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2010 Vol.4
The Government Procurement System in Japan

2010/10/01

Reforms for proper government procurement have been made mainly with a thorough implementation of competitive bidding. While the Democratic administration in Japan maintains this trend, a comprehensive review of the outsourcing of public services, including the private financing initiative (PFI), designated management system, and marketization experiments, has started, alongside the procurement of goods and simple services and investigations into new methods of government procurement.
Such comprehensive review is deemed desirable from the standpoint of the ability to select an efficient government procurement method depending on the situation. However, in Japan, new procurement methods are not necessarily utilized even though relevant legal frameworks are in place.
In this context, this paper focuses on the outsourcing of public services through, for example, marketization experiments, which is considered to involve a particularly high number of issues in government procurement, and then points out problems hindering flexible selection of government procurement methods, and examines their solutions, referring to measures taken in the UK.
The following measures are proposed: (1) the provision of incentives to increase efficiency by choosing an appropriate government procurement method as seen in the UK’s comprehensive budgeting, along with the setting up of objectives regarding “top-down” efficiency improvement to promote voluntary actions by each government agency; (2) the expansion of the recipients of excess human resources that were involved in traditional services in order to secure the quality of services as well as to deal with excess human resources (based on the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) and the Efficiency and Relocation Support Programme (ERSP)); and (3) the provision of support to government agencies and promotion of their cooperation through establishing an office of government procurement in order to reduce the burden that they bear in using new procurement methods.
The purpose of this paper is to point out problems with the current system of government procurement. The author intends to continue studying such topics and examine more concrete measures in the next research project [[alternatively, “upcoming research” / “future work” ]].

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