Procurement Risk:
Low
Score:
68/100
Government Policy
Q57
75/100
Does the country have legislation covering defence and security procurement with clauses specific to corruption risks, and are any items exempt from these laws?
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This indicator is not assigned a score in the GDI. Procurement is administered by the Acquisition, Technology & Logistics Agency (ATLA) (防衛装備庁), established on…
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The Antimonopoly Law and the Act on Elimination and Prevention of Involvement in Bid Rigging, etc. and Punishments for Acts by Employees that Harm…
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There is evidence that the legislation has been thoroughly implemented and followed for all defence procurement during the years covered by this research. According…
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Q58
75/100
Is the defence procurement cycle process, from assessment of needs, through contract implementation and sign-off, all the way to asset disposal, disclosed to the public?
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The assessment of needs, building on the National Security Strategy for overarching principles, National Defence Program Guidelines for the longer term, Mid-Term Defence Programs…
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The public has access to documents that outline Japan’s defence strategy and the weapons and equipment it needs to implement it (see Q11B). When…
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The Mid-Term Defence Program Guidelines (MTDP) are a key link in converting defence strategy into the weapons and equipment that are needed to implement…
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Q59
83/100
Are defence procurement oversight mechanisms in place and are these oversight mechanisms active and transparent?
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Japan’s procurement oversight institutions have a legally and organisationally founded independent status, and they follow formalised processes in their work. This protects them from…
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IGO’s mandate includes annual inspections that assess the efforts by defence institutions to prevent collusion. Its report of the annual inspection in 2018 suggested…
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IGO’s activity is evident in its annual reports, which can be downloaded from its website. The report of the 2018 regular inspection of bidding…
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The Government publishes comprehensive forward planning for potential purchases which extends 10-15 years. This is done through the production of several documents. One is…
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The Mid-Term Defense Program (MTDP) gives an overview of military procurement plans for the next five years. [1] It is publicly available on the…
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Procurement contracts that have been awarded by the Ministry of Defence (MOD) are announced on the website of the Acquisition, Technology & Logistics Agency…
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Procurement contracts that have been awarded by the Ministry of Defence are announced on the homepages of ATLA. This data is provided in excel…
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Capability Gap and Requirements Definition
Q62
88/100
What procedures and standards are companies required to have – such as compliance programmes and business conduct programmes – in order to be able to bid for work for the Ministry of Defence or armed forces?
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Businesses that wish to participate in open competition bidding for contracts with the Ministry of Defence (MOD) must first apply to the Ministry for…
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There is evidence that the content of the Guidance on Bidding and Contract is consistently implemented. The Guidance is posted on Acquisition, Technology &…
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Q63
75/100
Are procurement requirements derived from a national defence and security strategy, and are procurement decisions well-audited? Are defence purchases based on clearly identified and quantified requirements?
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Japanese defence policy builds on its national security strategy document, which the Government adopted in 2013. [1] National Defense Program Guidelines (NDPG) advise on…
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The Diet conducts some scrutiny of defence procurement when it audits the annual accounts. Each House of the Diet audits the settlement of accounts…
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In the NDPG for FY 2019 –, the types of defence assets that Japan should procure are described, and an annex table on the…
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Tender Solicitation, Assessment and Contract Award
Q64
50/100
Is defence procurement generally conducted as open competition or is there a significant element of single-sourcing (that is, without competition)?
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Aggregate information on defence procurement contract types is not available from Japan. The Japan assessment in TI’s Government Defence Anti-Corruption Index 2015 cited a…
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Japanese contracts that give rise to public spending build on the Public Accounting Act. Article 29-3 item 1 of this act specifies that such…
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Q65
58/100
Are tender boards subject to regulations and codes of conduct and are their decisions subject to independent audit to ensure due process and fairness?
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Different types of defence equipment are selected through different procedures. The Ministry of Finance found that the procedures for selecting major types of equipment…
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Information on which officials were involved in selecting suppliers, designing tender specifications and awarding contracts is not disclosed to the public. This information is…
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As pointed out in a report by the Ministry of Finance, procedures for the selection of aircraft by the Ministry of Defence [1] require…
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A circular on procuring aircraft provides some procedures for external verification of tender specifications, whereas two circulars on procurement by the MSDF provide none.…
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Q66
100/100
Does the country have legislation in place to discourage and punish collusion between bidders for defence and security contracts?
