Government guidance urges procurement pros to be on lookout for use of AI in contract bids

A Cabinet Office policy note warns commercial teams that new risks may include leaks of confidential information and a need to examine the ‘accuracy, robustness and credibility of suppliers’ tenders’

Government procurement professionals have been advised to ensure they are conducting sufficient due diligence to mitigate the potential commercial and security risks of suppliers using artificial intelligence during bidding processes.

A new procurement policy note has been issued by the Cabinet Office to reflect that, for government commercial activities, “care should be taken to ensure that AI is used appropriately, and with due regard to risks and opportunities”.

The guidance is issued into a market where “there are potential benefits to suppliers using AI to develop their bids… [and] it is important to note that [this] is not prohibited during the commercial process”, the document says.

Procurement chiefs must thus make an effort “to understand the risks associated with the use of AI tools in this context”.

These risks may include bidders using sensitive commercial information to help train AI models, or providing this kind of restricted data to a generative system to help it write a bid. Buyers are encouraged to implement “proportionate controls” to ensure such information leaks do not happen.

Additional “due diligence may [also] be required to ensure suppliers have the appropriate capacity and capability to fulfil the requirements of the contract” in instances where an AI system may have helped to write a bid.

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“[This] due diligence should help to establish the accuracy, robustness and credibility of suppliers’ tenders through the use of clarifications or requesting additional supporting documentation – in the same way contracting authorities would approach any uncertainty or ambiguity in tenders,” the guidance adds.

To support these extra controls, the policy note provides templates of additional questions government bodies may wish to ask providers to establish whether and where they have used AI during bidding processes.

The guidelines further advise that there may be “certain procurements where there are national security concerns in relation to use of AI by suppliers, [where] there may be additional considerations and risk mitigations that are required”.

The note says: “In such instances, commercial teams should engage with their information assurance and security colleagues – before launching the procurement – to ensure proportionate risk mitigations are implemented.”

Throughout buying processes, commercial teams are advised to expect “a general increase in activity” as use of AI grows. This may include a possible need to “allow more time in the procurement to allow for due diligence and an increase in volumes of responses”, as well as additional efforts to ensure “closer alignment with internal customers and delivery teams to bring greater expertise on the implications and benefits of AI, relative to the subject matter of the contract”.

Sam Trendall

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