The New Zealand government spends roughly NZ$51.5 billion per yr – around 20% of GDP – for third-party goods, services and infrastructure. It's so much, but the cash spent is just as vital as the quantity.
Public procurement will not be nearly purchasing office supplies. Governments depend on it to construct bridges and hospitals, procure defense and medical supplies, provide essential services and buy all the things from cloud computing systems to renewable energy infrastructure.
These spending decisions shape on a regular basis life and influence social, economic and environmental outcomes. Choosing sustainable suppliers and materials could make an actual difference and help strengthen New Zealand's economy.
The latest Public Procurement Rules Now public bodies must take into consideration how their spending supports the New Zealand economy in a wide range of ways.
This may include creating social value, resembling creating local jobs or opportunities for Māori and Pasifika businesses. Or it might be environmental advantages, resembling reducing carbon emissions or selecting products designed for reuse and recycling.
But many procurement teams still struggle to show these goals into motion because they lack time, tools or expertise. Artificial intelligence (AI) could help change that.
By automating complex tasks and analyzing large amounts of information, AI can handle work that previously required weeks of human effort. With Public Service Minister Judith Collins Encouraging public bodies to make use of AI For productivity gains, it is probably going that this will even be prolonged to public procurement.
At the identical time, AI will not be a panacea. It poses unique risks and requires caution. Government institutions must protect the rights, safety, well-being and data protection of residents.
Big spend, big impact
If handled rigorously, AI could help shoppers use their purchasing power to make more sustainable decisions that profit New Zealanders. But a scarcity of transparency and concentrated market power of just a few large technology providers can result in algorithmic bias and unfair outcomes.
In ours current researchWe examined how AI can support sustainability throughout all the procurement lifecycle – and what challenges must be overcome.
Public procurement is a vital driver of the local and global economy. Unfortunately, it could actually also result in climate emissions. But emissions are only a part of the story.
Public purchasing also shapes social and economic outcomes: a single contract can create jobs, support local supply chains, or promote fair labor standards. This makes procurement a strong tool for economic and environmental sustainability.
With billions at stake, ensuring transparency, fairness and competition is important – and sophisticated. Adding sustainability makes it harder. Buyers now need to contemplate not only price and quality, but additionally emissions, labor practices and provide chain risks.
Yet sustainability data is usually buried in countless reports, making it difficult and time-consuming to evaluate. Many agencies simply lack the expertise or capability to translate sustainability ambitions into on a regular basis procurement decisions.
Where AI could make a difference
AI may help public buyers manage this complexity and drive sustainability goals across the procurement cycle, from planning and tendering to contract management and performance monitoring.
In the planning phase, AI can analyze past contracts to forecast demand and discover opportunities for greener, more efficient spending – for instance, replacing emissions-intensive vehicles with low-emission fleets.
During bidding, it could actually review sustainability certifications, flag suppliers with environmental or labor violations, and detect exaggerated environmental claims that require human review.
Once contracts are in place, AI can track suppliers’ performance in real time and alert authorities when sustainability goals – resembling emissions reductions or fair labor standards – are in danger.
A practical example is “Alice”, an AI system utilized in Brazil to observe public procurement. Alice scans contracts for irregularities and has reportedly saved greater than $1 million, showing how AI can improve each integrity and efficiency.
Marta Andhov, CC BY-NC-ND
Not a plug and play solution
Despite its promise, AI requires strong human oversight. Algorithmic bias poses a serious risk: systems based on incomplete or distorted data can increase inequalities, for instance by favoring large suppliers over small local corporations.
The Dutch Child support scandal Data uncovered in 2019 highlights the danger. An algorithm falsely reported 1000’s of families, a lot of them with immigrant backgrounds, for fraud. It had devastating personal consequences and led to the resignation of the federal government.
Transparency is one other challenge. Many AI tools work as “Black boxes“, making their decisions difficult to clarify or challenge. In public procurement, where accountability is key, this lack of visibility is unacceptable.
Finally, AI also has environmental costs. Training large models consumes enormous energy. Without greener computing, AI could undermine the very sustainability goals it seeks to advance.
AI has the potential to make public procurement smarter, fairer and more sustainable – but only whether it is used rigorously. The goal will not be to switch human judgment, but to enhance it.
When used responsibly, AI may help public clients make more informed decisions, monitor sustainability performance, and be sure that every public dollar delivers advantages for people, communities, and the planet.
