Mexican Government Conducts First Public Tender Using Blockchain

The Mexican government is planning to conduct a public procurement procedure on a blockchain network which is the first ever case of using the technology for such purposes in the country. This is part of a larger initiative to promote transparency and accountability of the public tenders. The organizers will be publicly releasing the white paper and object of tender in late August.

The governance model of the network is a collaboration between several government entities, notably the Coordination of the National Strategy and the Digital Government Unit as well as the consultancy of Mexico’s blockchain industry and international experts. Public institutions, universities and civil societies will be part of the model’s horizontal structure; these parties will supervise and validate the transactions within the blockchain.

The project first originated from a hackathon which was held in April this year, which developed the ­­context of Talent Land 2018. Yolanda Martinez Mancilla, the coordinator of the National Digital Strategy, said at that time that the country’s government was developing a project which would track bids for public purchases through the use of blockchain.

“The goal is to continue strengthening the prototype that was presented in April this year, within the framework of Talent Land 2018, and to launch in August the model of governance of the public network,” was quoted Mancilla to have said.

The bidding process will require the user to create a number of smart contracts, one contract for each specific phase of the procedure. The transactions that will take place on the blockchain will be supervised and validated by both the academics and the organizations.

The first contract will execute the registering of the “Buyer Unit”, the government agency which handles the purchase of services or goods. The second contract will enable suppliers to register and it will also store their information on the blockchain. The third contract will be created within the second contract, and it will have the role of verifying the information and the reputation of those that registered on the chain and if they took part in previous public tenders.

The fourth smart contract keeps the project’s information stored, starting from the registration phase to the outcome of the tender. The fifth contract then assesses the proposals and checks if they meet the required criteria, and then it gives the project to the winner.

A project to increase transparency in public contracts has been in a matter of discussion since December of 2017 after a high-profile scandal involving a South American construction firm and the then-president Enrique Pena Nieto.

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