The sixth meeting of the Digital Agency Bidding Oversight Committee

Overview

Date: March 13, 2025 (Thursday)
Location: Shared meeting room in Digital Agency
Committee members' names (in the order of Japanese syllabary):
- Ryota Kaneko, Professor, Faculty of Economics, Kokugakuin University
- Yoshiko Kawazawa Representative Director, Social Policy Lab Co., Ltd.
- Yuichi Mochinaga Professor, Graduate School of Accounting, Waseda University
Period under review: From April 1, 2024 (2024) to September 30, 2024 (2024)
Number of selected projects: 3 (408 projects)
Number of items discussed: 3

Material

Meeting Summary (PDF/164KB)

Summary of proceedings

Maintenance and renovation of compliance verification tools, compliance verification websites, and standardized standards management functions

Serial number: 25-03-01
Contract method: General competitive contract (comprehensive evaluation bidding method)
Counterparty: Grand Unit Co., Ltd.
Contract amount: 24,491,500 yen
Date of agreement: September 10, 2024 (2024)

Opinions and questions	Answer
Did the successful bidder in fiscal 2023 not bid for or participate in this procurement project?	The last successful bidder did not participate, and the company that was re-entrusted with system development by the last successful bidder participated in this procurement.
The procurement in question resulted in an extremely large difference in terms of price. Were there no problems with the nature of the work performed?	There are no major problems or effects at this point in time, as no major improvements were made from the tool created in the previous fiscal year.
Isn't there a great advantage in conducting procurement through proposal-based planning competition?	The revision of the Basic Policy by the Cabinet decision in December last year has a significant impact on the Compliance Tool. Therefore, for the next fiscal year, the Ministry of Economy, Trade and Industry is examining whether it is possible to conduct procurement through proposal-based planning competition and is making preparations accordingly.
We have no objection to the policy of conducting the next procurement through a proposal-based planning competition. However, in light of the fact that the risk estimates of the successful bidder were found to be relatively optimistic, we believe that it is better to describe the assumed risks in the specifications.	Got it.
What measures do you think are necessary to prevent unexpected man-hours on the part of your agency in your specifications?	We would like to organize the division of roles of business, such as the management part, and describe it in the procurement specifications so that business operators can respond according to the organized business contents.
In the case of public works, contracts are formalized to some extent, and the roles of the operator and the administration are clarified. On the other hand, in the case of system procurement, each project is highly individual and it is difficult to read it. In clarifying the roles, are there any common guidelines for the agency as a whole? If so, are there any specific guidelines for management?	A database of past procurement specifications is available for anyone to check, and a system is in place to receive advice from people with experience in these areas as a source of advice on the preparation of specifications. There are no specific guidelines that focus on the management area.
As for management, can the allocation of price points and technical points be adjusted in advance to some extent?	While the project was evaluated in terms of project execution capability and system, it was basically considered to be a matter of course. It is necessary to further examine and confirm the evaluation items of project management capability, and we would like to make use of them as points for reflection.
In the Comprehensive Evaluation Criteria Table, there is a difference between the examiners in the project understanding item of the renovation work. Why is it so different?	Because the project proposal was a proposal that at least parroted the content of the procurement specifications presented by the Agency, it could not be given a low evaluation, and the difference was caused. The agency regrets that it should have stated the request more specifically in the procurement specifications and made a judgment after receiving the detailed proposal.
In this specification, it is stated that "the possibility of modifications other than those described in this document should be noted." It would be better to indicate the possibility of modifications to some extent in detail, itemize the number of man-hours related to the possibility of modifications, and make sure to estimate it.	Got it.
With regard to the system, this specification states that "When a change or addition of personnel is requested in the event that it is judged that appropriate quality cannot be expected, the request shall be made promptly." Did the FCO not make the request?	When we negotiated to send a backup member, it was postponed due to the convenience of the business operator. As you pointed out, if the content of the renovation is known, it must be described as a specific item in the specifications.
In this specification, the conditions of the general manager are described, but the quality control by the business operator was not sufficient. It would be better to describe the role as well.	Got it.
The validity of the low bid was verified by your agency, and it was understood that this project was carried out by your agency's own support for the management of the process. This time, indirect man-hours were spent on your agency's side, and although it has already been described in the specifications and the evaluation criteria table, etc., it is desirable to incorporate what has been recognized this time into the specifications and the evaluation criteria table in a more advanced manner. In this specification, the conditions of the general manager are described, but the quality control by the business operator was not sufficient. It would be better to include the role of the general manager.

