Improving Transparency of AI Use in Public Procurement – PPN 017 published

The Cabinet Office has released an updated Procurement Policy Notice on “Improving Transparency of AI use in Procurement” known as PPN 017.  PPN 017 is designed to set obligations and provide guidance for government departments and bodies to take steps to identify and manage risks and opportunities associated with AI adoption. 

Whilst there are no changes in policy in this update compared with the previous version (PPN 02/24), PPN 017 has been refreshed in line with the new Procurement Act 2024 and Procurement Regulations 2024 – which came into effect on 24 February 2025 – and contracting authorities must continue to apply applicable obligations. This article re-emphasises the key points to takeaway for contracting authorities.

What are the obligations on contracting authorities?

The PPN recognises that AI is a rapidly growing and evolving market which can assist suppliers when bidding for procurement contracts and providing the services being procured.  This includes accelerating and supporting decision-making processes, in particular through the use of large data sets.  The PPN stresses that it is essential that suppliers reach decisions with the support of AI systems and not in reliance on them.  Care should therefore be taken when understanding, using and managing AI systems, including assessing the outputs of large language models.

Contracting authorities are asked to:

• Require transparency by asking (within the Invitation To Tender documents (“ITT”)) suppliers that are using AI in the procurement process to disclose it;
• Set controls in place to ensure confidential or non-publicly available information is not used to train AI systems;
• Undertake due diligence on whether suppliers are able to fulfil the requirements of the procurement and to ensure the accuracy, robustness and credibility of bids through clarification questions or additional information requests;
• Expect greater volume of bids and clarification questions from suppliers as bid-writing is streamlined through the use of AI;
• Allow more time in the procurement process to deal with additional due diligence and volume of responses;
• Ensure closer alignment internally and so that the implications and benefits of AI use are better understood in relation to the services being procured;
• Preserve national security by ensuring proportionate risk mitigations are implemented where there are national security concerns with the use of AI; and
• Refer to existing guidance and best practice from various government sources.

What guidance is available?

The PPN contains a hyperlinked list of the guidance and best practice at Annex A such as guidelines for AI procurement and a guide to using AI in the public sector.

Annex B sets out examples of disclosure questions that contracting authorities may wish to include in their ITTs to help undertake due diligence and manage risk.  These are advised to be non-scored, information only questions as suppliers are not prohibited from using AI and suppliers should not be discriminated against by their use of AI and their responses to the disclosure questions.  However, contracting authorities can pose further questions about suppliers’ use of AI (including scored questions) where these are relevant to their requirements (and are compliant with procurement law). 

The full PPN 017 can be read here.

If you would like to discuss how current or future regulations impact what you do with AI, please contact Tom Whittaker, Brian Wong, Lucy Pegler, Martin Cook, Liz Smith or any other member in our Technology team.

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This article was written by Ryan Jenkins.