Procurement penalties for AI errors

Updated: 2026.01.07 22D ago 3 sources
Governments can write contracts that require disclosure of AI use and impose refunds or other penalties when AI‑generated hallucinations taint deliverables. This creates incentives for firms to apply rigorous verification and prevents unvetted AI text from entering official records. — It offers a concrete governance tool to align AI adoption with accountability in the public sector.

Sources

Utah Allows AI To Renew Medical Prescriptions
BeauHD 2026.01.07 86% relevant
Utah’s Doctronic agreement includes staged human review, safety‑escalation rules, and a one‑of‑a‑kind malpractice policy for the AI system — concrete risk‑allocation and contracting mechanisms the existing idea recommends (disclosures, refunds/penalties) for government procurement of AI medical tools.
UK Government's New Pension Portal Operator Tells Users To Wait for AI Before Complaining
msmash 2026.01.05 85% relevant
The article documents a government outsourcing failure where the contractor (Capita) asks users to delay complaints until promised AI chatbots arrive; that directly connects to the existing idea arguing governments should write contracts requiring AI disclosure and impose penalties when AI or vendor deliverables fail. The Capita case exemplifies why procurement clauses (disclosure, refunds, service‑level penalties, verifiable timelines) are necessary to prevent vendors from using 'AI will fix it later' as a shield against accountability.
Deloitte Issues Refund For Error-Ridden Australian Government Report That Used AI
msmash 2025.10.06 100% relevant
Deloitte will repay the final installment after admitting AI use and erroneous citations in an Australian government review.
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