This survey covers government purchased products and services which fell under the following voluntary measures related to government procurement: "Procedures for Government Procurement on Products (Operational Guidelines)", "Measures on Japanese Public Sector Procurement of Telecommunications Products and Services", and the "Measures Related to Japan's Public Sector Procurement of Medical Technology Products and Services".

In other words, it covers in principle procurement contracts made by central government entities and public corporations given in the following Table A, and products and services of which value were above the threshold given below. *

From 1 January 1995 to 31 March 1996: 100,000 SDR (17 million yen)
From 1 April 1996 to 31 March 1998: 100,000 SDR (14 million yen)
From 1 April 1998 to 31 December 1999: 100,000 SDR (17 million yen)

*(Note1) Procurement for public works (including architectural planning and consultancy ) is excluded from this survey.

(Note2) The figures for 1995 only cover goods, reflecting the fact that only procurement of goods were covered by the old Agreement on Government Procurement at that time.

Table A: Changes in the Entities Covered by this Survey of Government Procurement Figures [1]

[Note 1] The individual procurement entities are listed only under the names they held as of the end of December 1999, and the names of special corporations before their merger or abolition are not given.

[Note 2] The new agreement also covers "all prefectural governments entitled "To," "Do," "Fu," and "Ken," and all designated cities entitled "Shitei-toshi," covered by the Local Autonomy Law," but they are not included in these figures.

The total value for government procurements of goods and services for 1999 was 1.0296 trillion yen, a decrease of 5.7% from the previous year, although the total continued to be in excess of 1 trillion yen (Table 1-1).
Table 1-2 shows the trends, along with the past results reported to the Committee for Drawing Up and Promoting the Action Program to date.

Table 1-1: Total Value and Number of Government Procurement Contracts

The ratios of competitive tendering contracts to single tendering contracts vary significantly according to whether the items procured were goods or services. In 1999 about 85% of the goods procured were obtained through open tendering procedures. In contrast, looking only at the service contracts, more than half of the procurements were with single tendering procedures, accounting for more than 60% of the spending on services procurements.

Table 2: Breakdown of Procurements by Type of Goods or Service, and by Contract Type

The open tendering procedures continue to occupy a large portion of the total, in terms of numbers of contracts, as well as on value basis. (About 80% on a number of contract base, and about 70% on a value base).
On the other hand, the proportion of single tendering contracts is growing. In 1999, the level was about the same as 1998, which was the highest level since the investigations began.

The contracts through selective tendering procedures are decreasing each year. In 1999 there were 177 of these contracts, which was about 1% of the total number of contracts.
For the procurement of goods and services the method of selective tendering is confined to application to an extremely limited number of cases.

Table 4: Grounds for Selective Tendering Procedures

Of the reasons listed in the 15th Article of the WTO Agreement on Government Procurement as the conditions of single tendering procedure, the ones most often cited for the adoption of single tendering procedures were that "(a) in the absence of tenders in response to an open or selective tendering," "(d) a change of supplier would harm compatibility with already existing products or equipment," and that "(b) when, for works of art or for reasons connected with protection of exclusive rights such as patents or copyrights, the products can be supplied only by a particular supplier." As in 1997 and 1998, these reasons accounted for more than 90 percent of cases. (Table 5).

Table 5: Reasons for Use of Single Tendering Procedures

In 1999, 4.7% of the total spending on procurements was to foreign businesses, equivalent to 2,4% of the number of contracts. In comparison to 1998, there was a decrease on a value basis, but an increase in the percentage of the number of contracts.

Table 6-1: Ratio of Procurement from Foreign Suppliers

Table 6-2: Nation's Origin in the Foreign Supplier's Award

The number of bids submitted by foreign businesses in competitive tendering procedures is still very low. On the single tendering contracts, however, the proportion of contracts with foreign businesses increased from 2.7% to 3.8% of the total of all single tendering contracts.

Table 7: Ratio of Foreign Suppliers Responding to Tenders and Ratio of Awards to the Foreign Suppliers (1999)

(Note1) Ratio of tender: The number of foreign tenders/The total number of tenderers
Ratio of the designation: The number of foreign tenderers/The total number of tenderers (designated)
Ratio of awards: The number of contracts awarded to foreign tenderers/The total number of tenderers in selective tendering procedures
Ratio of contracts: The number of contracts made by foreign suppliers/The number of single tendering procedures

(Note 2) Competitive tendering procedures = Open tendering + Selective tendering

The proportion of foreign goods and services obtained through government procurement in Japan has remained at about the same level for the past 3 years. In 1999, foreign goods and services accounted for 13.4% of the total procurement spending, and 20.2% of the total number of contracts. In addition, considering only the procurement of goods, foreign goods accounted for 15.3% of the spending, and 23.9% of the number of contracts.

Table 8: Ratios of Foreign Products and Services

[Note1] Figures in parentheses are for products only.

