Design of a Blockchain-based e-Tendering System: A Case Study in LPSE

Abstract

The tender process is a long and complex business process to produce a series of legal obligations related to business contracts. The purpose of conducting a tender in government is to support the work program by finding the right tender (provider of goods and services) in the government procurement program so that it can be the basis of their decision to choose the most suitable tender. At the government in Indonesia, the tender process has been carried out using an e-tendering system with the use of internet technology through LPSE. The purpose of e-tendering is to facilitate the procurement process with related parties to increase productivity, effectiveness, and transparency in the tender process. However, problems in the e-tendering system are currently centralized, so that the local LPSE organization has full control of the database and the system which can pose a threat of vulnerability to fraud, collusion, and manipulation practices. The tender selection process that is full of competition must be supported by effective and transparent technology so that it does not cause fraud and suspicion among bidders. Blockchain technology is one of the solutions that allow integrated systems without a third party because it adheres to the decentralized nature of distributed databases so that it has a copy of many users. By adopting blockchain e-tendering can reduce the source of fraud, namely database manipulation. This research will explore the process of developing a blockchain-based system with e-tendering case studies on LPSE.