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?

This Agreement offers new opportunities for American (and other foreign) telecommunications companies to sell their products and services to central government entities and quasi-governmental organizations in Japan.

The Japanese Government agreed that its public sector procurement procedures for telecommunications products and services would be non-discriminatory, transparent, competitive and open to all foreign suppliers. Foreign companies would be entitled to the fair, "national" treatment that is given to Japanese firms competing for the same procurement opportunities. In other words, the Japanese Government has committed itself not to favor Japanese firms over foreign suppliers with regard to procurement covered by the Agreement.

The Agreement was concluded on November 1, 1994. The measure is still in force and has no expiration date. However, the consultative mechanism allowing the two countries to meet formally on an annual basis to discuss the measures expired on March 31, 2001.

Who benefits from this Agreement?

Any American (or other foreign) company interested in exporting telecommunications products or services to Japan's public sector can benefit from the procurement opportunities covered by this Agreement.

How can this Agreement help my company?

Organizations and Products Covered

The 31 central government entities that are covered by this Agreement are listed in Annex 1, and the more than 80 quasi-governmental organizations are listed in Annex 2. The specific products and services that are covered by the Agreement are listed in Annex 3 .

The Agreement applies to the purchase, lease, or rent of telecommunications products and services valued at not less than 100,000 Special Drawing Rights (SDRs), or approximately $73,000. (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 the Special Drawing Rights by calling the International Monetary Fund at (202) 623-7171.)

Notice of Procurement Opportunities

The Agreement requires publication of a notice of procurement -- with sufficient information for a supplier to make an informed decision -- in the Kanpo, Japan's official gazette (similar to the Federal Register). It contains not only procurement notices but also important information on the bid-tender process. Exporters can purchase the Kanpo at selected bookstores in major cities worldwide. Procurement opportunities at the local and prefectural level appear in local and prefectural official gazettes, which can be purchased in local-government and other designated bookstores.

The Japanese Government also makes central government tender information available electronically through the Japan External Trade Organization (JETRO) , a quasi- governmental organization attached to the Japanese Ministry of International Trade and Industry. This information can be obtained via the International Government Procurement web site of the Department of Commerce's Office of Trade Agreements Negotiations and Compliance. JETRO serves as an information clearinghouse that disseminates information on trade opportunities to foreign companies interested in doing business in Japan.

Procurement notices and other relevant information can also be obtained directly from the Japanese government ministries and quasi-governmental organizations listed in Annexes 1 and 2 of the Agreement.

Under this Agreement, Japanese procuring entities must generally make their procurement notices public at least 50 days (but not less than 40 days) before the bid's submission deadline. The Notice of Procurement must include sufficient information for a potential supplier to make an informed decision as to whether to participate in the procurement. Procuring entities will use tender documents to communicate their needs to suppliers and to solicit tenders from them, and will make this documentation available at the time of publication of the Notice of Procurement. Under the Agreement, procuring entities must prepare the tender documentation in an impartial manner so as to ensure that equal opportunities are provided to all suppliers on a non-discriminatory basis.

Basis for Awarding Contracts

Under the Agreement, tenders are evaluated on the basis of the criteria stated in the specifications, and contracts are awarded to the lowest-priced tender which meets the criteria. The Agreement also establishes a process for certain contracts to be awarded on the basis of an "overall greatest value methodology" (OGVM). Under this methodology, factors such as function and performance are considered -- in addition to price -- in determining the overall greatest value to the procuring or purchasing entity. The Agreement provides that the OGVM must be used for the following:

procurement of modified or specially-developed products or services;

procurement of off-the-shelf products with a value greater than 385,000 SDRs (approximately $280,000), except in cases where off-the-shelf products or services with a unit value of 500 SDRs (approximately $360) or below are being procured in high volume; or

all procurement with a value greater than 385,000 SDRs (approximately $280,000) when established specifications need to be repeatedly used to ensure compatibility with already existing equipment.

Although Japanese entities may elect to use the OGVM for other types of procurement, other contracts are normally awarded on the basis of lowest price.

When a contract is awarded, the procuring entity will publish the award notice in the Kanpo and all suppliers will be told who was selected and the award price. Finally, all candidates whose procurement bids were not selected have the right to ask the procuring entity the reasons why their bids were not chosen.

Technical Specifications

The Agreement provides that technical specifications will be based, where appropriate, on performance rather than design or descriptive characteristics, and on international standards where such exist.

Japan's Bid Challenge System

If you believe that the Government of Japan has not complied with its procurement obligations under this Agreement, you are encouraged to seek resolution of the complaint under Japan's bid challenge system. Complaints regarding central government procurement procedures should be filed with the Secretariat of the Government Procurement Review Board in CHANS (Office for Government Procurement Challenge System). In the case of complaints at the prefectural or municipal level, firms should contact the respective local entity.

Local Government

The Agreement obligates the central government to encourage Japan's 47 prefectural governments and 12 designated cities (cities with populations of over 500,000) to follow procedures similar to those in this Agreement for the procurement of telecommunications products and services valued at not less than 200,000 SDRs (approximately $146,000). Normally, local governments are required to award bids on the basis of lowest price. In February 1999, however, the Japanese Government authorized its local governments to use the overall greatest value methodology.

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

Yes. If your company is experiencing difficulties exporting under this Agreement, contact the Office of Trade Agreements Negotiations and Compliance at the U.S. Department of Commerce. The Center can help you understand your rights under this Agreement, and it can activate the U.S. Government to make official inquiries with Japanese authorities that could help you resolve the problems you may have encountered.

In addition, this Agreement is routinely monitored, and officials from both countries hold regular consultations to review its progress. Specific complaints are sometimes raised in these meetings.

How can I get more information?

The complete text of the Agreement on Public Sector Procurement of Telecommunications Products and Services is available from the Office of Trade Agreements Negotiations and Compliances 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 -

Japan Public Sector Procurement Of Telecommunications Products And Services Agreement

Office of Health and Information Technologies

U.S. Department of Commerce

14th Street & Constitution Avenue, N.W.

Washington, D.C. 20230

Phone: (202) 482 - 1512

Fax: (202) 482 - 5522

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 Office of Health and Information Technologies Home Page Located in the International Trade Administration, the Office of Health and Information Technologies (OHIT) helps U.S. companies increase international sales and overseas business opportunities in the health and information technology sectors of computers and networking equipment, microelectronics, telecommunications, instrumentation, medical devices, pharmaceuticals and Health IT by monitoring business and economic trends in the health and IT industries and providing data on trade and global markets and influencing the development of U.S. trade policy in these sectors.

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.