One of the most controversial issues in recent years is corruption in public procurement, where new events are discovered every day that involve the people in charge of the bidding process, fictitious companies that apply to hundreds of bids and high-ranking officials who arbitrarily use their influence to award bids bypassing the normal contracting processes.
Taking into account these risks and the most frequent types of corruption, and using the premises of Blockchain technology, it will allow the information provided by all the entities that participate in the process not to be manipulated.
In this sense, the company Oesía carried out its first public bidding process without human intervention. The first has been 100% automated, which took place this week. This has been indicated by the Oesía Group to our Cointelegraph team. It seeks to improve the public bidding process, guaranteeing transparency and efficiency.
Yes, the application of Blockchain in public and private processes allows raising the levels of transparency and security. Data is stored on the blockchain that gives the technology its name, making it immutable, protecting the data through encryption and identity management processes.
The tool, developed by Grupo Oesía and Open Canarias, incorporates blockchain technology and smarts contracts in electronic bidding, which allows both the registration of the electronic footprint of the offers of public contracts, and the automatic evaluation of them. So far it has been applied in 25 contests.
In this way, any attempt to alter the information is avoided, great traceability is offered and privacy is protected. These and many other advantages make blockchain one of the most secure and versatile technologies that exist to store and manage private and public information.
Usually, the public bidding process on a blockchain network involves creating multiple smart contracts, one for each phase of the hiring process. The first executes the registration of the purchasing unit, that is, the public agency that intends to purchase a product or contract a service.
The second smart contract is the supplier registration, in which the data of the companies that want to participate in one or more bidding processes are stored on the blockchain. Within this second contract, another is also executed that verifies the supplier’s reputation according to the information registered in the network about the results it has obtained in previous tenders.
A smart contract room is the one that allows you to store important information about a contracting project, from the registration of the project to the result of the tender. To carry out the award of a project, a fifth smart contract is executed, which assesses the technical requirements of the proposals registered in a bidding process.
In the case of the Oesía Group, they have implemented processes that seek to guarantee the integrity of the offers and receive only their footprint at first, and only receive the complete offer when it is strictly necessary to have it (when you want to value it) and validating that footprint-offer relationship through a smart-contract that acts as a notary to ensure that not a single bit of the offer has been changed. his footprint was presented.
They have also created more efficient processes, where managers do not have to review the calculations of the scores of the criteria subject to evaluation by means of formulas, since they can trust a system where that assessment is implemented in a smart contract, which will leave a distributed and immutable traceability of how they have assigned the scores and that anyone can audit.
In general, they have created new rules of the game, where the public traceability of everything that occurs in the bidding process is available to anyone in real time.
The application of blockchain technologies is still in its infancy in the public bidding sector, even internationally, but it represents a complete paradigm shift in this area.
Blockchain on the confidentiality of tender documents
Blockchain technology can act as a guarantee of security and confidentiality in relation to the information that public sector entities put in the hands of bidders in the bidding process.
The decentralized, transparent and secure nature of the Blockchain protocol can fulfill the conditions for a better commitment of the contracting entities regarding the confidential information they handle. Achieving a more transparent and reliable process for your treatment.
Spain leader in using Blockchain for public tenders
Spain has been a pioneer in launching the use of Blockchain technology in the public bidding sector, the use of this practice underscores its contribution to security and transparency in public management.
The government of the autonomous community of Aragon, in Spain, began using blockchain to manage some parts in this public works bidding process.
The tool not only uses Blockchain, it also incorporates smarts contracts in electronic bidding, that allows both the registration of the electronic footprint of the offers of public contracts (which acts as a tender) and the automatic evaluation of them.
The chosen technology is Hyperledger Fabric (a project of the Linux Foundation), backed by the subsequent registration in a public blockchain of the most relevant elements of the award procedure, which can be consulted by anyone.
The autonomous community of Aragon has been a pioneer in the implementation of blockchain within the administration. This was evidenced when in September 2018 he joined the Alastria group, a blockchain ecosystem of more than 274 entities, including companies and institutions that create blockchain-based tools in line with Spanish legal frameworks. and from the EU.