2018 NDAA Analysis: Signals Towards the Federal Government’s Growing Interest in Blockchain Technology

by Holland & Knight LLP

Holland & Knight LLP

This is the seventh blog post in a series analyzing the current draft of the 2018 National Defense Authorization Act (NDAA) as signed into law on December 12, 2017. Stay tuned for more blog posts covering additional topics in the near future from Holland & Knight’s Government Contracts Team.

The term “blockchain” remains a mystery to many, but its potential is extremely intriguing, particularly as applied to the government contracting industry.  As reflected in the 2018 NDAA (H.R. 2810), the federal government is cautiously entering the blockchain waters.  This blog post will first attempt to explain what blockchain is, and then will review some of the government’s efforts to understand how blockchain can improve its business processes.

Holland & Knight attorneys Shawn Amuial, Josias Dewey, and Jeffrey Seul recently authored The Blockchain: A Guide for Legal and Business Professionals.  The book explains the blockchain concept in a readily understandable manner: Blockchain is a distributed ledger existing across many computers that can record transactions or other data. The transactions are mined into blocks and each block is given a unique hashtag that is copied onto a subsequent block, which form a chain (hence, the term blockchain).  Changes to the blockchain are very difficult because the blocks are chained together and distributed across a wide network.

This technology – distribution of data over multiple computers that is linked together and has a unique identifier – is of particular interest to the government contracts industry.  For example, blockchain technology potentially may produce “smart contracts,” which would be virtually self-executing and self-administered.  It may also be useful in tracking supply chains or distributing energy.  The Government accordingly is studying blockchain technology, especially whether it is resistant to cyber-attacks.

The 2018 NDAA encapsulates the Government’s approach to the blockchain.  Section 1630C instructs the Secretary of Defense, within 180 days of the NDAA’s enactment, to report back to Congress on the potential offensive and defensive cyber capabilities of blockchain technology and other distributed database technologies.  The report must examine blockchain technology’s cybersecurity capabilities.  Specifically, DoD is to assess the use or planned use of blockchain technologies by the United States Government or critical infrastructure networks, and the vulnerabilities of such networks to cyber-attacks.

Congress’ determination that any risks posed by blockchain technology must be studied before broad government adoption of the technology is reflected in other agencies’ establishment of pilot programs to test the utility and security of this distributed ledger technology.  For example, in June 2017, the General Services Administration (GSA) issued a small business set-aside Request for Quotations (RFQ) aimed at obtaining contractor support to develop a proof of concept for DLT (Distributed Ledger Technology), automated machine learning technology, and/or artificial intelligence based exchange implementation into GSA's Multiple Award Schedule (MAS) FAStlane new offer proposal review processes.1  The RFQ gives interested contractors three months to present a fully functional proof of concept.

The Department of Treasury’s Office of Financial Innovation and Transformation is running a pilot program to determine whether blockchain technology is capable of monitoring and tracking the agency’s physical assets as they are transferred from person to person.  This particular program will provide insight into blockchain’s abilities to track and manage supply chains.  The Department of Homeland Security is awarding Small Business Innovation Research grants to develop a use case for blockchain technology’s role in border security.

Each of these examples confirms the Government’s interest in blockchain technology as well as the myriad of uses to which the technology applies.  Because it is still emerging, the potential range of the uses of blockchain technology are not yet known. We will, however, continue to explore potential uses and blog about how it could impact the government contracts industry in the months and years ahead.

Bitcoin is one of the most visible uses of blockchain technology. In the midst of a historic price run-up, one unlucky bitcoin owner realized he had thrown away the hard drive that contained the keys that would have unlocked his bitcoin (which is now worth a reported $80 million). According to news reports, the former owner of the hard drive is dumpster diving (on a large scale) in an effort to recover the bitcoin keys.

Beyond bitcoin, blockchain is promising technology. Just beware, however, that there are  limitations. Just ask a couple in London searching a dump for $20 million in bitcoin.


1 At a recent Professional Services Council event, a GSA representative described how the agency had already incorporated blockchain technology to speed up the application process for prospective GSA offerors.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.