There is LOW competition in public sector tenders. It's going to change

We all complain about HIGH COMPETITION in public sector tenders. 

Numbers tell a different story. The competition is in fact very LOW.

But things are changing - very fast.

Currently, 41% of tenders receive only 1 proposal. 

69% of tenders receive 3 proposals or less.

18% of tenders are canceled. Out of them, 6-13% due to insufficient bids, the rest for other or unspecified reasons (based on Hermix data for selected analyzed markets).

Between 2011 and 2021, the share of contracts receiving only one bid rose from 23.5% to 41.8%, and the average number of bidders fell from 5.7 to 3.2 (according to the European Court of Auditors). The median EU country has single bids for 28% of tenders (EC Scoreboard 2024).

The reality is that the public sector space is NOT crowded.

There are very few or no proposals submitted. There are a LOT of tenders canceled. A lot of these cancelation are caused by insufficient bids.

But things are going to change. Fast.

The new generation of AI tools allow companies to write and submit better, cheaper proposals.

Soon, companies will submit several times more tenders. Each tender will have hundreds or thousands or pages. Very well written, solid, verified, checked. Companies are usually not forbidden from using AI. And even if they would be forbidden, there are ways to go around such interdictions. 

Yes, they still need great technical proposal writers, architects, experts, bid managers. Without a great team, AI is not able to write a winning proposal. But with AI, humans can work so much faster, and better.

At the same time, most evaluators are not allowed to use AI, or have strong limits on AI use. Some are internal interdictions, some are public - e.g. for Eureka (Eurostars, Innowwide), or for Horizon grants (the research programme of the European Union).

This creates a huge disadvantage for public authorities and funding bodies. They use 30-year old tools and processes, to evaluate 100 times more, better proposals.

Authorities and funding bodies will need to adapt fast.

The evaluation criteria and tools will change sharply. 

We live incredible, exciting times.

We have no idea what the world will look like, even in 1 year from now.

Bibliography, further reading

AI has a place in research, but not in evaluation of Horizon Europe proposals, Commission says. (2024, March 21). Science|Business. https://sciencebusiness.net/news/ai/eu-publishes-guidelines-use-generative-ai-research

Eureka Network. (n.d.). Eurostars remote expert guidelines. Retrieved November 1, 2026, from https://www.eurekanetwork.org/wp-content/uploads/2026/01/remote-expert-guidelines.pdf

Eureka Network. (2024). Eureka Innowwide call 3: Evaluation guidelines (Version 1.0). https://eurekanetwork.org/innowwide-evaluation-guidelines

European Commission. (n.d.-a). Access to public procurement. Single Market and Competitiveness Scoreboard. Retrieved November 1, 2026, from https://single-market-scoreboard.ec.europa.eu/index.php/node/264_et

European Commission. (n.d.-b). Access to public procurement (Belgium). Single Market and Competitiveness Scoreboard. Retrieved November 1, 2026, from https://single-market-scoreboard.ec.europa.eu/node/373_hr

European Commission. (2023, December 4). European Court of Auditors (ECA) publishes special report on public procurement in the EU. Public Buyers Community. https://public-buyers-community.ec.europa.eu/news/european-court-auditors-eca-publishes-special-report-public-procurement-eu

European Commission. (2025). Standard briefing slides for experts: Horizon Europe (Version 13.0) [Presentation slides]. https://www.leuphana.de/fileadmin/user_upload/forschung/Files/transparenz/standard-briefing-slides-for-experts_he_en.pdf

European Court of Auditors. (2023). Public procurement in the EU: Less competition for contracts awarded for works, goods and services in the 10 years up to 2021 (Special Report No. 28/2023). https://www.eca.europa.eu/ECAHTMLNews/NEWS-SR-2023-28/en/body.html

European Court of Auditors. (2024, March 11). Special report 28/2023: Public procurement in the EU [Presentation slides]. Chaire EPPP, Sorbonne. https://www.chaire-eppp.org/wp-content/uploads/2024/03/Sorbonne_11.3.24.pdf

European Ombudsman. (2026). How the European Innovation Council and SMEs Executive Agency (EISMEA) and the European Commission ensure that the use of artificial intelligence (AI) by external experts is compatible with their tasks as evaluators of applications for Horizon funds [Case]. https://www.ombudsman.europa.eu/hu/case/en/70849

Luxinnovation. (2026, May 21). Key changes for Horizon Europe funding mechanisms. https://luxinnovation.lu/news/key-changes-for-horizon-europe-funding-mechanisms

Sáenz Pérez-Aradros, M. (2026, May 19). Simplification in Horizon Europe [Presentation slides]. European Commission, DG RTD, Common Implementation Centre. https://www.gov.si/assets/ministrstva/MVZI/Znanost/Obzorje-Evropa/Dogodki/2026-Dogodek-Obzorje-Evropa/Simplification-in-Horizon-Europe.pdf    

AI is MAGIC in procurement. Or is it?

AI is MAGIC. Or is it?

At least, that's what everyone seems to believe right now.

✨ I've been building AI into Hermix for years. Using it daily. Testing it across dozens of real procurement scenarios with real companies. And I can tell you: Arthur C. Clarke had it right. Sufficiently advanced technology really is indistinguishable from magic.

The problem is when people stop there.

Because AI is also not magic. And in public procurement, confusing the two is expensive.

✔️ Here's what I've actually seen work. GPT models reading 300-page tender documents and producing structured summaries in minutes. Machine learning cleaning up years of fragmented procurement data across 250,000+ European authorities. AI Chat answering "which experts are required?" or "what's the minimum turnover?" directly from the document, in seconds. GraphRAG and Deep Reasoning handling the complex multi-hop analysis that standard models get wrong. SearchGPT building buyer profiles that would take a junior analyst two days to assemble manually.

This is real. The numbers back it up. 87% reduction in market research time. 75% reduction in tender analysis time. 60% less time writing proposals. Our users at Capgemini, Accenture, Unisys, Fujitsu, and 50+ other companies work this way every day.

❌ But here's what I've also seen fail.

Relying on AI to generating "original" ideas. AI missing cultural, technical or commercial subtext - that changes the entire meaning of evaluation criteria. Non-supervised AI producing output confident enough to submit and wrong enough to lose a bid. These failures are real too. And they happen more often when teams treat AI as a black box rather than a tool that requires judgment and supervision. Then comes disillusionment.

AI in procurement compresses effort dramatically. It does not replace strategic thinking.

The companies winning consistently in public sector are not the ones using the most AI. They are the ones using AI for the right tasks, at the right stages, with human judgment at the decision points that matter.

Finding the right tenders. Understanding buyers before the RFP drops. Qualifying opportunities with real competitive data. Reducing the manual burden of documentation. These are the jobs AI does well.

Deciding whether to bid. Understanding what the buyer actually wants versus what they wrote. Building a differentiated technical approach. These remain human work.

❓ There is also a question worth sitting with. If AI writes the procurement. Writes the proposal. Evaluates the submission. What exactly are we measuring? I don't have a clean answer. But I think it matters that we're asking it.

I've written a longer piece on this. What works, what doesn't, the specific techniques we use at Hermix (GraphRAG, Deep Reasoning, SearchGPT, citation support), and the adoption barriers nobody talks about honestly.

https://hermix.com/ai-is-magic-or-is-it/