Smart Contracts in the Federal Government Leveraging Blockchain Technology to Revolutionize Acquisition

Abstract

Across the government, the process of creating and enforcing contracts has not changed much in the past several decades. To this day, most government contracts require paperwork that must be routed across multiple parties, with physical signatures attested to by key personnel, and further rely on third parties such as private contractors or other government organizations for enforcement and storage. This results in a slow, opaque process that lacks transparency, efficiency, and auditability. Despite this reality, major advancements in blockchain technology in recent years have opened a new door to greatly improving the traditional government contracting process via the use of blockchain enabled, smart contracts.

Smart contracts have the potential to simplify many types of agreements (such as Government-Wide Acquisition Contracts and General Services Administration Schedules, among others) without the need for tedious paperwork and third parties. They can objectify contracts and policies while also storing the provenance of the information on a globally decentralized database. This research paper discusses how blockchain technology, coupled with smart contracts, can provide a next generation approach to automate and radically reduce acquisition lead time, improve contract performance, and sustainably decrease transaction costs.