In 1999, products and services from the United States accounted for 58% on a value basis and approximately 52% on a number of contracts basis.

Table 9-1: Breakdown of foreign products and services by place of origin (value base)

Table 9-2: Breakdown of Foreign Products and Services by Place of Origin
(number of contract base)

Table 10 shows breakdowns of Japanese government procurement by product category (value basis), which are then broken down into list of products with ratios for foreign made products.

The total value of procured products amounted to approximately 784.7 billion yen. The largest value for procured items included "office machines and automatic data processing equipment" (personal computers, typewriters, projection screens, etc.), "scientific and controlling instruments and apparatus" (binoculars, thermometers, voltmeters, micrometers, etc.)".
These two categories accounted for about 48% of total procurement value.

The categories with the highest percentage of foreign products were "mineral products" (soil and rocks, crude heavy oil, metal ores, etc.) (approx. 95%),"aircraft and associated equipment" (airplanes, balloons, propellers, parachutes, simulators for aviation, etc.) (approx. 64%).

Table 10: Total procurements by product (1999)

Table 11 offers breakdowns of Japanese government procurements by service categories (value basis), and presents the ratio of foreign services.
Total procurement amounted to approximately 245.0 billion yen and of that approximately 182.1 billion yen (74%) was taken up by "Computer and related services," (computer programming, data processing, etc.).
Foreign services are concentrated in specific areas, such as "telecommunications services" (e.g. construction of networks for transmission of electronic data, construction of online data retrieval systems) (about 10%).

Table 11: Total procurements by types of services (1999)

Table 12 shows Japanese government procurement by product categories and offers a breakdown of foreign product ratios.
The total number of product contracts amounted to 13,469, and the two categories: "photographic apparatus and equipment optical goods, and clocks" (film, cameras, projectors, chronometers, etc.), and "medicinal and pharmaceutical products" (antibiotics, hormones, vaccines, absorbent cotton, bandages, etc.), accounted for about 44% of all procurement contracts.
The categories with the highest percentage of foreign products were "mineral products" (soil and rocks, crude heavy oil, metal ores, etc.) (approx. 86%),"aircraft and associated equipment" (approx. 84%) and "agricultural products and processed foods" (fish products, grain, drink products, alcohol, etc.) (75%).

Table 12: Number of Procurement Contracts by Product Categories (1999)

Table 13 offers a breakdown of Japanese government procurement by service categories (on a contract basis), which is broken down into foreign service ratios.
The number of contracts amounted to 2,695 and of this number 1,309 were for "Computer and related services." (computer programming, data processing, etc.)

Table 13: Number of procurement contracts by type of services (1999)

The voluntary measures (Procedures for Government Procurement of Products [Operational Guidelines]) encourage the adoption of the Overall-Greatest-Value evaluation method(OGV) where the lowest-price-award method is deemed inadequate. In addition, in the areas of computer products and services, telecommunications products and services and medical technology products and services, with regard to high value items (see note), it is obligatory in the voluntary measures to apply the OGV.
In 1999, the OGV was adopted in 588 procurement contracts, representing a rise on the previous year to occupy 3.8% of total procurement. Of these contracts, 153 were awarded to foreign products and services.

(Note) For computer products and services, this includes all procurement above 800,000 SDRs. In the area of telecommunications products and services and medical technology products and services, until 31 March 1996, this included all procurement above 800,000 SDRs, from 1 April 1996 all procurement above 600,000 SDRs, from 1 April 1997 all procurement above 400,000 SDRs and from 1 April 1998 all procurement above 385,000 SDRs.

Table 14: Implementation of Overall-Greatest-Value Evaluation Method

Note: Figures in parentheses in the "Total" line indicate percentage to the total procurement

Responses to pre-bid requests for submission of materials and comments on draft specifications are illustrated in Table 15-1 and Table 15-2.

Table 15-1: Response to Requests for Submission of Materials

Table 15-2: Response to Requests for Comments on Draft Specifications

Under the current WTO Agreement on Government Procurement, the period for receiving tenders from the date of publication of the Notice of Invitation to Tender is set at a minimum of 40 days. However, as a voluntary measure, the Government of Japan's "Understanding on Government Procurement" issued in November 1991 stipulates that the period should be no less than 50 days. This measure has been in effect since 1 April 1992.
Looking at the average period for the receipt of tenders over the last five years shows that the period of 50 days or more has always been secured.

Table 16: Average period for the receipt of tenders

In order to explain the planned procurement published in the official gazette (kanpo) in greater detail, the Ministry of Foreign Affairs and each procurement entity sponsors government procurement seminars at the beginning of, or as early as possible in, the fiscal year. (The Ministry of Foreign Affairs sponsored a seminar on 22-23 April, 1999.)

Table 17: Attendance at Government Procurement Seminars

Table 18 incorporate data on top procurement entities and ratios in total procurement value accounted for by these entities.

Table 18: Entities with a large amount/number of procurement

Note: ( ) means proportion in the total value.