JAPAN Law and Practice Contributed by: Makoto Terazaki, Taku Matsumoto, Suguru Yokoi, Naoko Takasaki and Jun Suzuki, Anderson Mori & Tomotsune
price that is not made public in the procurement pro - cess may constitute an offence under the Penal Code and the Act on Elimination and Prevention of Involve - ment in Bid Rigging, etc, and Punishments for Acts by Employees that Harm Fairness of Bidding, etc. 2.10 Exclusion Grounds Contracting authorities may set additional qualifica - tion criteria to exclude or shortlist tenderers, provided those criteria are established and disclosed publicly. In practice, notices often treat conflicts of interest or unfair advantages as grounds for disqualification, even though the general procurement regime does not contain an explicit conflict-of-interest rule. A bidder that does not meet the prescribed criteria may have its bid treated as invalid. 2.11 Transparency and Confidentiality The Japanese procurement regime is underpinned by fairness and transparency, and information relating to public contracts may be disclosed under the Act on Access to Information Held by Administrative Organs (Act No 42 of 1999). At the same time, defence procurement frequently takes the form of a discretionary contract because of the security-sensitive nature of the subject matter, so the level of procedural openness is often more limited than in ordinary competitive procurement. Contracting authorities therefore balance disclosure against secu - rity and technical sensitivity. Contract award notices are published. 2.12 Modification and Termination of Defence Contracts As a general matter, material changes to specifica - tions, timing or contract conditions are not permitted during or after the procurement procedure, and a new procedure may be required if the change is material. After a contract has been signed, changes are gener - ally only permitted where they are mutually agreed, justified and not material. Not necessarily in the legislation itself but, in prac - tice, many standard form contracts with the Ministry of Defense include, in addition to ordinary termination rights, a clause allowing termination for the govern -
ment’s convenience. In such cases, the contract typi - cally provides for the possibility of compensation for certain damages. Accordingly, the key point is that termination for con - venience is often addressed at the contract level rath - er than being expressly set out as a statutory ground. The exact position should be confirmed against the applicable procurement rules and the wording of the individual contract. 2.13 Challenging Defence Procurement Decisions For procurements covered by the WTO Agreement on Government Procurement (GPA), suppliers may file a complaint under Japan’s Government Procurement Challenge System with the Government Procurement Challenge Review Board, pursuant to the applicable cabinet order and implementing procedures. If the Board finds a breach, it may recommend remedial actions such as a new procurement procedure, re- evaluation of tenders, award to another supplier or termination of the contract. The Ministry of Defence also has an internal Fair Bidding Investigation Com - mittee, which provides explanations, conducts inves - tigations and issues non-binding recommendations when requested by an unsuccessful bidder. The com - plaint to the Board must be filed within ten days from the date the supplier knew or should have known the basis of the complaint. In parallel, a bidder may seek damages under Article 1 (1) of the Act on State Redress (Act No 125 of 1947) if it can prove that a public officer intentionally or negli - gently infringed its rights or interests in the course of the procurement procedure, causing loss. 3. Export Controls and Dual-Use Items 3.1 Export Control Legislation and Regulatory Framework In Japan, the export of defence-related goods, military equipment and dual-use items, the provision of con - trolled technology, and certain brokering transactions are primarily regulated under the FEFTA.
119 DEFENCE CONTRACTS 2026
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