Digital Agency Bid Monitoring Committee (3rd meeting)

Overview

Date: Wednesday, September 20, 2023
Location: Digital Agency Shared Conference Room
Name of Committee member (honorific title omitted, in alphabetical order):
- Ryota Kaneko, Professor, Faculty of Economics, Kokugakuin University
- Yoshiko Kawasawa, Representative Director, Social Policy Lab Co., Ltd.
- Yuichi Mochinaga Professor, Graduate School of Accounting, Waseda University
Period for deliberation: From October 1, 2022 to March 31, 2023
Number of extracted projects: 3 (220 target projects)
Number of proposals deliberated: 3

Materials

Proceedings Summary (PDF/169KB)

Summary of proceedings

Support for work related to LAN integration of the Cabinet Office and Ministries by Digital Agency Government Solution Service

Serial number: 23-09-01
Contract method: General competitive contract (lowest price bidding method)
Counterparty: TIS Co., Ltd.
Contract amount: 111,100,000 yen
Contract date: November 25, 2022

Comments and Questions	Answer
It did not go well twice in fiscal 2022, but is it the case that other companies received orders in fiscal 2023?	The contract is scheduled for September 22, and the procurement is in progress.
How is the contract amount in fiscal 2023 compared with that in fiscal 2022, and is there any difference in the contract method, etc.?	In fiscal 2023, a proposal type planning competition was held, and procedures for the contract were advanced. Due to the planning competition bidding, the contract was concluded after examination, but the contract amount is not yet known because the contract conclusion date is September 22.
Why did you decide to switch to the proposal type?	In order to eliminate the situation of vendor lock-in, we have adopted a proposal type method so that SMEs and start-up businesses can actively participate in national procurement projects.
The contractor will change in fiscal 2023. To what extent will the company provide the know-how and solutions it has provided up to the previous fiscal year? In addition, how will the company provide information and communication to the contractors who will participate in the planning competition when incorporating proposals into abstract matters such as work support?	Although this procurement is a support service, it is a LAN integration of the Cabinet Office and Ministries, and the target ministries and agencies differ from year to year. Therefore, it is not a service in which the know-how of last year will be utilized. Since the LAN system installed in each ministry and agency is different, and the registration method to the GSS is also different, it is discussed with the ministry and agency each time.
What is the number of participants in the planning competition in fiscal 2023?	I hear two.
Does the contract include a final inspection of man-hours and personnel expenses? Or is it a contract agreement?	It is carried out under a contract. For the management of the contract, the contract amount is paid as if the work was performed at the man-hours presented by checking the business diary, etc.
Since this contract is for support services, it seems that a form of consignment contract in which a final inspection is conducted to confirm the working hours and personnel expenses is suitable. Please consider it when considering the form of contract in the future.	All right.
If the occurrence of work is understood, it is considered that it should be described without omission or explained at a briefing session, etc., because it affects the number of man-hours even if it is small. It is considered that it should be described that there is a possibility of additional work after ensuring the coverage of the work that is understood. Therefore, it is requested that the manner of description be examined in the future.	All right.
In the specifications, it is stated that "negotiations shall be made under the same responsibilities as Digital Agency Employees," and it is presumed that the content of the negotiations shall be the adjustment of the schedule and Issue management, but the content of the negotiations is considered to be important. If it is a proposal type, it is a place where participating business operators can write in the project proposal, so please consider how to write it in the future.	All right.
Some of the resident liaison officers are permanently stationed, and there are concerns about fraudulent contracting. How do you ensure the chain of command to the contractor?	We understand that we have received the system table from the contractor and are checking the chain of command. In fiscal 2023, online response was basically allowed, so the format was changed.
It seems to be more necessary to confirm whether or not the number of man-hours is secured by online response, and it seems to be important to show that the number of man-hours is confirmed when accountability is asked.	All right.
The bid is being made again, but are practical measures taken to prevent the scheduled price from being revealed in the event of a failure or slump? Also, has Digital Agency issued any policies to respond to the failure or slump? Or are there any plans to issue such policies in the future?	Although there are no clear rules, there are cases in which bidding is terminated early if there is a significant deviation from the scheduled price, and the number of bids is determined again on a case-by-case basis. We have not prepared any response policy at this point, but we would like to consider it based on the points you pointed out today.
It is expected that the Cabinet Office and each Ministry will continue to provide support services. However, I would like you to consider how to standardize the results of the previous fiscal year and how to accumulate internal know-how, rather than creating manuals for education training and other work that can be made into manuals and repeating orders with the same specifications.
Government solution services are considered important in becoming cloud native. We would like to support and lead the path to cloud computing while improving education activities such as procurement training of work contents and standardization of the results of the previous fiscal year.

