On November 9, 2023, Living-in.EU, in partnership with Adra-e, hosted a workshop to present and discuss the "Standard Clauses for the procurement of AI," a guidance tool developed by the Dutch law firm Pels Rijcken in collaboration with the European Commission Directorate General for Internal Market, Industry, Entrepreneurship, and SMEs (DG GROW). 

The Procurement Clauses of AI aim to define a set of contractual terms for AI systems that public authorities would like to purchase. These clauses help clarify the standards, obligations, and responsibilities of public authorities and AI suppliers. They indicate essential requirements for AI systems, such as risk and quality management systems, technical documentation, human oversight indications, compliance, and audit measures. 

The hybrid workshop allowed representatives from public authorities and industries, as well as SMEs, to explore the final version of the Clauses. This version has been revised based on the latest developments of the Artificial Intelligence Act and feedback collected by Living-in.EU through online consultations. 

Standard Clauses for the procurement of AI 

Jeroen Naves, a lawyer at the Dutch law firm Pels Rijcken, presented how the Clauses were drafted, their main purpose, and key features. Additional information about the Clauses has already been published on the Public Buyers platform (here) and on Living-in.EU website (here).

A noteworthy consideration is that the Procurement Clauses of AI reflect the obligations and propositions of the Artificial Intelligence Act, which is still under negotiations by EU institutions. Therefore, the Clauses adopt a "risk-based" approach, differentiating between "high-risk" and "non-high-risk" systems. Moreover, the Clauses will be further shaped according to the final version of the AI act, expected by 2024. 

Another important aspect to note is that, in comparison to the initial version of the Clauses, and thanks to feedback collected by Living-in.EU during online consultations, the current version also includes several annexes, allowing customized agreements between public authorities and suppliers. Furthermore, the final version of the Clauses introduces a new regime distinguishing between public organization datasets, supplier datasets, and third-party datasets. 

Focus Groups: Key Discussion Points 

The hybrid workshop enabled participants to delve into some of the features outlined in the Clauses. For instance, participants highlighted the challenges for SMEs in accessing public markets and the recurring issue of vendor lock-in. Therefore, these clauses should be promoted in a way that does not hinder collaboration between public authorities and AI suppliers but instead strengthens market dialogue between public authorities and SMEs. 

Another important reflection was made on the obligation for AI suppliers to provide a risk management system and to identify, estimate, and evaluate the risks of AI systems to health, safety, and fundamental rights. It is crucial to share responsibilities between suppliers and public authorities to ensure that potential risks are correctly monitored and tracked. 

Moreover, other reflections focused on the issue of data sharing and intellectual property rights of public authorities, suppliers, and third parties' datasets. The Clauses foresee exclusive and non-exclusive rights in the case of public organization datasets or supplier datasets. However, participants have highlighted the difficulty in clearly defining dataset ownership rights in the case of trained AI systems. Therefore, a case-by-case analysis would be required to clarify whether datasets will accrue to public organizations or third parties. 

Next Steps: Piloting the Clauses in Real Projects 

Anita Poort, Innovation and Procurement Policy Advisor at DG GROW, introduced the objective of the Procurement Clauses, future developments, and next steps. To scale up and pilot the Clauses, DG GROW is currently collaborating with the Joint Research Centre (JRC) on the "Public Sector Tech Watch", a knowledge hub managed by the European Commission. In this context, the JRC will develop a self-reporting tool where public authorities can provide feedback on the Clauses. 

Another relevant space to collect experiences and feedback on the Clauses is the Public Buyers Platform, aiming to support offline collaboration, encourage joint action and systematic collaboration on public procurement, and foster the exchange of market intelligence and knowledge. The Public Buyers Platform is already hosting a Community of Practice on Procurement of AI, aiming to support public buyers in procuring AI solutions that are trustworthy, fair, and secure. 

Living-in.EU will continue the cooperation on the Procurement Clauses of AI and will offer various opportunities to scale up this work, also within the legal and financial subgroup. 

Useful Resources  

• Public Buyers Platform – Community on Procurement of AI – link here 

• Latest version of Procurement Clauses of AI - link here 

• Follow up from previous online workshops – link here 

• Slides and Recording are available for legal subgroup members here and financial subgroups  here 

For any further information about the session and how to access the recording and joining the Living-in.EU subgroups, please contact viviana.demonte@eurocities.eu