GeoAI and the Law Newsletter
Tracking Developments in AI Laws and Regulations for Geospatial Professionals
GeoAI and the Law is not legal advice. The reader should consult with a trained lawyer on legal matters associated with GeoAI.
Deep Dive
California’s Executive Order N-5-26: A Case Study in Procurement-Driven AI Governance
On March 30, 2026, California Governor Gavin Newsom signed Executive Order N-5-26, aimed at shaping the responsible procurement and deployment of Generative AI across state government operations. The order builds on California’s earlier Executive Order N-12-23, issued in September 2023, which initiated the state’s efforts to safely learn, innovate, and use GenAI for the benefit of Californians and state workers.
The new executive order is notable for the mechanism it employs: rather than enacting new substantive legislation or promulgating traditional administrative regulations, it directs state agencies to embed AI safety and accountability standards directly into the state contracting and procurement process. The order explicitly recognizes that “public procurement represents one of the most powerful tools available to governments to shape market behavior and encourage responsible innovation”.
Specifically, the order directs the Department of General Services (DGS) and the Department of Technology (CDT) to submit recommendations for new certifications that may be incorporated into state contracting processes, requiring entities seeking to do business with California to attest to and explain their policies and safeguards to protect public safety. These certifications must address, among other things, the exploitation or distribution of illegal content, the utilization of models that display harmful bias or lack governance to reduce such bias, and the violation of civil rights and civil liberties including free speech, voting, human autonomy, and protections against unlawful discrimination, detention, and surveillance.
The order also directs the Government Operations Agency (GovOps) to recommend reforms to contractor responsibility provisions, including suspension and ineligibility authorities, to ensure state entities do not contract with companies judicially determined to have unlawfully undermined privacy or civil liberties. Additional provisions require state agencies to share best practices on responsible AI procurement, update the State Digital Strategy to leverage GenAI for transparency and accountability, and publish a data minimization toolkit with best practices, templates, special contract provisions, and program review checklists. The order further mandates that CDT issue best practice guidance for departments to appropriately watermark AI-generated or significantly manipulated images or video in accordance with California Business & Professional Code §§ 22757.2 & 22757.3.
For geospatial professionals, the watermarking and provenance requirements deserve special attention. As AI is increasingly used to generate or manipulate satellite imagery, aerial photography, and geospatial visualizations, the ability to distinguish between authentic and AI-generated or AI-altered spatial data will become a critical issue of professional practice and legal compliance.
The Contract, Not the Statute: How U.S. AI Law Is Being Shaped by Procurement and Contractual Terms
Perhaps the most important takeaway from California’s approach for geospatial professionals is what it reveals about the primary mechanism through which AI governance is taking shape in the United States. Unlike the European Union, which has enacted comprehensive AI legislation through the EU AI Act, the United States has not passed broad federal AI legislation. Nor has the federal government, particularly under the current administration, pursued an aggressive regulatory posture toward AI. The result is a governance vacuum that is increasingly being filled not by statutes or regulations, but by contractual terms.
California’s Executive Order N-5-26 is a leading example of this dynamic. The order does not create new enforceable legal rights or benefits. In fact, in a likely nod to the recent White House Executive Order intended to restrict state legal oversight of AI, it expressly states that it “is not intended to, and does not, create any rights or benefits, substantive or procedural, enforceable at law or in equity”. Instead, it works through the contracting power of the state. Companies that wish to sell AI products and services to California (the fifth-largest economy in the world) will need to meet certification, attestation, and safeguard requirements as a condition of doing business. In effect, the terms of procurement contracts, not statutes, become the binding rules governing AI safety, bias mitigation, data privacy, and civil liberties protection.
This procurement-driven model has several important implications for geospatial professionals. Specifically, it:
Means that the legal obligations governing your use and deployment of GeoAI tools may not be found in any statute or regulation at all, but rather in the terms and conditions of the contracts under which you procure or license those tools. Vendor agreements, service-level agreements, data-use licenses, and government procurement contracts are becoming the de facto regulatory instruments for AI in the United States.
Means that the landscape is inherently fragmented. Different government agencies, at the state and local level, may impose different procurement-based requirements. California’s approach, shaped by its status as home of many of the top AI companies may differ significantly from what other states require. Geospatial firms operating across multiple jurisdictions will need to track and comply with a patchwork of contractual obligations rather than a single, uniform regulatory framework.
Shifts the burden of due diligence onto the practitioner. In the absence of clear legislative standards, geospatial professionals must proactively evaluate the AI tools they use. This includes assessing whether those tools have been vetted for bias, whether the underlying training data implicates privacy concerns, whether outputs are appropriately watermarked or documented, and whether the contractual terms under which those tools are procured adequately allocate risk. The California order’s emphasis on data minimization toolkits and special contract provisions underscores this point.
Signals that procurement power, particularly the purchasing power of large state governments, is likely to be the most significant driver of AI standards in the near term. California’s CDT Chief Information Security Officer (CISO) is also empowered to review federal supply chain designations and federal procurement changes, and to issue guidance allowing state agencies to continue procuring from companies if the CISO concludes that a federal designation is improper. This creates a layer of state-level procurement oversight that may, in practice, set the floor for responsible AI standards in the geospatial industry and beyond.
What Geospatial Professionals Should Do Now
The rapid evolution of GeoAI governance through contractual and procurement mechanisms imposes additional requirements upon geospatial professionals. Practitioners should begin by auditing the contractual terms with vendors under which they procure or license AI-powered geospatial tools, paying particular attention to provisions related to data privacy, bias governance, output provenance, and civil liberties protections. Firms doing business with California or other state governments should anticipate new certification and attestation requirements and begin developing internal policies and documentation that demonstrate responsible AI practices. Finally, because the law in this space is being written in contracts rather than codified in statutes, geospatial professionals should consider engaging legal counsel experienced in both technology procurement and AI governance to ensure that as this landscape continues to evolve, their practices remain compliant.
Edited by Kevin Pomfret
Partner at Pierson Ferdinand, Author of Geospatial Law, Policy and Ethics: Where Geospatial Technology is Taking the Law | LinkedIn