Firm excluded from Polish road tender after submitting AI-generated bid citing fake legal cases

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Notes from Poland is run by a small editorial team and is published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

A construction firm has been excluded from a public tender for road maintenance in Poland after it was found to have used artificial intelligence (AI) to prepare its bid. The AI-generated text included references to legal cases that do not actually exist.

The company in question, Exdrog, submitted the lowest bid, worth 15.5 million zloty (€3.66 million), in a tender for maintenance of a section of roads in Małopolska, one of Poland’s 16 provinces.

Rival bidders challenged the decision to award Exdrog the contract, alleging that the firm’s explanation for its low price cited fake tax rulings generated by AI, reports the Puls Biznesu daily. A common problem with AI is that it “hallucinates”, meaning generating false information and presenting it as fact.

“We demonstrated that the contractor…used artificial intelligence to develop explanations for the abnormally low price,” said Jarosław Sroka, a partner at law firm BSJP, representing competitor Mika. “It cited non-existent, never-issued tax rulings that allegedly concerned similar cases.”

The National Appeal Chamber (KIO), a state body charged with hearing appeals relating to public procurement, agreed and ordered the Provincial Roads Authority to re-examine the bids, excluding Exdrog’s offer.

“The allegations in the appeal, indicating that the contractor, Exdrog, used artificial intelligence in submitting its extensive, 280-page explanations and, as a result, provided false information, have been confirmed,” KIO spokeswoman Agnieszka Trojanowska told Puls Biznesu.

“The chamber found that the contractor failed to verify the information generated by artificial intelligence and, as a result, misled the contracting authority,” she continued, adding that this was the result of an oversight rather than a deliberate act by Exdrog.

However, the firm itself questioned that claim. Its CEO, Krystian Barczyk, told Puls Biznesu that “the [KIO] ruling did not provide detailed information on the reasons for the rejection. Nor was there any mention of the use of artificial intelligence”.

“When submitting its bids in various procedures, [Exdrog] always exercises due diligence”, using only “permitted assistance”, he added.

Barczyk claimed that his firm’s bid had in fact been “rejected due to an abnormally low price” and said it may still appeal the KIO ruling after receiving full written justification.

The case has sparked debate over how AI should be regulated in public procurement. Barbara Dzieciuchowicz, president of the National Chamber of Commerce for Roads (OIGD), said that, in some cases, using AI may raise rather than reduce operating costs.

“To use AI effectively, you must be smart and carefully verify the information it produces,” she said, quoted by Puls Biznesu, adding that this verification process can be as time-consuming as preparing the documentation manually.

Poland has the European Union’s second-lowest use of AI tools by companies, according to Eurostat data. The government last year announced major investments in AI to boost its use. A recent international study found that Polish is the best language for carrying out complex AI tasks.

Notes from Poland is run by a small editorial team and published by an independent, non-profit foundation that is funded through donations from our readers. We cannot do what we do without your support.

Main image credit: Matheus Bertelli/Pexels

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.