When AI becomes an ally:

Cutting bureaucracy from public procurement

Service

Data and AI

Industry

Public Sector

Sitting at the intersection of public value, taxpayer money, and societal outcomes, procurements shape how public money turns into effective outcomes. When they work well, governments can deliver better services faster and at lower cost. When they don’t, the consequences are slow projects, wasted funds, legal disputes, and missed policy goals. 

According to a European Commission 2023 report, public procurement across the EU corresponds to roughly €2 trillion per year, which is about 14% of the EU’s GDP, making it one of the most powerful levers in the public sector. In 2024 the number of public procurements registered in the Estonian Public Procurement Register was 9 316. Out of all the finalized contracts the so-called low-valued purchases - contracts on average worth a few thousand euros - added up to almost 61 million euros.  

 

€2T

Annual value of public procurement across the EU

14%

Share of EU GDP represented by public procurement

9k

Public procurements registered in Estonia in 2024

€61M

Total value of low-value purchases in Estonia

The preparations for procurements may take up to months of work. Public officials must manually copy information, fill technical descriptions, prepare evaluation criteria etc, sending documents back and forth. It’s important work that requires meticulous attention, since every line in these documents dictates how public money is spent. 

At the same time, many people doing this are not full-time procurement experts, but do it in addition to their primary line of work only a few times a year, hence having to reaquaint themselves with all necessary processes and documents. Depending on the ministry or government agency procuring, the preparation for a single tender can take up the time of about ten different officials. 

However, every inefficiency or delay in procurement preparation directly affects how quickly those services reach citizens and even how much those services ultimately cost.

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Cutting through bureaucracy with Hankelooja 

There is obvious public expectation for the state to act as a smart buyer and not only money, but also the amount of time invested into processes will receive scrutiny. Hankelooja, an AI-powered solution that automates the most repetitive aspects of the procurement creation process, was born as a proof-of-concept solution for the Ministry of Justice and Digital Affairs in Estonia to demonstrate how AI can make public sector routines smarter, simpler, and more human.  

By leveraging AI trained on publicly available procurement data, Hankelooja generates initial drafts, allowing officials to focus on substantive content rather than form. It helps create a correct and well-structured procurement document quickly, based on the description of the object being purchased.  

“It supports the user by generating a draft technical description of the object, which can then be refined and finalized into a complete procurement document,” illustrated Allar Laaneleht, Project Manager for Bürokratt (aka state AI) at the Ministry of Justice and Digital Affairs. “Testing has shown that there is a strong interest in and a real demand for such a tool, and that the benefits it delivers are easily measurable. In more complex cases, preparing a small-scale procurement can take days, but Hankelooja helps create a solid foundation for it in minutes, drastically reducing the time required to complete the task.”

According to Laaneleht, the key benefit for the client is that Hankelooja helps avoid errors. Standardized templates, for example, ensure that all necessary information is included in the final document. Laaneleht says that its greatest value, however, lies in the AI-generated sections: “Artificial intelligence helps the user expand their ideas and, based on past procurements, generate elements like supplier requirements or technical descriptions of the procurement object.” 

Designed with trust

Public procurements deal with sensitive decisions and taxpayer funds, there is no room for shortcuts and the ministry wanted proof that AI could work safely in government.

Hankelooja is trained entirely on publicly available procurement data - tenders and contracts are publicly accessible thanks to the Public Procurement Register. No confidential information and no external servers were used. Hankelooja runs inside the ministry’s secure network, drawing only from approved sources.  

From proof to practice 

For Estonia, a nation known for digital leadership, Hankelooja marks the next chapter: AI not as hype, but as help. The initial rollout focused on so-called small procurements, which are legally capped at €10,000 for goods and services and €30,000 for construction. These low-risk procurements were the perfect sandbox for experimentation, leading to substantial gains - up to 70% less time spent on document preparation. The combination of low risk, high return is the essence of Estonia’s smart government: lean, pragmatic, and quietly transformative. 
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Allan Laaneleht, Project Manager at the Ministry of Justice and Digital Affairs

“Testing has shown that there is a strong interest in and a real demand for such a tool, and that the benefits it delivers are easily measurable. In more complex cases, preparing a small-scale procurement can take days, but Hankelooja helps create a solid foundation for it in minutes, drastically reducing the time required to complete the task.” 

 

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The ripple effect 

Hankelooja is proof that innovation in government doesn’t require massive reform or risky bets. Sometimes, it starts with a single, well-chosen problem and willingness to rethink how public service gets done. 

Efficiency and democracy are not competing goals 

Efficiency and democracy reinforce one another.

The white paper argues that operational performance, state capacity and public trust, core measures of efficiency, depend on the same values that sustain democracy: transparency, accountability and pluralism.

Centralized systems may deliver quick wins but often weaken resilience and trust. Federated, modular designs take longer yet build adaptability, sustainability and sovereignty. 

 

There is clear potential to widen Hankelooja’s scope to procurements with higher contract value, where the process can be even more detailed and complicated. AI automation can have an immediately felt impact on reducing time, but also more consistency in the content of the documents. Additionally, this example offers a repeatable blueprint for AI adoption in the wider public sector: solve a concrete problem first, prove value, and scale with confidence.