Action Program on Government Procurement

Decision of the 20th Meeting of the Committee for
Drawing Up and Promoting the Action Program

The Government of Japan, in order to ensure even further transparent, fair and competitive procurement procedures, and to further facilitate market entry by competitive domestic and foreign suppliers in Japanese government procurement, has voluntarily decided upon the Action Program on Government Procurement, as outlined herein.

ACTION PROGRAM ON GOVERNMENT PROCUREMENT

A range of efforts has been made to ensure that non-discriminatory, transparent and fair competitive procedures are taken in Japanese government procurement. In order to ensure even further transparent, fair and competitive procurement procedures, and to further facilitate market entry by competitive domestic and foreign suppliers, the following measures will be taken:

I. Fundamental reform of procurement procedures

1. Thorough transparency in procurement procedures In order to achieve further transparency in government procurement, the Government of Japan will formulate procedures covering government procurement in all product areas (all procurement items and sectors covered under the GATT Agreement on Government Procurement) within the current fiscal year.
   The following points will be considered in that formulation:

   (1) In addition to reconfirming that government procurement should be conducted principally through open tendering procedures, efforts will be made to simplify, rationalize and streamline the procurement procedures, bearing in mind the necessity to ensure fair opportunities for competitive participation by potential suppliers through such measures as the establishment of pre-tender invitation procedures for certain contracts, taking into consideration their thresholds and the nature of products.

   (2) For procurement through selective tendering procedures, while securing fair opportunities in all stages of procurement, transparency and fairness will be ensured by such measures as disclosure of the names of designated suppliers.

   (3) In the event that there is no choice but to resort to single tendering procedures, transparency and fairness in the process of choosing single tendering procedures, by making it a principle to publish a planned notification of single tendering in Kanpo (the official Government gazette), for the procurement conditions for contracts exceeding a set amount.

2. Thorough implementation of open tendering procedures

   (1) Open tendering procedures will be used to the greatest extent possible, in accordance with the spirit of the current system, under which the use of open tendering procedures is set as the principal procedure.

   (2) A review of the use of selective tendering procedures will be conducted. Even for cases in which, due to the nature of the products in question, certain restrictions are imposed on qualifications for participation, fixed objective criteria for qualifications to participate in competitive bidding will be established and the principle of open tendering procedures allowing all who meet that criteria to participate in competitive bidding will be applied, as a principle.
   Even in the event that there is no choice but to resort to selective tendering procedures, in order to prevent inordinate designation of any specific contractor, efforts will be made for adequate operation of selective tendering procedures.

   (3) In addition to making efforts to implement stricter procedures to ensure that procurement through single tendering procedures is only applied to exceptional cases, as specified in the Agreement on Government Procurement, procurement entities will make efforts to reduce the number of contracts offered through single tendering procedures by reviewing single tendering procedures through such efforts as continuing to enhance internal investigative regimes.

3. Improving procedures for qualifications

   (1) In order to reduce the burden of applicants and to rationalize the approval process, thorough implementation of a unified process for qualifications will be made. The application forms for qualification will be simplified and unified. Furthermore, through the establishment of a coordinating meeting, criteria for qualification among Government ministries and agencies will be unified.

   (2) In order to secure transparency and fairness in the qualification system, lists of qualified suppliers (at least showing the names of suppliers) will be made public by such measures as allowing for the reading of lists, upon request. The contact point for accessing such lists will be notified in Kanpo.

4. Improving methods for awarding contracts
   Application of the overall-greatest-value evaluation method for procurement of computer products, computer services, and other necessary cases when the lowest-price-award method is not adequate will be encouraged. For this, as the need develops, procurement entities will consider and develop objective criteria for the overall-greatest-value evaluation method in these sectors, and if it is appropriate, such criteria will be shared throughout the government.

II. Improving methods for public notification of information on government procurement

1. In order to supply information on procurement in a more convenient manner to suppliers interested in government procurement, and to expand opportunities for potential suppliers to make bids, the current system of posting notice in Kanpo will be changed, and an additional Government Procurement Kanpo which comprises government procurement-related notifications will be issued as government procurement notice.
   
   
2. In order to secure transparency in contracting procedures of government procurement, in addition to the current individual-public notification system, a new annual report on government procurement results comprising individual procurement results (information on individual awards and information on contracts through single tendering procedures) will be issued.

III. Improving the dissemination of information on government procurement

1. In addition to making efforts to enhance the broad dissemination of information related to bidding opportunities for foreign suppliers and others, procurement entities will give full consideration to responding promptly and accurately to inquiries from foreign suppliers and others concerning contractual procedures such as qualifications for participation in competitive bidding and submission of tenders, as well as to requests for various information on procurement.
   
   
2. A database will be created for information related to government procurement listed in the additional Government Procurement Kanpo (government procurement notice), and will be widely supplied to domestic and foreign firms, including Japan-based foreign-capitalized firms, which are interested in government procurement, at the Business Support Center of the Japan External Trade Organization (JETRO), local trade information centers and others.
   
   
3. The threshold for contracts which must be publicly notified in Government Procurement Kanpo (government procurement notice) at the beginning of the fiscal year will be lowered from 1,000,000 SDR to 800,000 SDR. At the seminar on government procurement held at the beginning of each fiscal year, explanations will be provided as much as possible, with due reservations regarding the budgetary system, on prospects of government procurement. Furthermore, in order to provide suppliers with more detailed information, each government ministry and agency will hold seminars as necessary.

IV. Establishment of a review body and complaint mechanism

V. Ensuring the effectiveness of this Action Program

1. In order to thoroughly enhance prevention of "dango" practices in public tendering by corporations and groups of corporations, the Fair Trade Commission (FTC) will formulate a Guideline for Public Tendering (provisional name).
   Furthermore, in order to ensure that no actions contrary to the Anti-Monopoly Act are taken in tendering, procurement entities will maintain close contact with the Fair Trade Commission and strict application of the relevant laws and ordinances will be made for anti-competitive actions. Procurement entities will strive to establish an effective communications channel for information related to anti-competitive actions.
2. The Management and Coordination Agency will make efforts to implement effective administrative inspection in order to ensure transparency and fairness in government procurement procedures.

VI. Scope of application

1. This Action Program will cover procurement, thresholds and entities as determined according to "the Outline of Action Program" set out in 1985 and "the Arrangement on Government Procurement" set out in 1991.
   
   
2. Entities which will newly be subject to the GATT Agreement on Government Procurement as a result of negotiations for its revision will be covered by this Action Program as soon as the proper preparations are made. Further, concerning procurement which is to be newly subject to the new GATT Agreement on Government Procurement, voluntary measures meeting the stipulations of the new GATT agreement will be adopted as soon as the proper preparations are made.

   Note: Voluntary measures in the above-mentioned areas have already been formulated for construction services as well as design and consulting services in public works, under the Action Plan on Reform of the Bidding and Contracting Procedures for Public Works, approved by the Cabinet on 18 January 1994.

3. Even for procurement under the thresholds, procurement entities will make efforts to ensure transparency, fairness and competitiveness, and will seek to reduce the use of single tendering procedures. For this purpose, efforts will be made to assist domestic and foreign suppliers by promptly and accurately responding to inquiries, through establishing a more effective structure to smoothly respond to requests for information and consultations concerning procurement.

VII. Guidance and requests for cooperation

VIII. Review and follow-up of this Action Program