E N F O R C E M E N T   AND   C O M P L I A N C E

Click here for the Trade Agreement


What is this Agreement and what does it do?

Who benefits from this Agreement?

How can this Agreement help my company?

Can the U.S. Government help me if I have a problem?

How can I get more information?

What is this Agreement and what does it do?

The U.S.-Japan Public Works Agreement incorporates measures aimed at reforming bidding and contracting procedures for public works procurement in Japan in order to enhance transparency, objectivity and competition, and to strengthen the application of the principle of nondiscrimination. The Agreement provides that Japan's central government and quasi-governmental entities will use open and competitive bidding procedures to procure construction, design and consulting services for public works, and that prefectural governments and the governments of Japan's twelve largest cities will be "encouraged" to use similar procedures. The Agreement only applies to public works, not private sector projects, and it only applies to services, not goods.

The Public Works Agreement is in the form of an exchange of letters dated January 19, 1994, between the Japanese Ambassador to the United States and the U.S. Secretary of Commerce. The exchange incorporates a Japanese Government's Action Plan on Reform of the Bidding and Contracting Procedures for Public Works. The Agreement has no expiration date.

Who benefits from this Agreement?

Any U.S. company that is interested in providing construction, design or consulting services to Japan's public works sector can benefit from this Agreement.

How can this Agreement help my company?

The Agreement applies to public works procurement by the central government and quasi-governmental entities that Japan has listed in Appendix I (offsite link) to the WTO Agreement on Government Procurement. To be covered by the Public Works Agreement, the value of each contract must be greater than the following thresholds, which are denominated in Special Drawing Rights (SDRs). A Special Drawing Right is the value of a weighted basket of currencies calculated daily by the International Monetary Fund (IMF). It is used between IMF-member states to settle international business transactions. You can obtain the daily value of a Special Drawing Right by calling the International Monetary Fund at (202) 623-7171.

Procurement by central government entities:

-Construction: 4,500,000 SDRs (approximately $5,805,000)

-Design and Consulting: 450,000 SDRs (approximately $580,500)

Procurement by quasi-governmental agencies:

-Construction: 15,000,000 SDRs (approximately $19,425,000)

-Design and Consulting: 450,000 SDRs (approximately $580,500)

The Agreement describes in detail the "open and competitive bidding procedures" that central government and quasi-governmental entities will use when they procure construction services for public works, and the "public invitation procedures" that they will use to procure design and consulting services. These procedures have replaced the designated bidder system used previously.

For construction services, procuring entities publish a notice in the Kanpo, Japan's official gazette (similar to the Federal Register), that a procurement procedure has been initiated. Exporters can purchase the Kanpo at certain bookstores in major cities worldwide. (Note: the Kanpo is in the Japanese language.) The notice contains information on the construction project, the qualifications that are required for a company to participate, how companies should submit bids, deadlines and a contact point. Detailed information can be obtained from the contact point. A company can only submit a bid after its qualifications have been confirmed by the project's commissioning entity. The period between the public notice and the bidding must be at least 40 days. The Agreement states that the contract will be awarded to the company that submits the lowest bid below the ceiling price. The commissioning entity publishes the name of the winner as soon as possible after the contract has been awarded.

For design and consulting services, notices are also published in the Kanpo. Companies that wish to submit proposals must be registered by the commissioning entity. Bidders "express interest" in the project in accordance with procedures outlined in the bidding documentation, and the commissioning entity invites companies, from those that have expressed interest, to submit proposals. The best proposal is selected in accordance with published evaluation criteria.

Disputes involving construction, design and services contracts covered by the Agreement can be handled under the Government Procurement Review Board procedures established by the Government of Japan in accordance with the WTO Government Procurement Agreement.

The Agreement concludes with a list of preventive measures that the Japanese Government agreed to take in order to combat unfair practices and "dango" (bid-rigging). These include: strengthening the penalties for unfair practices; disqualifying companies that have engaged in unfair practices from participating in public works projects; strict enforcement of Japan's Anti-Monopoly Act; increased cooperation between commissioning entities and Japan's Fair Trade Commission; and forbidding commissioning entities from issuing technical specifications designed to disadvantage specific suppliers.

Can the U.S. Government help me if I have a problem?

Yes. If your company is experiencing difficulties providing construction, design or consulting services to Japan's public works market and you believe that Japan is not complying with this Agreement, contact the Office of Trade Agreements Negotiations and Compliance's hotline at the U.S. Department of Commerce. The Center can help you understand your rights and Japan's obligations under the Agreement, and it can alert the appropriate U.S. Government officials to help you resolve your problem. With your concurrence, the U.S. Government can, if appropriate, also raise the particular facts of your situation with the Japanese government and ask Japanese officials to review the matter.

How can I get more information?

The complete text of the U.S.-Japan Public Works Agreement is available on the Office of Trade Agreements Negotiations and Compliance's web site.

If you have questions about this Agreement or how to use it, you can e-mail the Office of Trade Agreements Negotiations and Compliance (TANC), which will forward your message to the Commerce Department's Designated Monitoring Officer for the Agreement. You can also contact the Designated Monitoring Officer at the following address:

Designated Monitoring Officer -

U.S.-Japan Public Works Agreement

Office of East Asia and APEC

U.S. Department of Commerce

14th Street & Constitution Avenue, N.W.

Washington, D.C. 20230

Phone: (202) 482-1147

Fax: (202) 482 - 3316

The Designated Monitoring Officer can also provide you with useful trade leads and contacts.

You can obtain additional information by visiting the following web sites in the International Trade Administration of the Department of Commerce:

The U.S. Commercial Service, American Embassy, Tokyo

The American Embassy in Tokyo helps U.S. companies enter the Japanese market and expand their sales there.

The International Government Procurement web site

of the Department of Commerce's Trade Agreements Negotiations and Compliance contains general information on international government procurement opportunities.

TANC offers these agreements electronically as a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.