Can Local Governments in Western Australia Use AI to Assess Tenders and Expressions of Interest?

Why It Matters

Improper AI reliance jeopardises legal compliance and can expose councils to costly litigation, making transparent governance essential for public procurement.

Key Takeaways

• AI can sort and summarize large EOI/RFT submissions for LGs
• Human oversight remains mandatory to meet procedural fairness and legal duties
• Disclosure of AI use in tender documents mitigates bias and liability risks
• Inaccurate AI outputs can trigger judicial review and claims from bidders
• LGs must retain records proving AI assisted but did not decide outcomes

Pulse Analysis

The push to digitise public procurement has led many Western Australian councils to pilot generative AI tools for tender assessment. These systems excel at ingesting voluminous expressions of interest, extracting key data points, and flagging inconsistencies that would otherwise require hours of manual review. By automating routine analysis, AI frees procurement officers to focus on strategic evaluation, potentially accelerating project timelines and reducing administrative costs.

However, the legal framework governing local government procurement imposes strict duties of procedural fairness, confidentiality, and unbiased decision‑making. AI outputs can be inaccurate, biased, or fabricated, and without rigorous human oversight they may breach the Local Government (Functions and General) Regulations 1996 and privacy statutes. Courts are likely to scrutinise any process that appears to delegate substantive judgment to an algorithm, opening the door to judicial review, claims of misleading conduct, and challenges based on lack of transparency.

To mitigate these risks, councils should embed clear AI disclosures in their tender documents, reserve the right to disregard algorithmic recommendations, and obtain bidder consent for limited data use. Selecting AI platforms that offer explainable outputs and retaining detailed logs of how the technology informed—rather than dictated—decisions are essential safeguards. By coupling AI efficiency with robust human governance, local governments can modernise procurement while preserving legal compliance and public trust.