AI hallucinations sink road project bid

Poland's National Appeals Chamber has excluded a contractor's abnormally low bid for a road project after discovering its 280-page explanation contained AI-generated fabrications, including references to tax documents that don't exist

A Polish construction firm has been excluded from a road maintenance tender in the Małopolska region after its bid contained AI-generated references to nonexistent tax documents.

The National Appeals Chamber ruled that contractor Exdrog failed to verify its 280-page proposal, which competitors identified as containing AI “hallucinations”, instances where artificial intelligence fabricates plausible but false information.

According to the Warsaw Business Journal, rival bidders challenged Exdrog’s unusually low price and discovered the fabricated citations during appeals. The Chamber determined the errors were likely oversights rather than fraud, but still warranted disqualification for misleading authorities.

The case has sparked calls for regulation of AI in public procurement. Jan Styliński of the Polish Construction Employers’ Association said legal frameworks are urgently needed to define authorship, verification duties, and acceptable AI use in tenders.

Barbara Dzieciuchowicz of the National Chamber of Road Construction warned that unvalidated AI could increase risks and costs rather than save time, and urged mandatory disclosure of AI use in bid documentation.

Exdrog president Krystian Barczyk denied knowingly using AI and said the company may appeal the decision.