## Section 5 Efficient, Prioritized Deployment of Measures

## 1 Driving Improvement of the Total Cost Structure of Implementation of Public-Works Projects

With tight financial status, etc. in the background, the whole government is pursuing to improve the cost of implementation of public-works projects. The Ministry of Land, Infrastructure and Transport formulated a Program for Improving the Cost of Implementation of Public-Works Projects in March 2008 in its bid to improve the total cost structure. The Program values the concept of maximizing VFM $ ^{Note 1} $ , in addition to the actions already taken, and uses a “total cost improvement factor” to “evaluate the improvement of the social cost structures of environmental load abatement, etc.,” “the improvement of life-cycle cost structures using longer-lived facilities” and “the improvement of cost structures through technical innovations by private businesses.” It aims to boost the total cost improvement factor by 15% over a five-year period from its FY2007 level. In FY2012, the MLIT and the associated agencies, etc. realized a total cost improvement factor of 11.7%.

## 2 Ensuring the Quality of Public Works and Promoting Proper Tendering and Contracting for Public-Works Projects

(1) Review of the comprehensive evaluation bidding method Note 2

The “Act on Promoting Quality Assurance in Public-Works Projects” (hereinafter called “Quality Assurance Act”) enforced in April 2005 requires the quality of public works to be “assured by signing a contract that is generally superior in both terms of price and quality with due consideration given to economics and diverse non-pricing factors taken into account.”

The practice of a comprehensive evaluation bidding method has been promoted after enforcement of the Quality Assurance Act to such extent that it has penetrated almost all of the construction works carried out under direct supervision of the MLIT since FY2007, and all prefectures, government-ordinance-designated cities and 62.5% of all the municipalities have introduced the method.

As more efforts continue to broaden the scope of its application, its problems have loomed, such as increased burdens on the competition participants and purchasers and deviations from the guiding principles of the method. To resolve these problems, remedial measures have been put into action, including polarization of the construction directly supervised by the Ministry into two alternative approaches starting from FY2014, namely, the “construction capability evaluation type”, whereby contractors’ construction capabilities are evaluated, and the “technical proposal evaluation type”, whereby technical proposals submitted by the contractors, as well as their construction capabilities, are evaluated.

## (2) Introduction of the regional maintenance contract method

In August 2011, amendments to the “Guidelines on the Measures Taken to Promote Proper Tendering and Contracting for Public-Works Projects” were approved at a Cabinet meeting to fuel further improvement of the tendering and contracting system, ushering in the “Regional Maintenance Type Contracting Method” as a new method of contracting to help acquire supporters of regional maintenance projects (disaster recovery, snow clearance and infrastructure maintenance and management projects) and to encourage the central and local governments, etc. to leverage diverse methods of ordering, such as blanket ordering to cover both design and construction and construction-managed ordering.

## (3) Approaches to assuring quality in the construction stage

Other ongoing efforts include the promotion of information sharing between contractor and contractee to assure the quality of work objects, and the trial practice of “in-process inspections,” which verify the status, etc. of construction works across the flow of construction processes, and “quality certifications by third parties under contract from the builders.”