e-Gov Cloud transition and design, development, etc. related to function expansion

Serial number: 23-09-02
Contract method: General competitive bidding contract (comprehensive evaluation bidding method)
Counterparty: NEC Corporation
Contract amount: 2,442,000,000 yen
Contract date: January 25, 2023

Comments and Questions	Answer
How many years into the future is transition's journey from cloudlift to cloud native? Also, I would like to confirm the meaning of each term.	Cloud lift refers to the transition of on-premise types (those placed on servers) into the cloud, and is the design of a cloud system transition for on-premise into the cloud without losing its functions. Cloud native refers to the transition of a system that is suitable for the cloud from the beginning by performing various new design operations to adapt it to the cloud environments and performing appropriate development operations at the same time. We are working on an rough schedule that will allow us to release it as cloud native around February this year.
Adding post hoc miscellaneous activities to this procurement may limit the number of bidders. It may be better to specialize in online operations and to place separate orders for detailed operations.	This is a large project to add existing systems to the cloud. In addition to the cloud transition, it is expected that various people, including the business community, will request that the functions be expanded and that prompt responses be required. It is considered that it can be done efficiently and effectively if it is done at the same time as the addition of functions, so it has been decided to be the same project this time. In addition, those that are judged to be inappropriate to be handled in this project and those that do not require prompt responses will be handled as separate projects, and appropriate responses will be made.
In terms of the requirements for qualifications, etc., required of workers, there is a condition that they are experts certified by a specific organization. Is it possible to expect the entry of a wide range of business operators if they have the same qualifications?	It does not require that everyone have a specific qualification from a specific organization, and it does not prevent the proposal itself if the person has an appropriate skill level in the proposal.
Since the description was "One of the personnel must be an expert certified by a specific organization," it was thought that one person must be included. If not, it is possible to expand the range of practical experience if it can be proven as an equivalent qualification or another qualification.	I understand. We will refer to your advice when formulating specifications in the next fiscal year and beyond.
In addition to the change in the successful bidder, this is a project with a large difference in the bidding participants. In addition, split procurement was also mentioned. In this case, as a good practice, what do you think should be done to expand it to other projects?	It was not a steady operation but a cloud transition, and it was a time when it was easy for other operators to enter the system due to the life cycle of the system, so it is considered that the vendor was changed.
The bidding rate is low this time, but will there be any barriers to entry that will make it difficult to participate in bidding for similar procurement projects in the future?	It is assumed that there are some cloud service providers who are reluctant to enter the cloud service business because they need to enter the cloud service business during a tight schedule period and it is difficult for them to do so unless they have a certain level of power. It is also assumed that there is a sense among cloud service providers that the barrier to transition is low at the time of simply entering the cloud service business, and that this is the reason why cloud service business operators are putting their money in their wallets at low prices. It is also assumed that there is a sense among cloud service providers that the barrier to transition is low at the time of simply entering the cloud service business.
Any concerns about future lock-in?	Since we have been able to change vendors, we have accumulated know-how on procurement conditions that do not result in vendor lock-in. Based on this knowledge, we hope to continuously create a situation in which vendor lock-in does not occur in the next fiscal year and beyond.
I think the reason why vendors who are good at traditional on-premise types are responding to cloud native is that Digital Agency is creating a good flow, such as changing the consciousness of vendors. Is there anything easier to understand by being careful not to become a vendor lock-in?	Although the strengths of each business operator are different, many business operators think that it is necessary to write specifications in a form that can be accommodated so that specific business operators do not write the strengths that come to mind in the specifications in order not to raise entry barriers unnecessarily.
It is also important to know the capabilities of the company, such as technical and development capabilities, the qualifications for bidding participation, and who will be assigned to this project as work personnel. Is there any ingenuity in this regard?	Even if a company has very suitable technical capabilities, a tight and difficult project like this one will not work well if the work force does not have them. Therefore, the skills required of the work force are also incorporated while the quality of the company itself is secured by the bidding participation qualifications of the company itself. By expanding the high quality and range of the work force not only to specific companies but also to subcontractors, we believe that the barrier to entry, which requires the company to have people with skills, has been lowered. We would like to consider the balance between the degree of qualification of the work force to ensure the quality and not to be a barrier to entry.
We believe this is a good example of procurement pursuing economic rationality by being able to make economically inexpensive bids using the comprehensive evaluation bidding method while taking care of vendor lock-in amid the broad direction of cloud native.
Since it is a large-scale business, I think that it is carried out with A and B grades in order to improve the system including backup. However, if the qualifications required of the work force are specified and medium-sized subcontractors who are good at cloud are included, I think that it is possible to place orders in the form of including small and medium-sized enterprises and startups by dividing the functions into more parts when placing orders in the future. We would like to monitor the subcontractors and workers in detail and positively consider the participation grades and suppliers in the future.	I understand. We will continue to consider what form is the most appropriate from next fiscal year and what form of order is appropriate in terms of the soundness of the system and economic rationality.
In the case of System procurement, there is a vendor lock-in by a major vendor, but if orders are placed properly in this way and follow-up is provided to subcontractors, it is thought that orders can be placed without trouble. Therefore, I would like to know the results in procurement in the next term and the next term.	Since FY 2023, a list of business operators engaging in subcontracting and recommissioning has been published on the Agency's website. When conducting various inquiries, the list is used as a reference for calling on SMEs and startups. It seems difficult to eliminate vendor lock-in immediately, but we will work to eliminate it by referring to the procurement as a good example.

