BidChain: A Blockchain-Based Decentralized Application for Transparent and Secure Competitive Tendering in Public Construction Projects

Abstract

Deficiencies of tendering systems in public projects can leave governments with subsequent issues in projects and waste taxpayers’ money. Electronic tendering (e-tendering) systems have been found beneficial for awarding public projects; however, current practices still have deficiencies. Legal and security issues and the lack of transparency have been identified as the main shortcomings in current tendering practices. This paper argues that the underlying issue with e-tendering systems is due to their centralized nature. Therefore, this research presents a critical assessment of the blockchain technology in developing distributed e-tendering systems and proposes a novel framework for decentralizing e-tendering systems. The proposed framework is created by integrating three technologies: blockchain, public key infrastructure (PKI), and interplanetary file system (IPFS). Using the proposed framework, a decentralized application (DApp) is developed to demonstrate the concept and evaluate the potentials of blockchain in mitigating the security and legal challenges and improving transparency and trust. The result shows that the reliance on centralized authorities for managing the tendering process is reduced in a blockchain-based e-tendering system, and a transparent and tamper-proof record of the tendering history is distributed among parties.