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HHS becomes a blockchain for a new acquisition model

The human health and services department is extracting a page from the playbook of major retailers thanks to blockchain. The new system gives subcontractors visibility over the entire department's acquisition function, in a way that recalls price guarantees.

"It's called Accelerate, and we're actually testing prototyping of blockchain technology in the capture function," Jose Arrieta, associate deputy assistant secretary for acquisition at HHS, told Red Hat Open First on September 18th. "We are using blockchain as an infrastructure layer, so we are using a microservice strategy on that infrastructure layer to use RPA and use machine learning to automate the process and create more in-depth analytical insights. static capture data. "

This means that HHS has taken the contract by writing data for 5 different contract writing systems. This means about $ 26 billion of annual spending on approximately 100,000 contracts. It then uses machine learning to clean up data, which involves searching for and correcting incomplete or inaccurate data. This data is then inserted into the Hyperledger Fabric, a blockchain operating system. HHS has therefore built in microservices to represent the life cycle of the acquisition.

This approach reverses the normal business model by standardizing data and decentralizing execution, rather than the other way around. In other words, everyone sees the same data, but makes their own decisions. The idea is that greater data visibility will encourage better decision-making, saving time and money.

The full operational authority scheduled for Thanksgiving

Arrieta said that when he first came to HHS, he understood that the department is extremely decentralized and the missions are disparate. The National Institutes of Health consists of 27 different institutes and centers, but centralization goes against the culture of the department.

"So we can take all the data coming through the industry with our blockchain, we can take all the historical data and structured and unstructured data in these 100,000 contracts, I can pre-fill plans acquisition and market research documents so they can read it and write down their risks and objectives, "said Arrieta

Arrieta said that the example that always gives to explain this system involves shopping with his wife to Target. While he was standing in line, he pulled out his phone and started looking for their purchases on Amazon. When he asked why, his wife told him that if Amazon cost less, and she showed the cashier that, the cashier would have served the article.

"So we actually built that feature to push those data back to our professional," he said. "And we have not stopped or changed the systems they use to do business. Right now we're just getting rid of them."


Accelerate is currently in possession of a provisional authority to operate, but Arrieta said that He waits to have full authority to operate before Thanksgiving.

"The reason we can talk about what we have done is that we are using the blockchain layer and we are using automatic learning with static data, if we have permission to operate before November what will enable us to do is to have data that regularly update from contract writing systems, "he said. "And this will make it more dynamic, but we are still able to do tests and prototypes with static data."

Arrieta said that Accelerate obtained consensus on HHS because his team prototyped it first, so he built the business houses while building the system. They measured investments in three specific areas: savings at the point of purchase, illustrated by the Target example; improvement of the process, because the new system reduces the life cycle of the acquisition from 200 to 90 days; and how much money goes to the modernization of technology. Arrieta said the project is micro-managed from an investment perspective, which is the way he presented it to the chief financial officer.

In the meantime, it helps the industry because suppliers need to enter their information only once, and then occasionally update them when their financial data change. And it takes the project managers who are at HHS to treat cancer, or some similar mission, to become federal acquisition experts.

"And the last thing we did … we said we should automate the terms and conditions, analysis and prices paid through the department." We then created a microservice from the data layer that analyzes the prices paid in terms and conditions in our product categories, "said Arrieta." We spend about $ 10 billion in business products each year and about $ 17 billion in services. "

And this concept is not just limited to acquisition.

"We think that the model we have built is a model model for administrative management functions throughout the department, and we will start to implement it in other areas," he said. "This is not just a model for acquisition. And it's interesting, because it's about the mission. "

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