Public Procurement System

in JAPAN

23 November 2011

Yasushi Kawanai

Japan Construction Information Center

Japan Construction Information Center

Japanese e-tendering System for public

procurement

2 Stories, for Central government and for Local governments

The original system was developed and carried out from 2001 in the public works already. And now over 50,000 tenders are executed in a year by this system in many government organizations.

As for the local, e-tendering system was adopted at 47 all prefectural local governments already and carried out from 2004 in a big projects.

Central

government

Local

government

and

Transparent process, fair & justice of public procurement

JACIC is

・My organization was a government agency controlled by MLIT (Ministry of Land, Infrastructure, Transportation and Tourism )to develop the 2 bidding systems. (It is now a kind of non-profit organization.)

・MLIT ordered JACIC to develop the e-bidding systems in 1999 and JACIC established a consortium to develop the system. Government budget was about half then. Other half was from system vender companies and others.

・On the other hand, the system for the local government was developed by JACIC for the own business under the MLIT’s supporting.

MLIT

JACIC

1.National Government System

Development by a Consortium

MLIT

Consortium

System specifications

Provision conditions

Development

IT Vendors

e-Tendering

System

by MLIT

JACIC

Know-how personnel

operating funds

After the development,

Nov. 13 2001 - First Electronic Tender Opening

e-Bidding for National Projects

(MLIT) year by year

• FY2001 about 100 Tenders

• FY2002 about 2,000 Tenders

• FY2003 All Jobs by MLIT into IT

(about 30,000)

Now over 50,000 Tenders

<Purchaser>

Disclosure of bidding results

Reading and selection

Qualification examination documents

Application for

qualification examination

Bidding

Notice of successful bidding

Notice of qualification check

Bidding announcement

Qualification check

Distribution of

bidding documents

Browsing

e-Bidding Price setting

Plan and estimate for implementation

Preparation of detailed work cost estimate sheet and bid documents

PPI

Bid opening

<Bid Participants>

E-Bidding business flow (directly)

PPI

※We has not changed the tendering process from the old paper way.

PPI web site (free site by JACIC)

※But tendering process is not changed, just transferred into

Information Technology.

Some other Systems supported this e-procurement

/PPI ; Just now mentioned

/Security IC card systems. (for bidders)

/Accident support stuff.

/Design and Construction Records

Information Systems (for P.Q.)

Supported Field

Construction

Service (Consulting service

for construction)

Goods &

Others service

■ Open bidding

■ Publicly-invited, selective bidding

■ Selective bidding

■ Work-specified selective bidding

■ Optional contract

■ Publicly-invited competitive bidding

■ Simple public invitation type selective bidding

■ Selective bidding

■ Publicly-invited proposal

■ Simple public invitation type designated proposal

■ Standard proposal

■ Optional contract

■ Open competitive bidding

■ Designated competitive bidding

■ Optional contract

2.About Local System (for the 2nd stage)

• =[Core System standard] by JACIC

e-Tendering Core System

The core part of the e-Tendering

software, which has high flexibility

and can be applied to multiple

public purchasers.

e-Tendering System

Core

Based on the first original National System

If each body would develop it,

Purchaser

Bidders

Bidders

Bidders

Bidders

Bidders

Purchaser Purchaser Purchaser Purchaser

Electronic Bidding System

Many Interfaces

Many IC cards

they have to prepare many cards for each

Standardization

Purchaser

Tenderer

Tenderer

Tenderer

Tenderer

Tenderer

Purchaser Purchaser Purchaser Purchaser

Core Core Core Core Core

Common

Interface

Electronic Tendering

Systems

Standard Systems

※It would be cheaper for each body

than individual development

Core system structure

e-bidding core system

Core Section Customizable Section

Common bid functions （Non customizable）

・Bidding specific Program Components ・Security Function（PKI etc.）

User can customize

・Screen Design ・Forms Design etc.

• The basic functions required for e-Bidding are implemented in the

“Core Section”.

• The “Customizable Section” allows screen design changes and free

modifications to linkage function with related systems.

Some specific features of this systems

1.for the local government

It would be cheaper than their individual development

2.JACIC’s own cost

3. Unified standard or tools were also of bidders’ hope

3.[Core system] doesn’t mean some actual hard systems

Specification only (JACIC business model)

There are large venders in JAPAN for the e-bidding system from that time.

/ HITACHI,

/TOSHIBA,

/FUJITSU,

/NEC (Nippon Electric Company) …etc.

Local Government now

Purchase & Under procedure

・Prefecture 46/47

・Ordinance-designated city 18/19

・City etc. 12

※JACIC System was strong against the competitive systems.

Organizations introducing

e-Bidding Core System now

Central Government Organs (8) ・ Ministry of Land, Infrastructure, and Transport ・ Ministry of Finance ・ Ministry of Education, Culture, Sports, Science

and Technology ・ Ministry of Health, Labour and Welfare ・ Ministry of Agriculture, Forestry and Fisheries ・ Ministry of Defense ・ Cabinet Office (Okinawa）

※The standard of e-bidding system is now almost one standard in the field of public procurement.

