DEVELOPMENT AND INNOVATIONS IN SCIENCE
International scientific-online conference
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ON THE JAPANESE EXPERIENCE IN PUBLIC PROCUREMENT
IMPLEMENTATION
Rejapov Saydulla Xikmatullayevich
Senior teacher in the Department of Finance of the Faculty of Economics
"ALFRAGANUS UNIVERSITY"
https://doi.org/10.5281/zenodo.13379637
Annotation
This article looks at the importance of the role of government
procurement in Japan. I tried to collect more information on how the
government handles its purchases, companies owned by the Japanese
government, and what tenders are available in Japan. The conclusions are based
on scientific literature and statistics from recent years.
Keywords:
government procurement, tenders, investments, goods,
services, suppliers, Kanpo, local government, JST, GPA, account, contract,
requirement.
Public Procurement Agreement, which came into force in January 1981,
establishes the rules for preventing discrimination between foreign and local
sources and dealing in the same way as Japanese citizens. This Agreement was
subsequently reviewed several times, and as a result of negotiations in the
Uruguayan round, changes were made to the treaty: 1) expanding the scope of
public procurement (applies to regional governments and a wider range).
persons associated with state bodies); 2) applying the Agreement for purchasing
services; and 3) introduction of a complaint review system regarding
procurement procedures. This Agreement, signed by 23 states, came into force
on January 1, 1996.
Most public procurement in Japan is carried out through selection
transactions with the participation of qualified suppliers. Those who are
interested in participating in the tender under the purchase agreements must
contact the relevant purchasing organization for qualifications. To increase your
chances of participating, potential suppliers are advised to apply in advance,
regardless of whether certain purchases have been announced or not.
The Japanese government has set out voluntary measures aimed at
increasing market access beyond what is set out in the WHO agreement on
public procurement.
Benefits of participating in public procurement
Tendering for government contracts in Japan may have a number of
advantages:
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1. Government agencies often pay higher than the market price for goods and
services.
2. There are a huge number of tender announcements annually (more than 1,35
million in 2013).
3. Less risk of non-payment by government agencies.
4. There can be a good PR for your company when you go outside of PS.
5. Many tenders do not differ between large and small companies; there is more
equal playing field.
1
Procedures for opening tender transactions. Tender offers are opened at
the specified time and place, with the participation of tender participants or
their trustees in a notice published in the official newspaper Canpo or in
corresponding publications at the local level. If the tender participants or their
trustees are not present, the customer's employees who have not participated in
the tender transactions must be witnesses. Tender offers submitted by unskilled
suppliers or violating tender requirements are found to be invalble and excluded
from participating in tender transactions. In this case, the tender participants
considered will be notified of refusal.
The procedure for issuing contracts. As a general rule, the contract is
given to the participant who submits the tender offer at the lowest price,
provided that the price does not exceed the pre-assessed highest price, taking
into account such criteria as the actual cost of the product purchased by the
purchasing organization. a similar transaction, balance of demand and offer,
complexity of purchase, quantity to purchase and delivery time. Such criteria
make tenders strong.
2
These measures include:
1. Clarifying the procedures for public procurement
2. Open tender procedures in principle
3. Public Procurement Information Dissemination Improved
These measures cover the procurement of goods and services by state
ministries and agencies and state-owned organizations. The main elements of
these measures include:
1. As for government ministries and departments, the standard
minimum purchase amount is SDR 100,000, the same as the one set by whose
revised Agreement on Public Procurement (GPA) was entered into force in April
2014. As for government-linked organizations, it was reduced to 100,000 SDR,
1
https://www.eu-japan.eu
2
https://www.jetro.go.jp
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which represents a greater level of openness than specified under the GPA (the
standard minimum under this contract is 130,000 SDR).
2. Independent measures (JST-plus measures) have been identified on
contracts over 800,000 SDR that are not included in the public procurement
agreement. These include providing procurement information (through
seminars and the like) ahead of tender transactions, arrangements for potential
suppliers to submit requests for materials for market study, and arrangements
for granting requests to potential suppliers for comment on specification
proposals.
3
The statistics are only indicative because they are limited to the
procurement of goods and services by national government structures and
directly affiliated organizations that exceed the 100,000 SDR limit that
collaborated with the annual survey.
Figure 1. The interests of EU companies in Japanese public procurement:
Share of goods and services provided in EU countries between 2010 and
2020
4
The Japanese government has created a "Challenge on Public
Procurement" system to improve transparency, fairness and competitiveness of
Japan's public procurement regulations. A supplier can file a complaint with the
3
https://www.jetro.go.jp
4
https://www.eu-japan.eu
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International scientific-online conference
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Public Procurement Review Board (GPRB) if it is suspected that any rule of any
related measures prescribed by the Public Procurement Agreement (GPA) or the
head of the Public Procurement Review Board has been breached. (CGPR).
Complaints can be filed for public procurement of goods and services of at least
100 000 SDR (16,000,000 yen) and construction services of at least 4,500,000
SDR (740,000,000 yen). GPRB is an established and objective and independent
supervisory div in accordance with the GMA, does not benefit from the results
of procurement and its members will be free of external influences during the
term of appointment. The general procedure for filing a complaint is below.
(Each government agency, in the case of the central government, has established
appropriate procedures for its own review system. Relevant information on
specific procedures for reviewing complaints can be obtained through the
official Kanpo newspaper and its equivalents at the local level. or through other
public procurement points
5
Figure 2. Japan's total defense budget (billions of dollars) and growth rate
(%), 2019 – 28
6
GlobalData's latest report reads: "Japan's defense market size and
trends, budget distribution, rules, basic acquisitions, competitive landscape and
forecast, by 2023-28, its defense acquisition costs are expected to grow steadily
and reach $53.8 billion by 2028. Annual growth rate of 5,9% in 2023-28. The
5
https://www.mofa.go.jp
6
https://asiapacificdefencereporter.com
DEVELOPMENT AND INNOVATIONS IN SCIENCE
International scientific-online conference
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growth of the defense budget is due to the significant modernization of defense
and continued investment in procurement plans
The Japanese government has allocated an additional budget of $ 6,3
billion in 2023 for the immediate launch of defense modernization programs,
higher than the base budget for 2020 and 2021. the capabilities of the country's
armed forces.
In addition to developing the Air Force, Japan also focused on increasing
its navy. In 2022, the Japan MoD announced its Defense Development Program
with the intention of replacing its fleet of older, less-skilled esmines and escorts
with advanced freights such as the Mogami category. He also plans to build new
class multi-tasking hidden fregates starting in the 2024 fiscal year. The country
is also developing a new class of Taigei (29SS) attack submarines for the
Japanese sea self-defense forces.
In conclusion, most government procurement in Japan is made through
selection transactions involving qualified suppliers. I can tell you that the
procedures for conducting tenders are complex, but there will be a huge number
of tenders every year. Procurement is checked by state ministries and agencies
and state-owned organizations.
References:
1.
https://www.eu-japan.eu
2.
https://www.jetro.go.jp
3.
https://www.jetro.go.jp
4.
https://www.eu-japan.eu
5.
https://www.mofa.go.jp
6.
https://asiapacificdefencereporter.com