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Japan has legislation that prohibits collusion between bidders as well as between an official and a bidder. [1] This legislation applies to the defence…
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According to the “Guidance on Tender and Contract”, companies that have obstructed fair trade are to lose their status as qualified bidders for a…
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Only one case of suspected collusive bidding, for the tenders that ATLA had called for, was found in the mainstream newspapers Asahi Shimbun [1]…
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The Administrative Vice-Minister of Defence issued a circular on October 1, 2015, with instructions that all personnel who work with procurement are to receive…
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Contract Delivery and In-Service Support
Q67
56/100
Are there mechanisms and procedures that ensure that contractors meet their obligations on reporting and delivery?
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Formal policies and procedures for monitoring and assessing a supplier’s service and delivery obligations are described in the Acquisition, Technology & Logistics Agency (ATLA)’s…
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Contracts are available on the websites of ATLA (for central procurement) [1] and of procuring institutions under the Regional Defence Bureaus (for regional procurement).…
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“An outline of central procurement” contains details about ATLA’s and the Regional Defence Bureaus’ monitoring of the engineering work and cost prices of defence…
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The “Guidance on Bidding and Contract” has clear rules for how to handle breaches of contract. In some cases, the MOD may pay a…
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Q68
NEI/100
Are there mechanisms in place to allow companies to complain about perceived malpractice in procurement, and are companies protected from discrimination when they use these mechanisms?
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A few descriptions were found of formal complaints mechanisms in a search of open sources. The Ministry of Defence (MOD)’s whistleblower apparatus is meant…
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No price is given in the “Guidance on bidding and contracts” for having ATLA handle complaints, although the guidance does give the size of…
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The websites of the Japanese MOD, [1] ATLA, [2] all nine Regional Defence Bureaus [3] and the mainstream national newspapers Asahi Shimbun, [4] Nikkei…
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Key pieces of Japanese legislation make bribery and corruption by private companies clearly illegal. The Penal Code prohibits bribery of Japanese officials. In addition,…
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One case of suspected collusive bidding, for the tenders that ATLA had called for was found in a search of the mainstream newspapers Asahi…
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Bribery of a Japanese public official can be punished with exclusion and prosecution. Under the Penal Code, individuals can get a penalty of up…
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Offset Contracts
Q70
50/100
When negotiating offset contracts, does the government specifically address corruption risk by imposing anti-corruption due diligence on contractors and third parties?
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Japan became a party to the WTO’s Agreement on Government Procurement on January 1, 1996. [1] The use of offsets is explicitly prohibited in…
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There is a lack of transparency about defence procurement contracts with foreign governments and/or companies that include Japanese domestic production (see Q71B). A search…
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The monitoring of production by a Japanese subcontractor for defence equipment that Japan procures from a foreign government and/or company is only moderately transparent…
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When the Government of Japan concludes a large defence procurement contract with a foreign government and/or company that includes Japanese domestic production, it will…
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In the general case, an official from ATLA or a Regional Defence Bureau is to make a completion inspection when a defence product is…
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In the case of the production of F-35A components, some of the work done by Japanese subcontractors was insufficient. Some of their components were…
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The Japanese subcontractor contracts are all single source contracts. Such contracts contradict the general principle that public procurement should be determined through competitive bidding,…
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Agents / Brokers
Q73
75/100
How strongly does the government control the company’s use of agents and intermediaries in the procurement cycle?
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General imports of defence equipment from foreign (often US) manufacturers, which is distinct from imports through Foreign Military Sales (FMS) managed by the US…
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The Ministry of Defence introduced several measures in 2008 to prevent corruption by trading houses that act as agents when the Ministry imports defence…
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Financing Package
Q74
0/100
Are the principal aspects of the financing package surrounding major arms deals, (such as payment timelines, interest rates, commercial loans or export credit agreements) made publicly available prior to the signing of contracts?
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Key information on public procurement is published in monthly summaries of contracts published on the websites of the procuring institutions within the Ministry of…
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Seller Influence
Q75
NS/100
How common is it for defence acquisition decisions to be based on political influence by selling nations?
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This indicator is not assigned a score in the GDI. Imports of defence equipment through FMS managed by the US Government made up about…
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This indicator is not assigned a score in the GDI. The amount of information given by the Government of Japan on the military needs…
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This indicator is not assigned a score in the GDI. No reports of domestic political pressures resulting in acquisition of defence equipment contrary to…
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