Bellingham Aide Directed ChatGPT to Exclude Vendor from City Contract

The City of Bellingham, Washington, is initiating an independent investigation after a city employee allegedly used ChatGPT to skew a contract bidding process. This inquiry comes on the heels of disclosures by Cascade PBS and KNKX, which revealed that the employee sought to develop contract requirements favoring VertexOne over other applicants.

Breach of Procurement Ethics

According to public records, the city employee asked ChatGPT to devise contract criteria that would “favor” VertexOne, a Houston-based software provider, while subtly excluding its competitor, Origin SmartCity. Some of the AI-generated language appeared verbatim in the final request for proposals (RFP) document.

The contract of five years, valued at $2.7 million, was ultimately awarded to VertexOne, despite their bid being $1 million higher than Origin SmartCity’s proposal, which was actually assessed as the second-best option by the selection committee reviewing 13 bidders.

Investigation Announced

Bellingham Mayor Kim Lund emphasized the importance of fairness in public procurement. “We take our responsibilities to make objective purchasing decisions very seriously,” she stated. The investigation was launched following inquiries from Cascade PBS and KNKX in December, as city officials aim to examine these serious allegations thoroughly.

Context and Concerns

Legal expert Andrew Hamilton described the use of AI in this context as a “major red flag.” He notes that crafting bid requirements to benefit a specific vendor often constitutes bid rigging, a serious violation of procurement ethics. Hamilton stated that the real motivation behind the staff member’s actions remains ambiguous, indicating no evident financial ties to either vendor.

• An independent investigator is charged with gathering facts into this case.
• Bellingham has a population of around 97,000 and is strategically located between Seattle and the Canadian border.
• The investigation is projected for completion by early 2026.

Responses to Questions

The employee involved in the case has not yet been publicly identified as the investigation is ongoing. However, communications revealed that the staffer believed they had pinpointed the best vendor prior to any bidding process.

Implications of AI in Bidding Processes

The use of ChatGPT in crafting contract requirements raises critical questions about the technology’s role in potential procurement bias. The necessity for a neutral and transparent public bidding process is foundational for maintaining taxpayer trust and ensuring responsible expenditure of public funds.

In developing the RFP, the city staffer reportedly instructed ChatGPT to formulate conditions that aside from favoring VertexOne, could exclude Origin SmartCity without overtly stating it. This leads to concerns that AI applications can introduce biases into governmental operations, a troubling development in public procurement endeavors.

Outcome of the Investigation

As the inquiry progresses, Bellingham aims to address whether the use of AI tools created a bias in the contract awarding process. Authorities have reiterated their commitment to uphold ethical procurement standards, stressing the necessity of fair treatment for all bidders.

This investigation underscores the importance of vigilance and integrity in government contracting, and the implications of leveraging advanced technologies like AI in public service roles must be critically considered moving forward.