Tender processes follow-up
Last year we did a blog post on procurement processes such as requests for proposals or calls for tenders, and how to prevent common fraud schemes found on them. Recently, we had to further explore on that blockchain-based solution. As an addition to that post, we found these benefits:
Proposal/bid secrecy
The result of a cryptographic hash function is applied to the proposal and its result is blockchain-recorded. Proposal content is never exposed, in fact, it may not even be sent until the deadline has passed.
Since there is no possible way for whoever manages the process to leak or to know proposal contents in advance, inside information and collusion risk is eliminated.
Strict deadline compliance
Blockchain transaction dates provide secure timestamps that cannot be forged. Proposal submission date is unalterable.
There is no possibility of submitting proposals after the deadline without them being exposed to all other bidders and everyone else involved.
Unique proposals
All proposals are signed and notarized in the blockchain. A bidder could submit many proposals before the deadline, but only the last one signed by him on the blockchain will be valid.
Uniqueness prevents fraud schemes possible on non-blockchain signing solutions, where bidders can sign and timestamp many proposals. Then, after the deadline and in complicity with someone from inside, they can replace their submitted proposal with the one that better fits their needs.
Unalterable tender documents, proposals and bids
Document hashes are blockchain-recorded, assuring their immutability.
Bidders can be certain that tender documents they work on won’t be changed, and that their and others’ proposals won’t be modified to take advantage.
Undisputed authorship
Not necessarily blockchain-related, but digital signatures employ public-key cryptography to guarantee documents’ authentication and non-repudiation.
The origin of a tender document or proposal is then conclusive and beyond question.
Transparency
The blockchain works as an auditable public record for tender documentation.
Citizens and unawarded bidders can verify the process. Fraud schemes are exposed, with proof easily available for anyone to report.
No need for trusted third parties
Involved parties and the platform itself are restrained by the blockchain, leaving less room for fraud.
The process no longer depends on trusting envelope custodians or software administrators, reducing risk and closing common gateways to corruption.