Spread of the core system

（2011.9.1）

Group Core System Users Group total

Governments 7 ３０

Public corporations ９ １００

Prefectures ４６ ４７

Government-decreed cities １８ １９

Municipalities ４０９ １７０４

Total ５１４ ２０００

Others ２５ １００

JACIC business for the core system

（user license)

Installation

the core system

Shared system

Prefectures and municipalities

Between municipalities

Individual system

Self development

ASP（Application service provider）

Self development

ASP

This standard is authorized on CEFACT

UN/ECE

ATG： Applied Technologies Group

ICG： Information Content Management Group

TBG： International Trade and Business

Processes Group

TMG： Techniques and Methodologies Group

LG： Legal Group

TBG1 ： Supply Chain Management

TGB2 ： Digital Papers

TBG3 ： Transportation

TBG4 ： Customs

TBG5 ： Finance

TBG6 ：

TBG7 ： Statistics

TBG8 ： Insurance

TBG9 ： Travel, Tourism & Leisure

TBG10： Healthcare

TBG11： Social Security, Employment & Safety

TBG12： Accounting & Auditing

TBG13： Environmental Management

TBG14： Business Process Analysis

TBG15： International Trade Facilitation

TBG16： EDIFACT Entry Point

TBG17： Harmonization & Documentation

TBG18： Agricultural

TBG19： eGovernment

TBG

UN/CEFACT TBG6：Architecture, Engineering & Construction

e-Tendering Project

I would like the Handbook in this conferences

to check and remark the tendering process of this UN/CEFACT, also, that is designated in BRS (Business Requirement Specification) &, RSM

( Requirement Specification Mapping.)

I think it is not difficult to follow this standards because it is very basic specification.

BRS： http://www.unece.org/hk/cefact/brs/brs_index.html

RSM：http://www.unece.org/cefact/rsm/rsm_index.html

Conclusion, Important points

for the starting of e-bidding systems.

1.To make the e-tender process clear in order to

meet the domestic conditions under consensus. Concept process.

2. Strong leadership of government

3.Setting up promoting bodies. Committee or agency, not government bodies.

4. Step by step Introduction, from pilot projects.

5. To learn from other countries, system venders and international organizations.

Thank You for your Attention !

What JACIC could help it for ?

JACIC is not consultant group for the foreign

countries.

We cannot help the starting countries so directly.

It is not our organization’s duty.

I understand that JACIC needs formal request through Ministry of Foreign Affairs whose web site is below.

http://www.mofa.go.jp/index.html

And then, we could do something, for example, to receive the delegation of research.

※ Japanese Back ground

GDP vs Invest. in Const.

0

100

200

300

400

500

600

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

year

trill

ion

Yen

GDP

invest. in const.

１０．０％

１７．６％

ＧＤＰ ｖｓ Ｉｎｖｅｓｔ．Ｉｎ Ｃｏｎｓｔ．

Source: Homepages of ministries

Ministry of Land, Infrastructure and Transport (MLIT)

Ministry of Agriculture, Forestry and Fisheries and other ministries

¥0.9 Trillion

¥4.9 Trillion

Grand Total ¥5.8 Trillion

(National Budget ¥60 Trillion)

FY 2010 National Budget for Public Works in Japan (Not including supplementary budgets)

Public Works of Japan

Gross Construction Investment , Number of Employees in Construction Industry ,

Number of Licensed Construction Contractors

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

'76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04

(trillion yen)

0

100

200

300

400

500

600

700

800

900

Private Construction Investment (trillion yen)

Government Construction Investment (trillion yen)

Number of Licensed Construction Contractors (1,000 number)

Number of Employees in Construction Industry (10,000 Person)

(1,000 number ,10,000 Person)

(fiscalyear)

＜peak of construction investment＞('92)

84 .0

584559

51 .9

20 .4

31 .5

685

601

35 ,2

55 .7

＜peak of private construction

investment＞('90)

＜peak of government construction

investment＞('95)

＜peak of number of employee＞（Average

of '97 )

＜peak of mumber of licenced

construction contractors＞

('00.3.31)

▲39.0％

▲36.9％

▲38.2％

＋5.3％

Comparison with the 1992 fiscal

year (peak of construction

investment)

e-Japan Strategy in 2000 and CALS/EC

e-Japan Strategy Jan 2001

e-Japan Strategy II July 2003

e-Japan Strategy II Accelerating Package

Feb 2004

IT Basic Law IT Strategic Head Office (Chair: Prime Minister)

2001 2002 2003 2004 2005

e-Japan Priority Plan (Mar 2001)

e-Japan Priority Plan 2004 (June 2004)

e-Japan Priority Plan 2003 (Aug 2003)

e-Japan Priority Plan 2002 (Jun 2002)

Preparation of

Infrastructure

Focusing on ICT Use

(Leading 7 areas)

Clarify Priority Measures to reach ICT Country

A: Global Strategy

B: Security

C: Contents

D: ICT Deregulation

E: Assessment

F: e-Gov & e-Rural Gov To overcome issues towards the Highest-level ICT country by 2005

Courtesy of Mr. Ito (JASTRO)

CALS/EC

as a part of e-Government Strategy

Central Government

Ministry of Land, Infrastructure and

Transport (MLIT)

Announced “Millenium Project” (October 1999)

Established “IT Strategy Headquarters” in the Cabinet

(July 2000)

Announced “e-Japan Strategy” (January 2001)

Announced “e-Japan Strategy Ⅱ” (July 2003)

Announced “Construction CALS Implementation Vision”

(April 1996)

Established “CALS/EC Promotion Headquarters” (May 2001)

Revised CALS/EC Action Program (March 2002)

Construction CALS/EC in Japan survey

design

Bidding

Contract

build O/M

Phase 1

’96-’98

Standardization

for document &

Forms

Start e-bidding Digitized-photos -

Phase 2

’99-01

Start e-delivery e-bidding

Start e-delivery (e-note)

Phase 3

’02-’04

full e-delivery full e-bidding,

Down loading of

documents and

design

e-contract

full e-delivery

Information –

sharing

(optical

fiber using

GIS)

Yearly Targets for Local Promotion