Survey and research concerning the Trusted Web development Promotion Project

Serial number: 23-09-03
Contract method: General competitive bidding contract (comprehensive evaluation bidding method)
Counterparty: Toppan Printing Co., Ltd.
Contract amount: 733,000,000 yen
Contract date: March 6, 2023

Comments and Questions	Answer
Is there a consensus on what the level of assurance is for Trusted Web?	Rather than setting a clear level, we are discussing the direction of gradually improving the range of possible validation while utilizing new technology.
In cooperation with the Cabinet Secretariat, etc., how should we understand how to show our presence regarding what Digital Agency will promote as a project?	Since it is one of the policy initiatives to realize DFFT and one of the initiatives to form digital society, it is one thing that Digital Agency, which has jurisdiction over them, is responding to them. In addition, when cooperating with the policies of relevant ministries and agencies, Digital Agency's presence is to respond to them. In addition, digital identity is a policy area that requires great expertise. Therefore, it is necessary to deepen the content while being closely followed by specialized human resources such as identity units in Digital Agency, and Digital Agency's presence is also seen from the perspective of expertise.
Recommissioning is an important matter, so it is considered that it should be described in the written specifications. In particular, it is considered that the main operations cannot be recommissioned, or that it should be described including the application procedures for recommissioning and the provisions on the rate of recommissioning. What do you think?	Subcontracting was stipulated in the contract, but in the case of conducting a similar business in the future, we would like to include it in the written specifications based on your comments.
In general, the main business cannot be recommissioned. Do you understand the recommissioning ratio and the ratio in the expenditure plan?	The details of the expenditure have been received from the planning stage. In addition, it is recognized that the content of supporting the business is recommissioned.
This contract seems to be a form of spending by selecting a business operator who will implement use cases through public solicitation, such as the secretariat of indirect subsidies. We believe that a consignment contract including final inspection is suitable for the form of spending, not a contract for work. What is your idea on the form of contract?	It has been confirmed that it is common for research and studies to be contracted in Digital Agency.
I think that the form of contract should be considered based on the content of the project. Even if the number of recipients of expenditure is one in the public offering, the amount of the contract will not change, and it may be difficult to obtain understanding from the perspective of economic efficiency and expenditure transparency. I think that the contract form should be reviewed, such as a consignment contract including final inspection.	The contract for this project has been made, but as the person in charge, I recognize that it is necessary to follow up on some aspects of the points you pointed out. In addition, I recognize that there are voices from startups that they cannot respond to the procedures if there is a final inspection, and I would like to consider the ideal way of the project from next time on, including this point.
This procurement is not just a survey consignment. By establishing a council, a human network is created. Once a human network is established, the reconsignment contractor is fixed in some cases. I think that this Issue will always be included in the councils of other ministries and agencies, etc., and it will be a barrier to entry that practically prevents people other than those who have been in charge of the councils from entering. While writing important matters such as reconsignment in written specifications and enhancing fairness and transparency, we would like to see the overall procurement activities become more transparent. Furthermore, as a fundamental problem, we would like to see the contract form of survey and research consignment examined not only in this case but also in other cases.