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Procurement Policy Note 02/24: How should we be using AI in the public sector?

10 May 2024
In this article we discuss the recent PPN 02/24, which details the growing use of AI in procurement exercises and provides guidance as to how to safely and transparently use AI in the public sector. 


On 25 March 2024, the Cabinet Office published the Procurement Policy Note 02/24 ("PPN 02/24") detailing the increased use of artificial intelligence in the delivery of public procurement contracts and providing related guidance on such use.

The PPN 02/24 readily acknowledges the widespread growth and adoption of AI – particularly generative AI – and notes the associated benefits to suppliers using AI to expand their bids during procurement. However, whilst the use of AI is not prohibited, due regard must be had to the risks related to such use in this context. For example, where Large Language Models ("LLMs") fail to have full contextual understanding of the data they are being fed, the content created for procurements with their support may lead to inaccurate and ambiguous statements being made. LLMs are trained to predict a “statistically plausible” response but may be unable to identify any errors subsequently made.

Guidance on the use of AI in the public sector

There is a range of existing guidance available focused on understanding AI as a subject area and how to support the use of AI within public services. The PPN 02/24 summarises, and provides links to these existing best practice guides in its Annex A. See below an excerpted list of the guidance referred to for reference:

  • the Cabinet Office, Office for Artificial Intelligence (OAI) and the World Economic Forum (WEF) joint guidance providing a set of principles on how to purchase AI tech and tackle the challenges that may arise during procurement;
  • the Central Digital and Data Office (CDDO) internal guidance for use of AI and LLMs across the civil service;
  • CDDO guidance on Generative AI with a white paper setting out principles to guide and inform AI development in all sectors;
  • the OAI and Government Digital Service (GDS) guidance in partnership with The Alan Turing Institute on how to ensure projects are fair, transparent and unbiased; and
  • Equality and Human Rights Commission guidance on procuring, commissioning, building or adapting AI for the workplace or the services they provide.

Disclosure and transparency are at the forefront of managing the risks of AI within the public sector; asking suppliers to disclose the use of AI within their tender submissions can ensure awareness of potential risks during evaluation. Any resultant due diligence must be proportionate to the additional threat posed by the use of AI, and the Cabinet Office suggests site visits, clarification requests or supplier presentations to achieve this.

The PPN 02/24 suggests the incorporation of disclosure questions in the Invitation to Tender to be used as a way of extracting information, not to be scored or considered in tender evaluation, and provides examples of such questions in its Annex B. 

Assessing if AI is right for you

The PPN details more specific guides for use in assessing whether AI is 'right for you'. The GDS and OAI have published joint guidance on how to build and use AI in the public sector, with direction on assessing whether AI will help meet specific user needs, how the sector can best use AI and how to implement it in an ethical and safe way. Where an organisation decides to proceed with the use of AI, the PPN notes guidance published by the OAI containing advice on understanding to subsequently manage a project using AI.

Call to action

The PPN 02/24 is applicable to all central government departments, their executive agencies and non-departmental public bodies, and the note advises these 'In-Scope Organisations' to:

  • circulate this PPN within their organisation, particularly to those with a commercial, procurement and/or contract management role; and
  • note the provisions of this PPN.

It contains additional best practice guides to those detailed above and lists various training resources readily available through the Government Campus and Civil Service Learning.

Please get in touch with our procurement lawyers if it would be useful to discuss any of the issues raised in this article, or other matters related to public procurement

With assistance from Lily Maffei, who is a trainee in our Commercial Team.

Further Reading