirements, or continuity safeguards.
- Add continuity language. Update templates and future contracts to explicitly require:
- Data export formats in open, machine-readable standards.
- Model escrow (where feasible), ensuring a copy of trained models can be secured in the event of vendor failure.
- Time-boxed transition support for knowledge transfer and continuity planning during offboarding.
- Pilot escrow. Move beyond theory. Select a pilot AI system, run a continuity drill and test the export and loading of data/models into a neutral repository. Just as continuity of operations (COOP) exercises validate facilities, these drills validate contractual safeguards.
- Engage consulting firms. Consulting partners can design “continuity by contract” toolkits, train contracting officers and create monitoring dashboards. They can also run tabletop scenarios where AI services fail, helping agencies identify gaps before crises strike.
Beyond COOP: Redefining Continuity
COOP planning has long been part of government playbooks, ensuring agencies can function during natural disasters, cyberattacks or facility outages. But continuity now must evolve. In the AI era, continuity isn’t just about buildings and servers, it’s about data, models and the contractual right to access them.
Exit rights and escrow are not optional luxuries. They are essential resilience enablers. Agencies that fail to integrate them risk losing not only access to AI systems but also the credibility to demonstrate accountability to boards, regulators, and the public.
The Consulting Imperative
Consulting firms are uniquely positioned to help agencies operationalize this shift. Service lines could include:
- AI continuity runbooks, offering step-by-step guidance for contract reviews and remediation.
- Escrow-as-a-service, partnering with neutral third parties to manage model and data escrow processes.
- Contracting officer training, building expertise in embedding AI continuity clauses into procurement.
- Scenario workshops, simulating vendor collapse or model sunset events to stress-test resilience.
By embedding continuity requirements early, consulting firms help agencies avoid costly retrofits later, and position themselves as trusted advisors in the crowded AI services marketplace.
Conclusion
The rush to deploy AI often leaves little room for asking hard questions about what happens next. But responsible innovation requires full lifecycle planning, not just for adoption, but for end-of-service as well.
Continuity by contract is the bridge between today’s AI excitement and tomorrow’s resilience. Agencies that demand exit rights, escrow, and transition planning will not only safeguard mission outcomes but also set the standard for accountable, sustainable use of AI in government.
In the end, exit rights aren’t “nice to have.” They are the new cornerstone of public trust in the AI era.
Dr. Rhonda Farrell is a transformation advisor with decades of experience driving impactful change and strategic growth for DoD, IC, Joint, and commercial agencies and organizations. She has a robust background in digital transformation, organizational development, and process improvement, offering a unique perspective that combines technical expertise with a deep understanding of business dynamics. As a strategy and innovation leader, she aligns with CIO, CTO, CDO, CISO, and Chief of Staff initiatives to identify strategic gaps, realign missions, and re-engineer organizations. Based in Baltimore and a proud US Marine Corps veteran, she brings a disciplined, resilient, and mission-focused approach to her work, enabling organizations to pivot and innovate successfully.
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