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HHS Moves Ahead on Blockchain for Acquisition Modernization

The agency’s new tool, which also uses artificial intelligence, will allow HHS to accelerate procurement and make contracts more efficient.

Phil Goldstein

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Phil Goldstein is a former web editor of the CDW family of tech magazines and a veteran technology journalist. He lives in Washington, D.C., with his wife and their animals: a dog named Brenna, and two cats, Grady and Princess.

At the Department of Health and Human Services, the time for talking about blockchain is over. Now it’s time to see what the technology can do.

Last month, HHS received authority to operate and pull live data for a new tool, called HHS Accelerate, which uses blockchain and artificial intelligence to enhance procurement. The goal of the tool, which the agency has been testing since last summer, is to give HHS’ contracting officers greater visibility into the agency’s acquisition function. That visibility will allow them to cut down the length of the acquisition lifecycle, as well as promote better decision-making on contracts, saving time and money, agency officials say.

Jose Arrieta, the associate deputy assistant secretary for acquisition at HHS, told Federal News Network last month that HHS Accelerate will pull current data from five contract-writing systems and about 100,000 contracts that represent nearly $25 billion in annual spending. The data will update every 24 hours, Arrieta says.

“We believe that there’s significant savings and significant price negotiation power that will come with having full visibility into prices paid,” he told Federal News Network.

HHS Wants to Speed up Acquisition with Blockchain

In a separate interview with the program Government Matters, Arrieta noted that HHS has “always struggled with the access to data, access to real-time data, or we’ve been forced into one specific business process,” MeriTalk reports.

With HHS Accelerate, the agency has created a standardized set of data, he says, “and we decentralized the execution of that data, leveraging a microservices strategy, to actually empower the acquisition workforce.”

Until now, if agencies wanted to make strategically sourced purchase, it could take months to pull all the data together and analyze it before making a decision, according to Arrieta.

“Now we have the ability to do that analysis in one second and provide the information to the contracting officer in negotiation or acquisition planning,” Arrieta said. “That is extremely powerful. It’s like going to Target; let’s say you’re buying an iPhone — you look up the price on Amazon and find out it’s $30 cheaper. You show it to the Target cashier and they give you a discount. That is the empowerment of the acquisition workforce and empowerment of the contracting professional.”

Arrieta has previously explained that the tool uses blockchain’s distributed ledger technology as an infrastructure layer. Then, HHS takes advantage of a microservices strategy on top of that infrastructure layer to use robotic process automation and machine learning to automate the process and create deeper analytical insights.

“Machine learning actually cleanses the data as it comes in from our legacy systems. Blockchain becomes the reference point and the taxonomy holder,” Arrieta tells Federal News Network.

Now that HHS can use live agency data and not static data, the tool will likely be tweaked. “Once we get it operating smoothly, we’ve got to start to share it with our workforce and get feedback from them on what’s valuable and where we can provide better analysis and drill-down and focus,” Arietta says.

By March, HHS hopes it can provide the tool to its contracting workforce.

“That means extracting the data from the writing systems, being able to analyze it, and then push it to the contracting professionals and get feedback from them on what information is useful, what information could be more useful, what is not useful, and start to train the machine learning in that way,” Arrieta says.

According to Federal News Network, next summer, before the end of the third quarter of fiscal year 2019, HHS expects to decide whether it will move away from one of its legacy systems, Departmental Contracts Information System, to HHS Accelerate.

“We think that won’t have any effect on the workforce,” Arrieta says. “They won’t even know that a change has occurred.”