GSA experimenting with blockchain to cut contracting time

The General Services Administration is experimenting with blockchain to make it easier for vendors on the Schedule 70 IT program to establish contracts through automation.

“Blockchain actually doesn’t do the automation, it provides a baseline for automation,” Jose Arrieta, director of contract operations for the Schedule 70 IT program, said on IT Modernization Month.

Arrieta and his team studied the business process of Schedule 70 contracts — what vendors had to go through to get the contracts established — and identified the two longest processes in what Arrieta called the “optimal path” — financial analysis of the company and the prenegotiation memorandum. They then instituted blockchain by putting everything in a distributed ledger and redesigned the user interfaces so that industry only has to enter the information once instead of logging into multiple systems, and ran microservices to automate the processes.

“So rather than take a number of days to do financial analysis and a number of days to develop a negotiation position, rather than have to log into a bunch of different systems to find that information and organize it, we are able to do that now in one second,” Arrieta told the Federal Drive with Tom Temin. “And that lessens the burden on the industry partner, and it allows the contracting professional to focus more on critical thinking tasks rather than the process tasks associated with interacting with multiple systems.”

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Arrieta said they could have automated without using blockchain, but blockchain provides a record of all the interactions that both parties can access in real-time, allowing the microservices to be more accurate without having to take the time to reconcile two separate versions of the same document.

“This is the hardest part about understanding blockchain: it is true that everybody has a copy. Everybody has a view of the original copy. And that’s the interesting thing,” Arrieta said. “So rather than recreate the copy multiple times, you have a data layer that all stakeholders have a view into. From a GSA perspective, we control what our market participants have a view into, because there are certain rules associated with what an industry partner can see. We’re not going to share multiple industry partners’ information with each other. But it’s not actually multiple databases with copies. It’s one transparent view that multiple stakeholders can see in real time, and is a record of all interactions with one another.”

This took about seven weeks to implement with one small business.

This is part of a test to see if GSA can simultaneously deliver value to the taxpayer, lessen the burden on industry and free up contracting professionals from process-oriented tasks so they can spend more time focusing on critical thinking.

“From a cost perspective, we believe this will lower the direct costs of analyzing a proposal by close to 80 percent,” Arrieta said. “That’s not proven yet; we still have to build out the rest of the microservices so that much of the business process is automated, but our goal is actually to get the onboarding time from scheduled contractors from 110 days through our normal process and 40 days through our fast-lane process to less than 10 days.”

He said GSA has thoughts on where to proceed for the next step, but is currently waiting on more feedback from both internal and external stakeholders to evaluate the process.

“We’re really trying to live in the present on this before we get too far in the future because we realize this is going to touch a number of stakeholders,” Arrieta said.