Public Procurement

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In order to be eligible to participate in bidding for government contracts for construction and design of public works an entirely different qualification system exists.  This system includes the ‘Business Matters Evaluation’ (keizai jikou shinsa); popularly know as keishin. The system is designed to ensure that Japan government entities are certain that the supplier is able to fulfil the contract it has concluded, which is of particular importance for often-larger scale construction projects.

In line with the WTO agreement on public procurement Japan has established  a complaints system, called CHANS. In practice, this system is seldom used since its establishment in 1996.  At the regional and local level, procuring entities have their own complaint procedures, primarily dealing with public works’ tenders.  Prefectures and designated cities have established ‘tender monitoring committees’  (nyuusatsu kanshi iinkai) usually consisting of specialists from academia and the legal profession.

Electronic bidding systems are rapidly becoming the norm in Japan, with many government organisations setting up designated portals to conduct all tender procedures online. The national government has integrated the various steps of the procurement process into one portal called GEPS. (www.geps.go.jp) 

The overall majority of tenders in Japan are evaluated on one criterion: - lowest price. The reasoning behind this is that all suppliers participating are deemed to possess the ability and skills to meet the conditions of the tender, ensured by the Supplier Qualification System.

Projected Price