New report highlights AI procurement challenges in the Victorian public sector
Author ADM+S Centre
Date 21 September 2026
As artificial intelligence becomes increasingly embedded in government services and systems, new research from the ARC Centre of Excellence for Automated Decision-Making and Society (ADM+S) examines how Victorian public sector organisations are navigating the risks and complexities of procuring and deploying AI.
Undertaken with the assistance of the Office of the Victorian Information Commissioner (OVIC), the report, AI Procurement in the Victorian Public Sector, explores why government organisations are adopting AI, how they are managing risks and regulatory requirements, and how to move forward in a complex environment.
The study involved interviews with a number of public sector workers responsible for managing AI procurement and deployment, as well as service providers and software vendors. It is the first qualitative empirical research into how AI is being procured and deployed across the Victorian public sector.
The findings offer a snapshot of AI adoption and procurement in the Victorian public sector at a time when organisations were still developing their approaches to AI governance and use. However, the report identified a number of complexities that made AI procurement particular complex in the current environment.
These include amplified risks associated with AI use, the opacity of commercial AI supply chains, power dynamics in software markets that frustrate efforts to distribute regulatory obligations by contract, the difficulty of evaluating claims around efficiency and productivity uplift, and procurement rules that limit the capacity to better engage with vendors.
The interviewees also offered a number of suggestions for improving AI procurement and deployment, including:
- Greater clarity about what agencies are trying to achieve with AI, with the goal of building purpose and evaluation into procurement processes;
- More investment in AI readiness, particularly in relation to data, digital systems and expertise in AI ethics; and
- More legislative and regulatory frameworks that define permissible uses and obligations around the use of AI to give purchasers more power to negotiate with vendors over how compliance must be managed.
Authors: Jake Goldenfein, Fan Yang, Alexandra Sinclair, Kimberlee Weatherall.
Read the full report AI Procurement in the Victorian Public Sector
