Efficiency of Smart Contracts Application in Public Procurement in the Construction Sector

Abstract

The article examines the economic and organizational efficiency of implementing smart contracts based on blockchain technology in the public procurement system of the construction sector of the Russian Federation and St. Petersburg. Relevance research conditioned by the need to increase transparency, reduce transaction and administrative costs, and speed up procurement procedures in the context of large-scale public investment and limited budget resources. The paper develops a methodology for quantitatively assessing the economic effect of using smart contracts, including an analysis of direct savings in budget funds, reduced procurement processing time, and increased capital turnover. Based on official statistics and economic and mathematical modeling, it is shown that the introduction of smart contracts can reduce costs by 10% of the total volume of purchases, which is equivalent to savings of about 550 billion rubles for the Russian Federation and 68.2 billion rubles for St. Petersburg. Additional savings are achieved by reducing the average procurement processing time from 15 to 10 days, which leads to a decrease in administrative costs by 8.15 billion rubles and 1.13 billion rubles, respectively. A comprehensive assessment of the total economic effect confirms the high feasibility of digitalizing procurement procedures using smart contracts, which can become the basis for further transformation of the public finance management system and increasing the efficiency of using budget funds in the construction industry.