PPN 02/24 – AI in Public Sector Procurement

The introduction of artificial intelligence has led to stimulating conversations around creating efficiencies and driving productivity. In 2023, a joint study conducted by MIT’s school of management and major consultancy BCG found that generative AI can boost performance and productivity by up to 40% when used correctly.

Last July, we published our thoughts on the burgeoning topic of AI in bid and tender writing, authored by our Technical Director Matthew Walker. In this blog, we look at how PPN 02/24 will improve transparency regarding the use, how this will impact the tender process and how these align with our approach to using and working with artificial intelligence.

What is covered in the PPN?

The Cabinet Office acknowledges that various AI tools and systems will inevitably be embraced as part of the procurement process by suppliers and buyers alike. Importantly, the PPN is unequivocal in declaring AI is not prohibited from the central government’s tender process in any way, shape or form. However, a thorough understanding of the risks and appropriate mitigation measures should be in place to ensure its proper and appropriate usage.

The PPN also lists a number of effects the use of AI is likely to have as part of the procurement process, with examples including:

• An increase in overall bidding activity due to suppliers utilising AI to streamline processes for tender submissions
• Longer evaluation timetables to make allowances for due diligence in evaluating the increased volume of responses
• Additional post-tender clarifications to establish the credibility of bids from suppliers, including requests for documentation to eliminate any uncertainty or ambiguity
• Increased number of site visits and supplier presentations to validate and verify bids which have been prepared using AI.

To summarise, the PPN recognises the use of AI, and large language models will be integrated into existing bid processes, while creating stronger due diligence processes and allowing more time for evaluation committees to verify the tender is awarded to the correct bidder.

How will public sector bidding change?

The PPN also offers guidance to contracting authorities to establish whether AI has been used to prepare the tender submission. This comprises several example disclosure questions which may be introduced as part of the tender process:

Example Disclosure Question 1

• “Have you used AI or machine learning tools, including large language models to assist in any part of your tender submission? Where AI tools have been used to support the generation of tender responses, please confirm they have been checked and verified for accuracy.”

Example Disclosure Question 2

• “Please detail any instances where AI or machine learning tools, including large language models have been used to generate written content or otherwise support your bid submission.”

It is important to note the example disclosure questions are for information only and will not discriminate or otherwise impact the evaluation criteria for the submission. The guidance also serves as a warning to bidders using AI, by advising that although it can be used to improve efficiency in the bid writing process, this comes with the associated risk of ‘hallucination’: AI-generated content which is not thoroughly checked for accuracy could run the risk of misleading or partially incorrect content. If this is discovered during the more robust post-tender clarification process authorities are implementing, your tender could be disqualified, or worse – you may be placed on the public debarment list and banned from tendering for a certain period of time.

How this aligns with our approach

Ultimately, the new PPN and associated guidance from the Cabinet Office aligns with our official stance on the use of AI in bid writing, formally established by Matthew last year. In accordance with our honest, transparent approach to supporting clients with tender submissions, we have always been candid about the uses and limitations of using AI as part of a submission.

Impact of AI on bidding

Whilst AI can streamline bid processes and ‘raise the floor’ to allow bidders to achieve acceptable responses, they are naturally constrained. The response will be generic and at best compliant, but is unlikely to produce a winning submission without intervention from a skilled and experienced bid professional. This underscores the importance of writing bespoke content, tailored to the opportunity, contract specification and needs of the authority – in addition to your organisation’s own unique offerings and ‘win themes.’

Risk and limitations

As with any generic content, trained and competent evaluators will be able to quickly identify responses which have been produced by an AI or a large language model. Without significant alterations, an AI submission is unlikely to meet evaluator’s expectations and lead to contract award. Equally, a generic response which is simply ‘copied and pasted’ from an AI tool could bear notable similarity, in terms of both style and content, to a response used by another bidder – running the risk of being accused of collusion or having your submission rejected altogether.

Tool for research

Extensive research by our own team has determined, quite conclusively, that AI-generated responses are simply not the same standard as a skilled, experienced bid and tender writer. However, it can be used as a very effective research tool, offering additional ideas for potential commitments, presentation of methods and offerings which may not otherwise have been considered.

Consequently, our bid and tender writing team have been trained to integrate AI as a supplementary tool to support proactive research and idea generation but with our primary approach always remaining effective communication with our clients to understand their specific plans for delivering the tendered-for service in the specific context of their local area, their organisation and their proposed service model. Appropriate control measures are in place to ensure AI-generated content is never part of a submission and sensitive or confidential information is never inputted into a large language model or chatbot.

Supporting you with bid submissions

If you would like to find out more about how we can support you with an upcoming bid through bid and tender writing or tender review services, or more about the bid writing training courses we have on offer, our sales and marketing team are available for a free, no-obligation quotation today at info@executivecompass.co.uk or 0800 612 5563.