Transparency, not prohibition: how the first AI procurement note got it right
When PPN 02/24 landed in March 2024, generative AI was barely a year into public consciousness and plenty of institutions were reaching for bans. Procurement policy did something more interesting: it declined to panic. Suppliers could use AI to write bids, just as they had always been free to hire bid writers, and the buyer's job was to see clearly and verify properly. Eighteen months on, with the note republished for the new procurement regime, that early call looks right, and the organisations still struggling are mostly the ones that ignored one half of it.
A permissive note in a nervous moment
The easiest thing to write in March 2024 would have been a prohibition. Tender portals were filling with suspiciously fluent responses, and evaluators wanted permission to bin them. PPN 02/24 refused, for a reason that has aged well: the bid writer analogy. Suppliers have always bought help with bids. AI is cheaper help. The note even names the benefit, that AI lets suppliers bid for a greater number of public contracts, which for a government trying to widen its supply base is a feature, not a bug.
What the note asked for instead was visibility. Three example disclosure questions, information only, never scored: was AI used in this bid, was the output checked for accuracy, and does AI feature in the service being offered. The design is subtle. Because the questions carry no marks, honest suppliers are not punished for disclosure, and the buyer gets what it actually needs, which is a map of where verification effort should go.
What organisations got wrong anyway
The first mistake was scoring the unscoreable. Some teams treated AI disclosure as a quality signal, marking down bids that admitted machine assistance. That is exactly what the note prohibits: the questions are for information only, and discriminating against suppliers for AI use, or for their answers, is a challenge risk. Worse, it teaches the market to stop disclosing, which destroys the only visibility the regime creates.
The second mistake was reading the note as being about bid writing only. Its most forward-looking passage is about delivery: AI arriving inside ordinary services. The video conferencing example, where a routine purchase quietly includes generative AI transcription, is now everyday reality. The note's fix, contractual terms confirming service data is not used to train models without written agreement, is one line of drafting that an astonishing number of contracts still lack.
The third mistake was ignoring the operational warning. The note told buyers to expect more responses and more clarification questions and to allow more time. Teams that kept pre-AI timetables and evaluation resourcing have spent the period since discovering that verification takes longer than reading.
The note that stayed relevant
PPN 02/24 has since been republished for the Procurement Act 2023 era as PPN 017, with the newer note directing buyers back to 02/24 for procurements commenced before 24 February 2025. That means both notes are live in most procurement functions today, one for the old-regime pipeline and one for the new. The substance is the same; the discipline is knowing which procurement sits under which.
The durable lesson is the posture. Disclosure over prohibition, verification over trust, and due diligence proportionate to risk rather than uniform suspicion. Hallucination, the note's core warning, has not gone away: models still produce plausible falsehoods, and evaluators who verify claims rather than admire prose remain the control that matters. The first AI procurement note did not try to predict the technology. It fixed the behaviour, which is why it still works.
The takeaways
- PPN 02/24 still governs procurements commenced before 24 February 2025; its successor PPN 017 covers the rest.
- Disclosure questions are information only: never score them, never punish honesty.
- Write the training data protection into your terms before the tender goes out.
- Ask about AI in delivery, not just in bid writing.
- Resource evaluation for volume: cheaper bidding means more bids and more verification.
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