The document discusses how emerging technologies such as blockchain, artificial intelligence, and robotics could revolutionize federal procurement processes. It describes a proof of concept by the US General Services Administration that automated procurement using these technologies, reducing contract award time from 100 days to less than 10 days. The document argues that blockchain provides a secure and transparent foundation for widespread automation of procurement while preserving integrity, fairness, and openness.

1. Acquisition
Blockchain,AI and robotics: How future tech will simplify federal
procurement
By: Nick Nayak and David T. Nguyen  March 27
Emerging technologies, such as blockchain and machine learning, could revolutionize federal procurement. (Zapp2Photo/Getty Images)
Created in 1974, the Federal Acquisition Regulation provides “uniform policies and procedures for
acquisition” to ensure integrity, fairness, and openness in federal procurement. And for over 40 years now,
federal agencies have implemented numerous contract writing and support systems. But no one technology
has made it dramatically easier for contracting officers or industry.
While markets and supply chains increase in complexity, thousands of contracting officers rely on legacy
technologies to solicit offers, receive offers, evaluate offers, and make awards every day. The irrational
dependency on legacy technologies has caused delays in awarding contracts, threatening the promise of
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2. fairness and openness in federal procurement. Undercapitalized small businesses are the most adversely
affected by delays and inefficiencies in the procurement process.
Who would have thought that it would take more than 40 years before an emerging technology like
blockchain would revolutionize federal procurement? In 2008, in response to the collapse of the financial
system, Satoshi Nakamoto invented blockchain as a worldwide transactional ecosystem with inherent
procedural trust. He imagined a decentralized, self-regulated financial ecosystem free from abuse, fraud, and
unwanted political influences.
Almost 10 years after its conception, the blockchain industry has evolved and expanded considerably.
Although originally conceived for cryptocurrency, blockchain is now being considered for procurement,
supply chain, real estate title, mortgages, and medical records. Even the federal government can’t stay on the
sidelines. About six months ago, the U.S. General Services Administration, the world’s largest buyer, built
the first federal procurement blockchain proof of concept to demonstrate how blockchain could modernize
federal procurement. They learned that blockchain, when combined with artificial intelligence and robotics,
provides the foundational architecture for widespread automation.
Built in seven weeks, the proof of concept automated the procurement process and reduced the time to award
contracts from 100 days to less than 10 days. By automating processes like financial review, the blockchain
eliminated human error, bias and subjectivity from the process. Additionally, a smart contract
(programmable chaincode) was deployed to automatically calculate the financial health score from the
offerors’ balance sheets and income statements, in a standard fashion using commercial and government best
practices.
Since every transaction is stored on the blockchain’s digital ledger, vendors are no longer in the dark. As the
offers progress through the workflow, vendors receive alerts of their offers’ status instantly. The blockchain
makes the process transparent for everyone in the value chain while preserving the privacy of each
transaction.
So, what is blockchain? Generally, blockchain is an incorruptible, networked digital ledger for recording
assets and transactions in the value chain. The blockchain’s embedded procedural trust and encrypted, fault-
tolerant distributed ledger provides a scalable foundation for automation while preserving integrity, fairness
and openness in federal procurement. The blockchain’s digital ledger tracks products and services (assets) as

3. well as solicitations, offers, awards, and delivery (transactions). Furthermore, smart contracts or
programmable logic can be applied to the blockchain to execute transactions autonomously such as
calculating the financial health score, replenishing inventory, determining the optimal market price of
products and services, verifying the integrity of vendors, and many more.
When transactions occur on the blockchain, they are verified, encrypted, and recorded in blocks and chained
to other blocks using a hash of the transactions. The encryption and hash-based chain provide a trustable,
incorruptible ledger of transactions that is properly ordered and resistant to fraud and abuse. Trust is further
strengthened by distributing copies of the ledger to authorized participants within the value chain. The
networked digital ledgers and encryption makes it virtually impossible for bad actors to corrupt the ledger
with fake transactions.
By design, the blockchain preserves the integrity of the assets and transactions between multiple parties
within the value chain. While there are many types of blockchain (public, permissioned, and private), federal
agencies are more likely to opt for the private blockchain to facilitate procurement transactions among pre-
vetted parties with identity enforced using digital certificates and identity management.
The FAR espouses the policies of integrity, fairness, and openness in federal procurement. The blockchain
enforces those policies through a system of procedural trust embedded into the platform. With use of
blockchain, the procurement process can be more transparent, substantially faster, and less vulnerable to
abuse, fraud, gaming, etc. The blockchain will promote better competition, reduce protests, and provide
leaders with unique business insights into the procurement value chain unavailable previously.

4. Chief procurement officers and other leaders throughout the government are now faced with the question,
“Who will be the first to employ blockchain, artificial intelligence and robotic process automation to make
federal procurement easier for contracting officers and industry?”
Nick Nayak is a former chief procurement officer at the United States Department of Homeland Security.
With over 30 years of federal procurement experience, Nick has witnessed the evolution and advancement of
federal procurement.
David Nguyen is the founder and CEO of United Solutions, a digital transformation company that built
GSA’s federal procurement blockchain proof of concept and artificial intelligence platform.
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