Over the last few years, there has been an increased interest in blockchain technology and all its benefits. While this industry is still relatively new, there is enough evidence to show that blockchain technology is going to make the world a better place. This is why researchers like S.M. Quamrul Hasan and Dr. Ramanathan Somasundaram, have published a report about how blockchain technology can influence government procurement.
The report published on Thursday was touting blockchain technology. It was a proposal for the Asian Development Bank.
Blockchain Technology In Government Procurement
There are currently more than 200 e-government procurement systems in the world. These systems are installed with the potential to maximize transparency in the procurement process. However, it is siloed in nature and so making advancements is close to impossible.
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In the report, the researchers offered detailed explanations for the development of a blockchain-based system that can be used worldwide. The system will be deployed globally and all the participating nodes will be capable of accessing the database of suppliers in various jurisdictions. They argue that the use of this technology will eliminate many of the problems that occur in this procurement process.
Vendors will no longer have to file multiple reports for entry on the procurement database. This way, each government will have real-time visibility of the actual workload of each vendor. According to the paper:
“Most times, a bidder that is overloaded with contracts that have not been completed gets awarded many contracts. This is typically due to a lack of knowledge about the work in hand. Also, a distributed network across governments that also supports banks will keep the procure-to-pay cycle digitally automated.
“The e-government procurement network needs to be extended to allow banks around the world submit authenticated performance bank guarantees for suppliers irrespective of the networked systems”.
The paper was published as a technical proposal. However, it shows that the Asian Development Bank has the intention of exploring the blockchain technology in a bid to improve government operations within Asia and globally. The researchers believe that it is a good step forward and would prepare well-defined funding requirements for the network. They suggested that three neighboring countries should be added to the list of participants for the pilot test.
The report concluded:
“As the system gets more stable, more e-government procurement systems can be added to the network”.