Procurement in a Nutshell – Procurement Act 2023: The Use of AI in Public Procurement
30th May, 2025
This Nutshell evaluates how contracting authorities can effectively manage the utilisation of artificial intelligence (AI) in public procurement processes.
How to effectively control the use of AI when conducting a procurement
The use of AI in public procurement has the potential to streamline bid evaluation, due diligence, and risk scoring by identifying patterns in supplier data and promoting consistency in how an award criteria is applied.
However, the reliance on AI, specifically in relation to scoring, can raise concerns regarding procedural fairness. AI software can also inadvertently replicate or amplify biases. This may result in the unfair exclusion of suppliers, particularly SMEs.
In order to mitigate the risks associated with AI, contracting authorities should explicitly disclose any use of AI in the procurement lifecycle.
Contracting authorities should document the operation and rationale of any AI tool utilised, to uphold the principle of accountability and ensure that suppliers have access to meaningful explanations where AI influences the outcome of a procurement.
It is also essential that human oversight remains integral to the decision-making process. AI can support, but not replace, critical judgements by qualified procurement evaluators.
In short, contracting authorities must:
- Clearly identify the use of AI in procurement documentation;
- maintain human oversight over automated decisions;
- retain detailed records about the functionality, integration, and governance of AI systems; and
- carry out appropriate impact assessments to evaluate legal and operational risks.
How to evaluate AI-generated tenders
For suppliers, AI can draft tender responses more quickly and at a lower cost by analysing tender documentation and identifying relevant requirements.
However, reliance on AI when producing tenders could result in the inclusion of inaccurate or misleading information. Additionally, overreliance on AI could distort a supplier’s true capability, making it difficult for authorities to assess whether they have the capacity and expertise to deliver the contract.
To address these concerns, contracting authorities should specifically request the disclosure of AI by suppliers, and where AI has been utilised, conduct additional due diligence such as site visits to ensure that responses are accurate.
What does this mean?
Contracting authorities seeking to capitalise on AI when conducting a procurement should:
- Review and update procurement policies and templates to incorporate AI disclosure requirements for both contracting authorities and suppliers;
- implement governance frameworks for the approval, oversight, and auditing of AI tools used in procurement processes;
- engage with suppliers early, particularly where AI tools are likely to be used in market engagement or tender evaluation;
- conduct thorough due diligence on AI-generated tenders; and
- maintain clear records of AI deployment, including decision rationale, human oversight mechanisms, and mitigation of bias.
By embedding transparency and accountability into the use of AI, contracting authorities can build trust with suppliers, ensure fairness in competition, and strengthen public confidence in the integrity of procurement decisions.
For further information please contact Melanie Pears or Tim Care in our Public Sector Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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