Balancing AI and human judgement in construction procurement

Suppliers and contracting authorities are struggling to harness the opportunities while avoiding the perils presented by the growing use of artificial intelligence in public sector construction procurement.

“Artificial intelligence can help us work faster and smarter, but over reliance risks undermining the safeguards we have in place to protect the public purse,” says Rob Peck, chief commercial officer at Procurement for Housing.

Those safeguards, set out in the Procurement Act 2023, ensure public money is spent transparently, fairly and in a way that delivers value for money.

The tender art of bid writing

Increasingly, contractors are using AI to support bid writing. This can save time and resources, but if AI-generated bids are not checked properly they risk overselling and overcommitting, leaving companies unable to meet their contractual obligations.

Meanwhile, procurement teams are faced with more generic, template-perfect and sometimes unsubstantiated responses. They have to spend extra time differentiating bids, spotting AI embellishment and drilling deep into claims.

“There’s also a real risk that many suppliers score very highly on quality, pushing competitions into a price-only race that rarely delivers good outcomes,” warns Peck, adding that human judgement and context are critical.

Feedback requires a human touch

After a contract is awarded, contracting authorities send feedback to unsuccessful building firms outlining what they scored and why. Writing these letters is time-consuming and it’s tempting to use automated tools, but human understanding and oversight are essential. Any error in these letters could increase exposure to challenge.

Use AI wisely

With expert oversight and controls, AI can deliver benefits in the procurement process. It can act as a drafting assistant, shaping early requirements, proposing structure and identifying key elements, such as the accreditations a supplier must have, before a technical expert writes the full specification.

It can be trained to sense-check bid assessments and offer letters, providing an impartial view on whether scores and feedback are fair based on tender criteria, weighting and supplier responses.

AI can also reduce the administrative burden associated with ongoing contract management. Teams managing large volumes of spend data, particularly for building materials, can automate data classification and analysis, enabling rapid identification of off-contract purchasing and instances where higher-priced alternatives are being used.

Return to the source

AI can help people navigate procurement procedures, but they should always ask it to provide sources and links to back up what it’s saying. The government produced a procurement policy notice last year and the Local Government Association released a guide to responsibly buying AI.

Striking the right balance between automation and human judgement requires ongoing awareness of the opportunities, risks and governance.