Fiscal 2024 (Fiscal 2024) A set of design, development, operation, and maintenance services related to the information provision record disclosure system

Serial number: 25-03-02
Contract method: Discretionary contract (public offering)
Counterparty: Accenture Japan Ltd.
Contract amount: 4,720,694,000 yen
Date of agreement: April 1, 2024 (2024)

System for Disclosure of Records of Information Provision, etc. A set of operation and maintenance services and reconstruction of back-end functions

Serial number: 25-03-03
Contract method: Discretionary contract (plan competition)
Counterparty: Accenture Japan Ltd.
Contract amount: 16,940,000,000 yen
Date of agreement: June 6, 2024 (2024)

Opinions and questions	Answer
Please explain the overall picture of procurement of the Information Disclosure System.	Development began in December 2014 by the then Cabinet Secretariat Office of Social Security Reform and was transferred to Digital Agency in September 2021. Since then, Digital Agency has been developing and operating the Information Disclosure System. As a development and operation contract for this fiscal year, in FY 2024 (FY 2024), a set of design, development, operation and maintenance services related to the Information Disclosure System was procured. A set of reconstruction and operation and maintenance services for the back-end functions of the Information Disclosure System was procured for the system renewal of the Information Disclosure System.
Fundamentally speaking, if there is a request from each ministry about what they want to do with the information disclosure system, is there a situation where they have no choice but to deal with it by changing the contract?	This is true. Not only the specifications and the timing of response can be decided by NISA alone, but also each ministry and agency needs to cooperate with NISA, which is in a position to promote digitalisation, when a case arises that should be dealt with by each ministry and agency.
In the modified agreement, some projects are newly added to the development list. On the other hand, there are projects that were on the list in the previous modified agreement but are no longer on the next list. If it is only additional development, it is simple, but if there are projects that no longer need to be developed, are they managed rationally, such as whether or not unnecessary man-hours are generated?	The development projects on the list of modification contracts are those for which a response not within the scope of the existing contract occurred at the time of the contract. Therefore, the development projects that are already within the scope of the existing contract are not included in the list because they are not included in the list. Regarding additional development, at the time of the initial contract, the ministry and agency in charge of the system could not include the requirements because they had not been finalized, but as the contents were finalized, the modification contract was concluded.
I think that the number of man-hours will increase considerably due to the change contract, but at what stage will the negotiation be conducted as a system?	In fiscal 2024, the contract was divided into the first half and the second half, and negotiations were carried out as soon as the number of man-hours for the second half was fixed, because there were many cases where the requirements had not been fixed or where there were many changes from the originally planned items during the system development.
Will the current operator be able to handle the additional work?	As the system has been continuously added and developed since 2014, it is in a monolithic state, and the cost is high because it affects the entire system due to partial renovation. To solve this problem, we first separated the front-end and the back-end. By separating them, for example, small-scale screen renovation can be renovated with fewer man-hours. On the other hand, the back-end is still a large-scale system, so we divided it and implemented this procurement in the direction of making each smaller.
Are you in the transition phase at this point?	As you are aware.
There is a risk that a single company will be determined to be the one who can respond realistically if the change contract is made to this extent. Will this change contract be continued in the future if it is a similar project?	As one of the major problems in procurement, the Government of Japan has developed a rule that stipulates that the amount of change should not exceed 40% and that changes should not be made more than twice in principle. The Government of Japan carefully checks whether there is a real need for changes that do not comply with the rule. After the completion of major procurement related to this case, the Government of Japan believes that it is necessary to make more efforts in future procurement based on this experience.
Many of the contracts with large contract amounts are modified in this way and account for a large proportion of the total contract amount.	There seems to be such a tendency.
It is said that the change contract had to be made due to the request from each ministry and agency. How is the budget management?	Additional functions are removed from each ministry and agency, and budget requests are made. If there is no budget for something that has not been discussed in the budget request, it will have no choice but to refuse. However, some things will have to be dealt with in a political hurry, and in that case, adjustments such as giving up on some development may occur.
Does the operator have a prospect of specification change in advance?	When requesting the preparation of an estimate for the budget request, it is considered that a certain development schedule can be made by the operator.
As a result of today's deliberations, we have come to understand that the Information Disclosure System is in a period of growth and expansion as it advances in digitalisation as your agency's mission. We have also come to understand that the Change Agreement has been developed as an additional function as a result of being able to define requirements for things that could not be defined, and that this has been done through due procedures while the Information Disclosure System is in a period of expansion. We have also come to understand that this is a very large system, and that improvement activities are being carried out with a view to the future so that new entrants can participate in procurement once the current transitional period has passed. We would like you to promote procurement activities more rationally while strongly advancing your agency's mission of promoting digitalisation.